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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
KEY PRODUCTION COMPANY, INC.
(Exact name of registrant as specified in its articles of incorporation)
Delaware 84-1089744
(State of incorporation) (I.R.S. Employer Identification
Number)
707 Seventeenth Street, Suite 3300
Denver, Colorado 80202-3404
(303) 295-3995
(Address, including zip code, and telephone number, including area code, of
registrant's executive offices)
_____________________
Cathy L. Anderson, Controller
Key Production Company, Inc.
707 Seventeenth Street, Suite 3300
Denver, Colorado 80202-3404
Tel. (303) 295-3995
Fax (303) 295-3494
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_____________________
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
Thomas A. Richardson, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Tel. (303) 861-7000
Fax (303) 866-0200
_____________________
Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 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 of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of each Proposed maximum
class of Proposed maximum aggregate
securities to be Amount to be offering price offering price Amount of
registered (1) registered (2) per share (3) (4) (5) registration fee
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Common Stock,
Preferred Stock
and Debt
Securities -- -- $150,000,000 $41,700
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(1) This registration statement also covers debt securities, preferred stock,
and common stock which may be issued in exchange for, or upon conversion
of, as the case may be, the securities registered hereunder. In addition,
any other securities registered hereunder may be sold separately or as
units with other securities registered hereunder.
(2) In no event will the aggregate initial offering price of common stock,
preferred stock, and debt securities issued under this registration
statement exceed $150,000,000, or the equivalent thereof in one or more
foreign currencies or composite currencies.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act of 1933.
(4) The proposed maximum offering price per unit will be determined from time
to time by Key in connection with, and at the time of, the issuance by Key
of the securities registered hereunder.
(5) Estimated solely for the purposes of computing the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933.
_____________________
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said SECTION 8(a),
may determine.
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The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED July 27, 1999.
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$150,000,000
KEY PRODUCTION COMPANY, INC.
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
_____________________
We may from time to time issue up to a total of $150,000,000 of our common
stock, preferred stock and/or debt securities. The accompanying prospectus
supplement will specify the terms of the securities.
_____________________
Key may sell these securities to or through underwriters, and also to other
purchasers or through agents. The accompanying prospectus supplement will
specify the names of these underwriters or agents.
_____________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR 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 sell securities unless it is accompanied
by a prospectus supplement.
_____________________
Prospectus dated ___________________, 1999.
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TABLE OF CONTENTS
PAGE
----
About This Prospectus....................................... 3
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 3
Key Production Company, Inc................................. 4
Ratios of Earnings to Fixed Charges and Ratios of Earnings
to Combined Fixed Charges and Preferred Stock Dividends.... 4
Use of Proceeds............................................. 5
The Securities We May Offer................................. 5
Description of Capital Stock................................ 6
Description of Debt Securities.............................. 9
Book-Entry Issuance......................................... 12
Plan of Distribution........................................ 15
Legal Matters............................................... 17
Experts..................................................... 17
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $150,000,000. This prospectus provides you with a general description
of the securities we may offer. Each time we offer to sell securities, we will
provide a prospectus supplement that will contain specific information about the
terms of that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. This prospectus, together with
applicable prospectus supplements, will include or refer you to all material
information relating to each offering.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our Securities and
Exchange Commission filings are available to the public over the Internet at the
Securities and Exchange Commission's web site at http://www.sec.gov. You may
also read and copy any document we file at the Securities and Exchange
Commission's public reference rooms located at:
- 450 Fifth Street, N.W.
Washington, D.C. 20549;
- 7 World Trade Center
New York, New York 10048; and
- Citicorp Center
500 West Madison Street
Chicago, Illinois 60661.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the public reference rooms and their copy charges.
Our common stock has been listed and traded on the New York Stock Exchange
since 1996. Accordingly, you may inspect the information we file with the
Securities and Exchange Commission at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the Securities and Exchange Commission
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the
Securities and Exchange Commission under Sections 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934 until we sell all of the securities:
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998.
- Our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1999.
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This description may be further amended from time to time.
Each of these documents is available from the Securities and Exchange
Commission's web site and public reference rooms described above. You may also
request a copy of these filings, excluding exhibits, at no cost by writing or
telephoning Monroe W. Robertson, Corporate Secretary, at our principal executive
office, which is:
Key Production Company, Inc.
707 Seventeenth Street, Suite 3300
Denver, Colorado 80202-3404
(303) 295-3995
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone to provide you with different information.
We are not making an offer of the securities covered by this prospectus in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement or in any other
document incorporated by reference in this prospectus is accurate as of any date
other than the date on the front of those documents.
KEY PRODUCTION COMPANY, INC.
Key Production is a Delaware corporation formed in 1988. We are an
independent natural gas and crude oil exploration and production company with
operations in the Anadarko Basin of Oklahoma, the Hardeman Basin of north-
central Texas, the Sacramento Basin of northern California, the Gulf Coast of
Texas, Louisiana and Mississippi and the Rocky Mountains. Key is headquartered
in Denver, Colorado with regional exploration offices located in Tulsa,
Oklahoma; New Orleans, Louisiana; and Sacramento, California. We hold interests
in some of our oil and gas properties through our wholly-owned subsidiaries,
Brock Exploration Corporation, Brock Oil & Gas Corporation and Brock Gas Systems
and Equipment, Inc.
RATIOS OF EARNINGS TO FIXED CHARGES AND
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
Our ratios of earnings to fixed charges and our ratios of earnings to
combined fixed charges and preferred stock dividends were the same for each of
the periods indicated in the table below. This is because there were no shares
of preferred stock outstanding during any of these periods.
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
- ---------------------------- -------------------------------------------
1999 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
1.66 3.17 9.44 9.95 4.82 10.94
Our ratios of earnings to fixed charges and our ratios of earnings to
combined fixed charges and preferred stock dividends were computed based on:
- "earnings," which consist of consolidated income or losses from
continuing operations plus income taxes and fixed charges, except
capitalized interest, or, in the case of our ratios of earnings to
combined fixed charges and preferred stock dividends, those earnings
plus preferred stock dividends; and
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- "fixed charges," which consist of consolidated interest on indebtedness,
including capitalized interest, amortization of debt discount and
expense, and the estimated portion of rental expense attributable to
interest, or, in the case of our ratios of earnings to combined fixed
charges and preferred stock dividends, those fixed charges plus
preferred stock dividends.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, we
expect to use the net proceeds from the sale of the securities for general
corporate purposes, which may include, among other things:
- the repayment of outstanding indebtedness;
- working capital;
- capital expenditures; and
- acquisitions.
The precise amount and timing of the application of such proceeds will
depend upon our funding requirements and the availability and cost of other
funds.
THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together
with the applicable prospectus supplements, summarize all the material terms and
provisions of the various types of securities that we may offer. The particular
terms of the securities offered by any prospectus supplement will be described
in that prospectus supplement. If indicated in the applicable prospectus
supplement, the terms of the securities may differ from the terms summarized
below. The prospectus supplement will also contain information, where
applicable, about material U.S. federal income tax considerations relating to
the securities, and the securities exchange, if any, on which the securities
will be listed.
We may sell from time to time, in one or more offerings:
- common stock;
- preferred stock; and/or
- debt securities.
In this prospectus, we will refer to the common stock, preferred stock, and
debt securities collectively as "securities." The total dollar amount of all
securities that we may issue under this prospectus will not exceed $150,000,000.
If we issue debt securities at a discount from their original stated
principal amount, then, for purposes of calculating the total dollar amount of
all securities issued under this prospectus, we will treat the initial offering
price of the debt securities as the total original principal amount of the debt
securities.
This prospectus may not be used to sell securities unless it is accompanied
by a prospectus supplement.
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DESCRIPTION OF CAPITAL STOCK
The following description of our common stock and preferred stock, together
with the additional information included in any applicable prospectus
supplements, summarizes the material terms and provisions of these types of
securities. For the complete terms of our common stock, please refer to our
certificate of incorporation and bylaws that are incorporated by reference into
the registration statement that includes this prospectus or may be incorporated
by reference in this prospectus. The terms of these securities may also be
affected by the General Corporation Law of the State of Delaware.
Under our certificate of incorporation, our authorized capital stock
consists of 50,000,000 shares of common stock, $.25 par value per share. Key is
not currently authorized to issue preferred shares. Authority to issue
preferred shares would require a majority vote of Key's stockholders at either
the Annual Meeting of Stockholders or at a Special Meeting called for the
purpose of voting on the authorization of preferred shares. We will describe the
specific terms of any common stock or preferred stock we may offer in a
prospectus supplement. If indicated in a prospectus supplement, the terms of any
common stock or preferred stock offered under that prospectus supplement may
differ from the terms described below.
COMMON STOCK
As of March 31, 1999, Key had 50,000,000 shares of common stock authorized
and 11,524,681 shares of common stock outstanding. All outstanding shares of
common stock are duly authorized, validly issued, fully paid and nonassessable.
Voting
For all matters submitted to a vote of stockholders, each holder of common
stock is entitled to one vote for each share registered in his or her name on
the books of Key. Our common stock does not have cumulative voting rights. As a
result, subject to the voting rights of any future holders of preferred stock,
persons who hold more than 50% of the outstanding common stock entitled to elect
members of the board of directors can elect all of the directors who are up for
election in a particular year.
Dividends
If our board of directors declares a dividend, holders of common stock will
receive payments from the funds of Key that are legally available to pay
dividends. However, this dividend right is subject to any preferential dividend
rights we may grant to future holders of preferred stock.
Liquidation
If Key is dissolved, the holders of common stock will be entitled to share
ratably in all the assets that remain after we pay our liabilities and any
amounts we may owe to the persons who hold preferred stock.
Other Rights and Restrictions
Holders of common stock do not have preemptive rights, and they have no
right to convert their common stock into any other securities. Our common stock
is not subject to redemption by Key. Our articles of incorporation and bylaws do
not restrict the ability of a holder of common stock to transfer his or her
shares of common stock.
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When we issue shares of common stock, the shares will be fully paid and
non-assessable. Delaware law provides that, if we make a distribution to our
stockholders other than a distribution of our capital stock, when we are
insolvent, or that renders us insolvent, then our stockholders would be required
to pay back to us the amount of the distribution we made to them, or the portion
of the distribution that causes us to become insolvent.
Listing
Our common stock is listed on the New York Stock Exchange.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Continental Stock
Transfer & Trust Company.
PREFERRED STOCK
General
Key is not currently authorized to issue preferred shares. Authority to
issue preferred shares would require a majority vote of Key's stockholders at
either the Annual Meeting of Stockholders or at a Special Meeting called for the
purpose of voting on the authorization of preferred shares.
If approved by our stockholders, our board of directors will be authorized
to issue preferred stock in one or more series and to determine the voting
rights and dividend rights, dividend rates, liquidation preferences, conversion
rights, redemption rights, including sinking fund provisions and redemption
prices, and other terms and rights of each series of preferred stock.
Undesignated Preferred Stock
This summary of the undesignated preferred stock discusses terms and
conditions that we expect will apply to all series of the preferred stock
offered under this prospectus. The applicable prospectus supplement will
describe the particular terms of each particular series of preferred stock
offered. If indicated in the prospectus supplement, the terms of any series may
differ from the terms described below.
The following description, together with the applicable prospectus
supplements, will summarize all the material terms and provisions of any
preferred stock being offered by this prospectus. It does not restate the terms
and provisions in their entirety. We will incorporate by reference as an
exhibit to the registration statement the form of any certificate of designation
before the issuance of any series of preferred stock. We urge you to read this
certificate of designation.
We expect the prospectus supplement to include some or all of the following
terms:
- the designation of the series of preferred stock;
- the number of shares of preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;
- the dividend rate or rates of the shares, the dates at which dividends,
if declared, will be payable, and whether or not the dividends are to be
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cumulative and, if cumulative, the date or dates from which dividends
shall be cumulative;
- the amounts payable on shares of the preferred stock in the event of our
voluntary or involuntary liquidation, dissolution or winding up;
- the redemption rights and price or prices, if any, for the shares of
preferred stock;
- any terms, and the amount, of any sinking fund or analogous fund
providing for the purchase or redemption of the shares of preferred
stock;
- any restrictions on our ability to make payments on any of our capital
stock if dividend or other payments are not made on the preferred stock;
- any voting rights granted to the holders of the shares of preferred
stock in addition to those required by Delaware law or our certificate
of incorporation;
- whether the shares of preferred stock will be convertible into shares of
our common stock or any other class of our capital stock, and, if
convertible, the conversion price or prices, and any adjustment or other
terms and conditions upon which the conversion shall be made;
- any other rights, preferences, restrictions, limitations or conditions
relative to the shares of preferred stock permitted by Delaware law or
our certificate of incorporation;
- any listing of the preferred stock on any securities exchange; and
- the federal income tax considerations applicable to the preferred stock.
Subject to our certificate of incorporation and to any limitations imposed
by any then-outstanding preferred stock, we may issue additional series of
preferred stock, at any time or from time to time, with such powers,
preferences, rights and qualifications, limitations or restrictions, as the
board of directors determines, and without further action of the stockholders,
including holders of our then-outstanding preferred stock, if any.
Anti-Takeover Effect of Delaware Law
Section 203 of the Delaware General Corporation Law prevents a publicly
held corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:
- before the date on which the person became an interested stockholder,
the board of directors of the corporation approved either the business
combination or the transaction in which the person became an interested
stockholder;
- the interested stockholder owned at least 85% of the outstanding voting
stock of the corporation at the beginning of the transaction in which it
became an interested stockholder, excluding stock held by directors who
are also officers of the corporation and by employee stock plans that do
not provide participants with the rights to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or
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- after the date on which the interested stockholder became an interested
stockholder, the business combination is approved by the board of
directors and the holders of two-thirds of the outstanding voting stock
of the corporation voting at a meeting, excluding the voting stock owned
by the interested stockholder.
As defined in Section 203, an "interested stockholder" is generally a
person owning 15% or more of the outstanding voting stock of the corporation. As
defined in Section 203, a "business combination" includes mergers,
consolidations, stock and assets sales and other transactions with the
interested stockholder.
The provisions of Section 203 may have the effect of delaying, deferring or
preventing a change of control of Key.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be direct unsecured obligations of Key and may be
senior debt securities, senior subordinated debt securities or junior
subordinated debt securities.
The debt securities will be issued under one or more indentures in the form
that has been filed as an exhibit to the registration statement of which this
prospectus is a part. The indentures will be subject to and governed by the
Trust Indenture Act of 1939.
Key may issue the debt securities in one or more series. Specific terms of
each series of debt securities will be contained in resolutions of Key's board
of directors or in a supplemental indenture. The specific terms will be
described in a prospectus supplement.
All debt securities of one series need not be issued at the same time and,
unless otherwise provided in the prospectus supplement, Key may issue additional
debt securities of the series without consent of the holders.
The specific terms of the debt securities may include any of the following:
- the title of the debt securities and whether the debt securities are
senior debt securities, senior subordinated debt securities or junior
subordinated debt securities;
- the aggregate principal amount of the debt securities and any limit on
the aggregate principal amount;
- the price at which the debt securities will be issued;
- any right of the holders to convert the debt securities into stock,
including the initial conversion price and rate and the conversion
period and any limitations on the transferability of the stock received
on conversion;
- the dates on which the principal of the debt securities will be payable;
- the interest rates, which may be fixed or variable;
- the dates from which any interest will accrue, the dates on which the
interest will be payable, the record dates for the interest payments,
the persons to whom the interest will be payable, and the manner of
calculating interest ;
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- any right of Key to extend the dates on which principal or interest
will be payable;
- the places where the principal and any interest will be payable, where
the debt securities may be surrendered for registration of transfer and
where notices to Key regarding the debt securities and the indenture may
be served;
- any right of Key to elect to redeem the debt securities, including the
redemption prices and redemption periods;
- any obligation of Key to redeem the debt securities under any sinking
fund or similar provision or at the option of a holder, including the
redemption prices and redemption periods;
- the events that would cause Key to be in default and the consequences of
default; and
- any discharge and release provisions of the indenture.
The debt securities may be issued at a discount below their principal
amount and provide for less than the entire principal amount to be payable on
acceleration of the maturity of the debt securities. In that case, all material
U.S. federal income tax, accounting and other considerations applicable to the
securities will be described in the prospectus supplement.
Except as may be set forth in any prospectus supplement, the debt
securities will not contain any provisions that would limit the ability of Key
to incur debt or that would protect holders of debt securities in the event of a
change of control of Key. The prospectus supplement will contain information
with respect to any changes to the events of default of Key that are described
below.
Covenants
The prospectus supplement will describe any material covenants of a series
of debt securities.
Events of Default, Notice and Waiver
The prospectus supplement and each indenture will describe the events that
would cause Key to be in default and the consequences of default, including the
following:
- failure to pay any interest when due that continues for a period of 30
days;
- failure to pay the principal when due;
- breach of any other covenant or warranty of Key in the indenture that
continues for a period of 90 days after written notice as provided in
the indenture; and
- any other event of default provided in the indenture.
If an event of default under any indenture occurs and is continuing, then
the trustee or the holders of not less than 25 percent in principal amount of
the debt securities of that series will have the right to declare the principal
amount of all the debt securities of that series to be due and payable
immediately by written notice to Key and to the trustee if given by the holders.
If the debt securities of that
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series were issued at a discount or are indexed securities, only the portion of
the principal amount specified in the terms of the securities may be declared
due and payable. However, at any time after the declaration of acceleration with
respect to debt securities of the series has been made, but before judgement for
payment of the money due has been obtained by the trustee, the holders of a
majority of the principal amount of outstanding debt securities of the series
may rescind the acceleration if all conditions set forth in the indenture are
met.
The indentures also will provide that the holders of a majority of the
principal amount of the outstanding debt securities of any series may waive any
past default and its consequences, except a default:
- in the payment of the principal or interest or
- of a provision contained in the indenture that cannot be amended without
the consent of the holder of each outstanding debt security affected.
The indentures will provide for other procedures that may be followed by
holders of debt securities, the trustee of any series of debt securities, or
both, if an event of default occurs.
Amendment of the Indentures
Amendments of an indenture are permitted with the consent of the holders of
a majority in principal amount of all outstanding debt securities issued under
the indenture affected by the modification or amendment. However, no amendment
may, without the consent of each holder of debt securities affected:
- reduce the amount of debt securities whose holders must consent to an
amendment, supplement or waiver;
- reduce the rate of interest or change the time for payment of interest,
including default interest, on any debt security;
- reduce the principal or change the fixed maturity or alter any
redemption provision or any obligations of Key to offer to purchase or
to redeem debt securities;
- modify the ranking or priority of the debt securities;
- waive a continuing default in the payment of principal or interest; or
- make any debt security payable at a different place or in different
currency, or impair the right of any holder to bring suit.
The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of all holders, waive compliance by Key
with restrictive covenants of the series.
Key and the trustee may amend the indenture to, among other things, correct
errors and ambiguities without the consent of any holder of debt securities as
set forth in the indenture and as described in the prospectus supplement.
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Subordination
The prospectus supplement will describe any subordination provisions and
will define the senior debt to which the debt securities may be subordinated and
will set forth the approximate amount of senior debt outstanding as of the end
of Key's most recent fiscal quarter.
Discharge
Except as otherwise specified in the prospectus supplement, when (1) all
debt securities of a series have become due and payable or will become due and
payable at their stated maturity within one year, and (2) Key deposits with the
trustee funds to pay all amounts due on the entire outstanding series of debt
securities, then Key will have satisfied the indenture with respect to the
series.
Except as otherwise specified in the prospectus supplement, the indentures
will provide that Key may elect either (a) to be discharged from any series of
debt securities or (b) to be released from certain obligations with respect to
the debt securities under the indenture, in either case after depositing with
the trustee enough money to pay all amounts due on the debt securities on the
scheduled due dates.
In addition, Key must have delivered to the trustee an opinion of counsel
that the holders of the debt securities (1) will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of the discharge or
release from obligations and (2) will be subject to U.S. federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if the discharge or release had not occurred. After a discharge, the
holders of the debt securities will be able to look only to the trust fund for
payment of principal and interest.
Payment and Paying Agents
Unless otherwise specified in the applicable prospectus supplement,
principal and interest will be payable at the corporate trust office of the
trustee, the address of which will be stated in the applicable prospectus
supplement. However, at the option of Key, payment of interest may be made by
check mailed to the address of the person entitled to payment as it appears in
the register for the debt securities or by wire transfer of funds to the person
at an account maintained within the United States.
All monies paid by Key to a paying agent or a trustee for the payment of
principal or interest that remain unclaimed at the end of two years after the
payment has become due will be repaid to Key, and the holder of the debt
security then may look only to Key for payment.
BOOK-ENTRY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, we will
issue securities, other than common stock, in the form of one or more book-entry
certificates registered in the name of a depositary or a nominee of a
depositary. Unless otherwise specified in the applicable prospectus supplement,
the depositary will be The Depository Trust Company. We have been informed by
DTC that its nominee will be Cede & Co. Accordingly, Cede is expected to be the
initial registered holder of all securities that are issued in book-entry form.
No person that acquires a beneficial interest in securities issued in book-
entry form will be entitled to receive a certificate representing those
securities, except as set forth in this prospectus or in the applicable
prospectus supplement. Unless and until definitive securities are issued under
the limited circumstances described below,
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all references to actions by beneficial owners of securities issued in
book-entry form will refer to actions taken by DTC upon instructions from its
participants, and all references to payments and notices to beneficial owners
will refer to payments and notices to DTC or Cede, as the registered holder of
such securities.
DTC has informed us that it is:
- a limited purpose trust company organized under New York banking laws;
- a "banking organization" within the meaning of the New York banking
laws;
- a member of the Federal Reserve System;
- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- a "clearing agency" registered under the Securities Exchange Act.
DTC has also informed us that it was created to:
- hold securities for "participants"; and
- facilitate the clearance and settlement of securities transactions among
participants through electronic book-entry, thereby eliminating the
need for the physical movement of securities certificates.
Participants include securities brokers and dealers, banks, trust companies
and clearing corporations. Indirect access to the DTC system also is available
to other indirect participants such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Persons that are not participants or indirect participants but desire to
buy, sell or otherwise transfer ownership of or interests in securities may do
so only through participants and indirect participants. Under the book-entry
system, beneficial owners may experience some delay in receiving payments, as
payments will be forwarded by our agent to Cede, as nominee for DTC. DTC will
forward these payments to its participants, which thereafter will forward them
to indirect participants or beneficial owners. Beneficial owners will not be
recognized by the applicable registrar, transfer agent, trustee or depositary as
registered holders of the securities entitled to the benefits of the
certificate, the indenture or any deposit agreement. Beneficial owners that are
not participants will be permitted to exercise their rights as an owner only
indirectly through participants and, if applicable, indirect participants.
Under the current rules and regulations affecting DTC, DTC will be required
to make book-entry transfers of securities among participants and to receive and
transmit payments to participants. Participants and indirect participants with
which beneficial owners of securities have accounts are also required by these
rules to make book-entry transfers and receive and transmit such payments on
behalf of their respective account holders.
Because DTC can act only on behalf of participants, who in turn act only on
behalf of other participants or indirect participants, and on behalf of certain
banks, trust companies and other persons approved by it, the ability of a
beneficial owner of securities issued in book-entry form to pledge those
securities to persons or entities
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<PAGE>
that do not participate in the DTC system may be limited due to the
unavailability of physical certificates for the securities.
DTC has advised us that it will take any action permitted to be taken by a
registered holder of any securities under the certificate, the indenture or any
deposit agreement only at the direction of one or more participants to whose
accounts with DTC the securities are credited.
DTC has further advised us that its management is aware that some computer
applications, systems, and the like for processing data that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed its participants and other
members of the financial community that it has developed and is implementing a
program so that its computer systems, as they relate to the timely payment of
distributions to securityholders, book-entry deliveries, and settlement of
trades within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including issuers and their agents, as well as DTC's direct
and indirect participants and third party vendors from whom DTC licenses
software and hardware, and third party vendors on whom DTC relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed its
participants and other members of the financial community that it is contacting
and will continue to contact third party vendors from whom it acquires services
to impress upon them the importance of such services being Year 2000 compliant
and determine the extent of their efforts for Year 2000 remediation -- and, as
appropriate, testing -- of their services. In addition, DTC is in the process of
developing contingency plans that it considers appropriate.
According to DTC, the information with respect to DTC has been provided to
its participants and other members of the financial community for informational
purposes only and is not intended to serve as a representation, warranty, or
contract modification of any kind.
Unless otherwise specified in the applicable prospectus supplement, a book-
entry security will be exchangeable for definitive securities registered in the
names of persons other than DTC or its nominee only if:
- DTC notifies us that it is unwilling or unable to continue as depositary
for the book-entry security or DTC ceases to be a clearing agency
registered under the Securities Exchange Act at a time when DTC is
required to be so registered; or
- we execute and deliver to the applicable registrar, transfer agent,
trustee and/or depositary an order complying with the requirements of
the certificate, the indenture or any deposit agreement that the book-
entry security will be so exchangeable.
Any book-entry security that is exchangeable in accordance with the
preceding sentence will be exchangeable for securities registered in such names
as DTC directs.
If one of the events described in the immediately preceding paragraph
occurs, DTC is generally required to notify all participants of the availability
through DTC of
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<PAGE>
definitive securities. Upon surrender by DTC of the book-entry security
representing the securities and delivery of instructions for re-registration,
the registrar, transfer agent, trustee or depositary, as the case may be, will
reissue the securities as definitive securities. After reissuance of the
securities, such persons will recognize the beneficial owners of such definitive
securities as registered holders of securities.
Except as described above:
- a book-entry security may not be transferred except as a whole book-
entry security by or among DTC, a nominee of DTC and/or a successor
depositary appointed by us; and
- DTC may not sell, assign or otherwise transfer any beneficial interest
in a book-entry security unless the beneficial interest is in an amount
equal to an authorized denomination for the securities evidenced by the
book-entry security.
None of Key, the trustees, any registrar and transfer agent or any
depositary, or any agent of any of them, will have any responsibility or
liability for any aspect of DTC's or any participant's records relating to, or
for payments made on account of, beneficial interests in a book-entry security.
PLAN OF DISTRIBUTION
Any of the securities being offered may be sold in any one or more of the
following ways from time to time:
- through agents;
- to or through underwriters;
- through dealers; and
- directly by Key.
The distribution of the securities may be effected 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 the prevailing
market prices or a negotiated prices.
Offers to purchase securities may be solicited by agents designated by Key.
Any agent involved in the offer or sale of the securities will be named, and any
commissions payable by Key to the agent will be set forth, in the prospectus
supplement. Unless otherwise indicated in the prospectus supplement, the agent
will be acting on a reasonable best efforts basis for the period of its
appointment. The agent may be deemed to be an underwriter, as that term is
defined in the Securities Act of 1933, of the securities so offered and sold.
If the securities are sold by means of an underwritten offering, Key will
execute an underwriting agreement with underwriters at the time an agreement for
the sale is reached. In that case, the names of the specific managing
underwriter or underwriters, as well as any other underwriters, the amounts
underwritten and terms of the transaction, including commissions, discounts and
any other compensation of the underwriters and dealers, will be set forth in the
prospectus supplement which will be
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<PAGE>
used by the underwriters to make resales of the securities. The underwriters
will acquire securities for their own accounts and may resell them from time to
time in one or more transactions, including negotiated transactions, at fixed
public offering prices or at varying prices determined by the underwriters at
the time of sale. Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by one
or more underwriters. Unless indicated in the prospectus supplement, the
underwriting agreement will provide that the obligations of the underwriters are
subject to conditions precedent and that the underwriters will be obligated to
purchase all the securities if any are purchased.
Key may grant to the underwriters options to purchase additional securities
to cover any over-allotments at the initial public offering price, with
additional underwriting commissions or discounts, as may be set forth in the
prospectus supplement.
If a dealer is used in the sale of the securities, Key will sell the
securities to the dealer as principal. The dealer may then resell the securities
to the public at varying prices to be determined by the dealer at the time of
resale. The dealer may be deemed to be an underwriter, as the term is defined in
the Securities Act, of the securities so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the prospectus
supplement.
Offers to purchase securities may be solicited directly by Key and
securities may be sold by Key directly to institutional investors or others, who
may be deemed to be underwriters within the meaning of the Securities Act with
respect to any resale. The terms of the sales will be described in the
prospectus supplement.
If described in the prospectus supplement, securities may also be offered
and sold, in connection with a remarketing on their purchase, in accordance with
a redemption or repayment under their terms, or otherwise, by one or more
remarketing firms, acting as principals for their own accounts or as agents for
Key. Any remarketing firm will be identified and its compensation and the terms
of any agreement with Key will be described in the prospectus supplement.
Remarketing firms may be deemed to be underwriters, as that term is defined in
the Securities Act, in connection with the securities remarketed.
If described in the prospectus supplement, Key may authorize agents and
underwriters to solicit offers by certain institutions to purchase securities
from Key at the public offering price set forth in the prospectus supplement
under delayed delivery contracts providing for payment and delivery on the date
or dates stated in the prospectus supplement. The delayed delivery contracts
will be subject to only those conditions set forth in the prospectus supplement.
A commission indicated in the prospectus supplement will be paid to underwriters
and agents soliciting purchases of securities under delayed delivery contracts
accepted by Key.
Agents, underwriters, dealers and remarketing firms may be entitled under
agreements with Key to indemnification by Key against certain liabilities,
including liabilities under the Securities Act, or to contribution for payments
that the agents, underwriters, dealers and remarketing firms may be required to
make.
Each series of securities will be a new issue. Other than the common stock,
which is listed on the New York Stock Exchange, new securities will have no
established trading market. Key may elect to list any series of securities on an
exchange, and in the case of common stock, on any additional exchange, but,
unless otherwise specified in the prospectus supplement, Key will not be
obligated to do so. No assurance can be given as to the liquidity of the trading
market for any of the securities.
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<PAGE>
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, Key and its subsidiaries
in the ordinary course of business.
LEGAL MATTERS
The validity of the common stock and the preferred stock and the status of
the debt securities as binding obligations of Key will be passed on for Key by
Holme Roberts & Owen LLP, Denver, Colorado.
EXPERTS
The audited consolidated financial statements incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated by their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
The information incorporated by reference into this prospectus regarding
the total proved reserves of Key was prepared by Key and audited by Ryder Scott
Company, L.P. as stated in their letter reports, and is incorporated by
reference in reliance upon the authority of said firm as experts in such
matters.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the securities are as follows:
Securities and Exchange Commission filing fee......................$ 41,700
Rating agency fees................................................. 100,000
Legal fees and expenses............................................ 150,000
Accounting fees and expenses....................................... 15,000
Trustee's fees and expenses........................................ 15,000
Printing and engraving............................................. 100,000
Miscellaneous...................................................... 45,000
--------
Total........................................................ $466,700
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Key's amended certificate of incorporation provides that Key shall, to the
full extent permitted under the Delaware General Corporation Law, indemnify its
officers, directors, employees and agents.
Section 145 of the Delaware General Corporation Law, inter alia, authorizes
a corporation to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, other than an action by or in the right of the corporation, because
such person is or was a director, officer, employee or agent of the corporation
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reason to believe his conduct was
unlawful. Similar indemnity is authorized for such persons against expenses,
including attorneys' fees, actually and reasonably incurred in defense or
settlement of any such pending, completed or threatened action or suit by or in
the right of the corporation if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that, unless a court of competent jurisdiction
otherwise provides, such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him. Key maintains policies insuring
its and its subsidiaries' officers and directors against certain liabilities for
actions taken in such capacities, including liabilities under the Securities Act
of 1933.
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Article 6 of Key's bylaws provides, in substance, that directors, officers,
employees and agents of Key shall be indemnified to the fullest extent permitted
by law, including the Delaware General Corporation Law. Additionally, Article IV
of Key's amended certificate of incorporation eliminates in certain
circumstances the personal liability of directors of Key for a breach of their
fiduciary duty as directors. These provisions do not eliminate the liability of
a director:
- for a breach of the director's duty of loyalty to Key or its
stockholders;
- for acts or omissions by the director not in good faith;
- for acts or omissions by a director involving intentional misconduct or
a knowing violation of the law;
- under Section 174 of the Delaware General Corporation Law, which relates
to the declaration of dividends and purchase or redemption of shares in
violation of the Delaware General Corporation Law; and
- for transactions from which the director derived an improper personal
benefit.
Reference is made to the form of underwriting agreements to be incorporated
by reference in this registration statement for a description of the
indemnification arrangements Key agrees to in connection with offerings of the
securities registered by this registration statement.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
NUMBER EXHIBIT
- ------ -------
1.1* Form of Underwriting Agreement.
2.1 Dissolution Agreement and Quitclaim Assignment between APC Operating
Partnership L.P., Apache Corporation and the Registrant, dated as of
January 1, 1993 (incorporated by reference to Exhibit 2.1 to the
Registrant's Form 10-Q for the period ended March 31, 1993, file no.
0-17162).
2.2 Agreement and Plan of Merger dated as of December 21, 1995 among Key
Production Company, Inc., Key Acquisition One, Inc. and Brock
Exploration Corporation (incorporated by reference to Exhibit 2.2 to
the Registrant's Statement on Form S-4, registration no. 333-00889
filed with the SEC on February 15, 1996).
3.1 Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form S-4, registration no. 33-23533 filed with the SEC on August 5,
1988).
3.2 Amendment to Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-4, registration no. 33-23533 filed
with the SEC on August 5, 1988).
3.3 Bylaws of the Registrant, as amended and restated on June 8, 1995
(incorporated by reference to Exhibit 3.3 to the Registrant's Form 10-
Q for the quarter ended June 30, 1995, file no. 0-17162).
4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit
4.12 to the Registrant's Amendment No. 1 to Registration Statement on
Form S-4, registration no. 33-23533 filed with the SEC on August 15,
1988).
4.2*** Form of Certificate for shares of Key's preferred stock.
4.2(a)** Form of Senior Indenture by and between Key Production Company, Inc.
and __________________, as trustee, including a form of senior debt
security.
II-2
<PAGE>
4.2(b)** Form of Senior Subordinated Indenture by and between Key Production
Company, Inc. and ____________________, as trustee including a form of
senior subordinated debt security.
4.2(c)** Form of Junior Subordinated Indenture by and between Key Production
Company, Inc. and ____________________, as trustee including a form of
junior subordinated debt security.
5.1** Opinion of Holme Roberts & Owen LLP.
12.1** Computation of ratios of earnings to fixed charges.
23.1** Consent of Independent Public Accountants.
23.2 Consent of Holme Roberts & Owen LLP (included in Exhibit 5.1).
23.3** Consent of Ryder Scott Company, L.P.
24.1 Power of Attorney (included on the signature pages of the original
filing).
* Key will file any underwriting agreement that it may enter into as an
exhibit to a Current Report on Form 8-K which is incorporated by reference
into this registration statement.
** Filed herewith.
*** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
1. Key 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 the volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
and 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 20 percent change in the
maximum aggregate offering price set forth in the
"Calculations of Registration Fee" table in the effective
Registration Statement; and
(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 Key
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<PAGE>
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, that are incorporated by reference in the Registration
Statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and
(c) 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.
2. Key hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of Key's annual report
pursuant to Section 13(a) or 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 the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933, may be permitted to directors, officers and controlling
persons of Key pursuant to the provisions described under Item 15
above, or otherwise, Key has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Key of expenses incurred or paid by a
director, officer or controlling person of Key in the successful
defense of any action, suit or proceeding) is asserted against Key by
such director, officer or controlling person in connection with the
securities being registered, Key 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 Act
and will be governed by the final adjudication of such issue.
4. Key hereby undertakes that:
(a) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act, as amended, shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(b) 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.
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5. Key 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 Section 305(b)(2) of
the Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Denver, State of Colorado.
KEY PRODUCTION COMPANY, INC.
By: /s/ F.H. MERELLI
----------------------
F.H. Merelli
Chairman, President and
Chief Executive Officer
Date: July 27, 1999
-------------
POWER OF ATTORNEY
The undersigned directors and officers of Key Production Company, Inc. do
hereby constitute and appoint F.H. Merelli, Monroe W. Robertson and Cathy L.
Anderson, and each of them, with full power of substitution, our true and lawful
attorneys-in-fact to sign and execute, on behalf of the undersigned, any and all
amendments (including post-effective amendments) to this Registration Statement;
and each of the undersigned does hereby ratify and confirm all that said
attorneys-in-fact shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities indicated on July 27, 1999.
-------
NAME OF SIGNATURE TITLE
/s/ F.H. Merelli Chairman, President and Chief Executive Officer
- ---------------------------- (Principal Executive Officer)
F.H. Merelli
/s/ Monroe W. Robertson Senior Vice President and Secretary
- ---------------------------- (Principal Financial Officer)
Monroe W. Robertson
/s/ Cathy L. Anderson Controller
- ---------------------------- (Principal Accounting Officer)
Cathy L. Anderson
/s/ Cortlandt S. Dietler Director
- ----------------------------
Cortlandt S. Dietler
/s/ L. Paul Teague Director
- ----------------------------
L. Paul Teague
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
4.2(a) -- Form of Senior Indenture by and between Key Production Company, Inc. and __________________,
as trustee, including a form of senior debt security.
4.2(b) -- Form of Senior Subordinated Indenture by and between Key Production Company, Inc. and
____________________, as trustee including a form of senior subordinated debt security.
4.2(c) -- Form of Junior Subordinated Indenture by and between Key Production Company, Inc. and
____________________, as trustee including a form of junior subordinated debt security.
5.1 -- Opinion of Holme Roberts & Owen LLP regarding legality of securities being registered.
12.1 -- Computation of ratios of earnings to fixed charges.
23.1 -- Consent of Independent Public Accountants.
23.2 -- Consent of Holme Roberts & Owen LLP (included in Exhibit 5.1).
23.3 -- Consent of Ryder Scott Company, L.P.
24.1 -- Power of Attorney (included in Part II as a part of the signature pages of the Registration
Statement).
</TABLE>
<PAGE>
EXHIBIT 4.2(a)
KEY PRODUCTION COMPANY, INC.
Issuer
AND
_________________________
Trustee
SENIOR DEBT SECURITIES
_______________________
INDENTURE
DATED AS OF _________________, _____
_______
_______________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
Definitions and Incorporation by Reference......................................................................... 1
Section 1.01. Definitions......................................................................................... 1
Section 1.02. Other Definitions................................................................................... 6
Section 1.03. Incorporation by Reference of Trust Indenture Act................................................... 6
Section 1.04. Rules of Construction............................................................................... 7
ARTICLE TWO
The Securities..................................................................................................... 7
Section 2.01. Form and Dating..................................................................................... 7
Section 2.02. Execution and Authentication........................................................................ 9
Section 2.03. Registrar and Paying Agent.......................................................................... 9
Section 2.04. Paying Agent to Hold Money in Trust................................................................. 9
Section 2.05. Securityholder Lists................................................................................ 10
Section 2.06. Transfer and Exchange............................................................................... 10
Section 2.07. Replacement Securities.............................................................................. 10
Section 2.08. Outstanding Securities.............................................................................. 11
Section 2.09. Temporary Securities................................................................................ 11
Section 2.10. Cancellation........................................................................................ 11
Section 2.11. Defaulted Interest.................................................................................. 12
Section 2.12. Treasury Securities................................................................................. 12
Section 2.13. CUSIP Numbers....................................................................................... 12
Section 2.14. Deposit of Moneys................................................................................... 12
Section 2.15. Book-Entry Provisions for Global Security........................................................... 12
ARTICLE THREE
Redemption......................................................................................................... 14
Section 3.01. Notices to Trustee.................................................................................. 14
Section 3.02. Selection of Securities to be Redeemed.............................................................. 14
Section 3.03. Notice of Redemption................................................................................ 14
Section 3.04. Effect of Notice of Redemption...................................................................... 15
Section 3.05. Deposit of Redemption Price......................................................................... 15
Section 3.06. Securities Redeemed in Part......................................................................... 15
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE FOUR
Covenants.......................................................................................................... 16
Section 4.01. Payment of Securities............................................................................... 16
Section 4.02. Maintenance of Office or Agency..................................................................... 16
Section 4.03. Compliance Certificate.............................................................................. 16
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence; Maintenance of Properties..................... 16
ARTICLE FIVE
Successor Corporation.............................................................................................. 17
Section 5.01. When Company May Merge, Etc......................................................................... 17
ARTICLE SIX
Defaults and Remedies.............................................................................................. 18
Section 6.01. Events of Default................................................................................... 18
Section 6.02. Acceleration........................................................................................ 20
Section 6.03. Other Remedies...................................................................................... 20
Section 6.04. Waiver of Existing Defaults......................................................................... 20
Section 6.05. Control by Majority................................................................................. 21
Section 6.06. Limitation on Suits................................................................................. 21
Section 6.07. Rights of Holders to Receive Payment................................................................ 21
Section 6.08. Collection Suit by Trustee.......................................................................... 21
Section 6.09. Trustee May File Proofs of Claim.................................................................... 22
Section 6.10. Priorities.......................................................................................... 22
Section 6.11. Undertaking for Costs............................................................................... 22
ARTICLE SEVEN
Trustee............................................................................................................ 23
Section 7.01. Duties of Trustee................................................................................... 23
Section 7.02. Rights of Trustee................................................................................... 24
Section 7.03. Individual Rights of Trustee........................................................................ 25
Section 7.04. Trustee's Disclaimer................................................................................ 25
Section 7.05. Notice of Defaults.................................................................................. 25
Section 7.06. Reports by Trustee to Holders....................................................................... 25
Section 7.07. Compensation and Indemnity.......................................................................... 26
Section 7.08. Replacement of Trustee.............................................................................. 26
Section 7.09. Successor Trustee by Merger, Etc.................................................................... 27
Section 7.10. Eligibility; Disqualification....................................................................... 27
Section 7.11. Preferential Collection of Claims Against Company................................................... 27
</TABLE>
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<TABLE>
<S> <C>
ARTICLE EIGHT
Discharge of Indenture............................................................................................. 27
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations.................................... 27
Section 8.02. Survival of the Company's Obligations............................................................... 30
Section 8.03. Application of Trust Money.......................................................................... 30
Section 8.04. Repayment to the Company............................................................................ 31
Section 8.05. Reinstatement....................................................................................... 31
ARTICLE NINE
Amendments, Supplements and Waivers................................................................................ 31
Section 9.01. Without Consent of Holders.......................................................................... 31
Section 9.02. With Consent of Holders............................................................................. 32
Section 9.03. Compliance with Trust Indenture Act................................................................. 33
Section 9.04. Revocation and Effect of Consents................................................................... 33
Section 9.05. Notation on or Exchange of Securities............................................................... 34
Section 9.06. Trustee to Sign Amendments, Etc..................................................................... 34
ARTICLE TEN
Miscellaneous...................................................................................................... 34
Section 10.01. Trust Indenture Act Controls........................................................................ 34
Section 10.02. Notices............................................................................................. 34
Section 10.03. Communications by Holders with Other Holders........................................................ 35
Section 10.04. Certificate and Opinion as to Conditions Precedent.................................................. 35
Section 10.05. Statements Required in Certificate or Opinion....................................................... 36
Section 10.06. Rules by Trustee and Agents......................................................................... 36
Section 10.07. Legal Holidays...................................................................................... 36
Section 10.08. Governing Law....................................................................................... 36
Section 10.09. No Adverse Interpretation of Other Agreements....................................................... 36
Section 10.10. No Recourse Against Others.......................................................................... 37
Section 10.11. Successors and Assigns.............................................................................. 37
Section 10.12. Duplicate Originals................................................................................. 37
Section 10.13. Severability........................................................................................ 37
</TABLE>
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<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ----------------------- ---------
- --------------------------------------------------------
<S> <C>
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................... 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)............................................... 10.03
(c)............................................... 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)............................................... 10.02
(d)................................................ 7.06
314(a)...................................... 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................ 10.04
(c)(2)............................................ 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)............................................... 10.05
(f)................................................ N.A.
315(a).......................................... 7.01(b)
(b)......................................... 7.05; 10.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................ 10.01
</TABLE>
N.A. means Not Applicable.
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<PAGE>
INDENTURE dated as of ______________________, ____, by and among KEY
PRODUCTION COMPANY, INC., a Delaware corporation (the "Company"), and , (the
"Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's debt securities issued
under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means Title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other
<PAGE>
equity interests, whether now outstanding or issued after the applicable Issue
Date, including, without limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any liability
of such Person (other than accounts payable, other trade payables and accrued
expenses incurred in the ordinary course of such Person's business) (a) for
borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent purchase price which, as of the date of incurrence thereof is
not required to be recorded as a liability in accordance with GAAP), or (c) in
respect of Capitalized Lease Obligations (to the extent of the Attributable Debt
in respect thereof), (ii) any Indebtedness of others that such Person has
guaranteed to the extent of the guarantee, (iii) to the extent not otherwise
included, the obligations of such Person under Currency Agreements or Interest
Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such
agreements, in accordance with GAAP, and (iv) all Indebtedness of others
- 2 -
<PAGE>
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person. The amount of Indebtedness of any Person at any date
shall be (a) the outstanding balance at such date of all unconditional
obligations as described above, net of any unamortized discount to be accounted
for as Interest Expense, in accordance with GAAP, (b) the maximum liability of
such Person for any contingent obligations under clause (ii) above at such date,
net of, any unamortized discount to be accounted for as Interest Expense in
accordance with GAAP and (c) in the case of clause (iv) above, the lesser of (1)
the fair market value of any asset subject to a Lien securing the Indebtedness
of others on the date that the Lien attaches and (2) the amount of the
Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time to
time, including pursuant to any Authorizing Resolution or supplemental indenture
pertaining to any Series.
"Interest Expense" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses; with respect to the Company and its Restricted Subsidiaries,
but excluding its Unrestricted Subsidiaries, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate swap
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates with respect to Indebtedness
permitted to be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
- 3 -
<PAGE>
"Issue Date" means, with respect to any Series of Securities, the date on
which the Securities of such Series are originally issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means Indebtedness
of such Person for which (i) the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
incurred within 90 days after the acquisition of such property and (ii) no other
assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness. Indebtedness which is otherwise Non-Recourse
Indebtedness will not lose its character as Non-Recourse Indebtedness because
there is recourse to the borrower or any other Person for (i) environmental
warranties and indemnities, or (ii) indemnities for and liabilities arising from
fraud, misrepresentation, misapplication or non-payment of rents, profits,
insurance and condemnation proceeds and other sums actually received by the
borrower from secured assets to be paid to the lender, waste and mechanics'
liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
- 4 -
<PAGE>
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is not an
Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor agency
performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which would
constitute a "significant subsidiary" as defined in Rule 1.02 of Regulation S-X
under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor
serving hereunder.
"Trust Officer" means the Chairman of the Board, the President, any Vice
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary
- 5 -
<PAGE>
receipt from any amount received by the custodian in respect of the U.S.
government obligation or the specific payment of interest on or principal of the
U.S. government obligation evidenced by such depositary receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so designated
by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Agent Members".......... 2.15
"Business Day"........... 10.07
"Custodian".............. 6.01
"Depositary"............. 2.15
"Event of Default"....... 6.01
"Legal Holiday".......... 10.07
"Paying Agent"........... 2.03
"Registrar".............. 2.03
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture securities" means the Securities.
"Indenture security holder" means a Securityholder.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "institutional trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Securities or a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
- 6 -
<PAGE>
Section 1.04. 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) words in the singular include the plural, and in the plural include the
singular; and
(5) provisions apply to successive events and transactions.
ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
The aggregate principal amount of Securities that may be issued under this
Indenture is unlimited. The Securities may be issued from time to time in one
or more Series. Each Series shall be created by an Authorizing Resolution or a
supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate principal
amount) of the Series and, if any Securities of a Series are to be issued at a
discount from their face amount, the method of computing the accretion of such
discount;
(3) the interest rate or method of calculation of the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the Series;
(6) the dates when, places where and manner in which principal and interest
are payable;
(7) the Registrar and Paying Agent;
- 7 -
<PAGE>
(8) the terms of any mandatory (including any sinking fund requirements)
or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form and the
terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security and
the terms of any such global Security;
(13) if payments of principal or interest may be made in a currency other
than that in which Securities are denominated, the manner for determining such
payments;
(14) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in addition to
or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if different
from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing Resolution
or supplemental indenture otherwise provides, shall be in the form of Exhibit A;
(18) any terms that may be required by or advisable under applicable law;
(19) the percentage of the principal amount of the Securities which is
payable if the maturity of the Securities is accelerated in the case of
Securities issued at a discount from their face amount; and
(20) any other terms in addition to or different from those contained in
this Indenture.
All Securities of one Series 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 pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
- 8 -
<PAGE>
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until 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 shall authenticate Securities for original issue upon receipt
of an Officers' Certificate of the Company. Each Security shall be dated the
date of its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. 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. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify the
Trustee in writing of the name and address of any such Agent and the Trustee
shall have the right to inspect the Securities register at all reasonable times
to obtain copies thereof, and the Trustee shall have the right to rely upon such
register as to the names and addresses of the Holders and the principal amounts
and certificate numbers thereof. If the Company fails to maintain a Registrar
or Paying Agent or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of Securityholders
and 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 and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money held
- 9 -
<PAGE>
by it to the Trustee. Upon doing so the Paying Agent shall have no further
liability for the money.
Section 2.05. Securityholder Lists.
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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days before each semi-annual 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 Securityholders.
Section 2.06. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-01(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced, including the
acquisition of
- 10 -
<PAGE>
such Security by a bona fide purchaser. The Company or the Trustee may charge
the Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it and those described in this Section. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
cancellation. Unless the Authorizing Resolution so provides, the Company may
not issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
- 11 -
<PAGE>
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful
manner if, after notice given by the Company to the Trustee of the proposed
payment, such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each interest payment date and
maturity date with respect to each Series of Securities, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments due on such interest payment date or maturity date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such interest payment date or maturity date, as the case may
be.
Section 2.15. Book-Entry Provisions for Global Security.
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture
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relating to such Securities (the "Depository") or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian for such Depository
and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the global Security, an equal aggregate principal amount of definitive
Securities of authorized denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
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ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than the minimum
denomination for the Series. Securities and portions of them it selects shall be
in amounts equal to the minimum denomination for the Series or an integral
multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
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(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to accrue on
and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the mandatory
redemption or the optional redemption provisions, as applicable.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall deliver to the Trustee at least 15 days prior to the date on which notice
of redemption is to be mailed or such shorter period as may be satisfactory to
the Trustee, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Paying
Agent immediately available funds sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for each Holder a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An
installment of principal or interest shall be considered paid on the date it is
due, if on that date the Paying Agent holds money designated for and sufficient
to pay the installment.
The Company shall pay interest on overdue principal at the rate borne by
the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior 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 address of the
Trustee.
Section 4.03. 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 whether or not
the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence; Maintenance
of Properties.
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments
and governmental charges or levies imposed upon the Company and its Restricted
Subsidiaries or upon the income or profits of the Company and its Restricted
Subsidiaries or upon property or any part thereof belonging to the Company and
its Restricted Subsidiaries before the same shall be in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such property or any part thereof; provided, however, that
the Company shall not be required to cause to be paid or discharged any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the nonpayment
thereof does not, in the judgment of the Company, materially adversely affect
the ability of the Company and the Restricted Subsidiaries to pay all
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obligations under this Indenture when due; and provided further, that the
Company shall not be required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the Company, such
payment shall not be advantageous to the Company in the conduct of its business
and if the failure so to pay or discharge does not, in its judgment, materially
adversely affect the ability of the Company and the Restricted Subsidiaries to
pay all obligations under this Indenture when due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company and each of its
Restricted Subsidiaries; provided, however, that nothing in this subsection (b)
shall prevent a consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five or any other
provision or the Authorizing Resolution or supplemental indenture pertaining to
a Series, and the Company need not maintain the corporate existence of an
immaterial Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair, working order and
condition (reasonable wear and tear excepted) and from time to time make all
needful and proper repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection therewith may be properly
and advantageously conducted at all times; provided, however, that nothing in
this subsection (c) shall prevent the Company from discontinuing the operation
and maintenance of any such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the ability of the Company and the
Restricted Subsidiaries to pay all obligations under this Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, Etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
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The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" on a Series occurs if, voluntarily or involuntarily,
whether by operation of law or otherwise, any of the following occurs:
(1) the failure by the Company to pay interest on any Security of
such Series when the same becomes due and payable and the continuance of any
such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of
any Security of such Series when the same becomes due and payable at maturity,
upon acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to
comply in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $5
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to
make any principal or interest payment in an amount of $5 million or more,
individually or in the aggregate, in respect of Indebtedness for borrowed money
(other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary within 30 days of such principal or interest becoming due and payable
(after giving effect to any applicable grace period set forth in the documents
governing such Indebtedness);
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(6) a final judgment or judgments in an amount of $5 million or
more, individually or in the aggregate, for the payment of money having been
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments is not covered
by a policy of insurance, satisfied, stayed, annulled or rescinded within 90
days of being entered;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a Custodian for all or
substantially all of the property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or an Restricted
Subsidiary that is a Significant Subsidiary, and the order or decree remains
unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount of the then outstanding Securities of the applicable
Series notify the Company and the Trustee, of the Default and (except in the
case of a default with respect to Article Five (or any replacement provisions as
contemplated by Article Five)) the Company does not cure the Default within 90
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." If such
a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
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Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default with respect to the
Company resulting from sub-clauses (7) or (8) above), shall have occurred and be
continuing under the Indenture, the Trustee by notice to the Company, or the
Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event of
Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default on a Series occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Series or to enforce the performance
of any provision in the Securities or this Indenture applicable to the Series.
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 Securityholder 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 Existing Defaults.
Subject to Section 9.02, the Holders of a majority in principal amount of
the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is cured and stops continuing,
and any Event of Default arising therefrom shall be deemed to have been cured;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
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Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding Securities
of a Series may 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 it with respect to such Series. The Trustee, however, may refuse
to follow any direction (i) that conflicts with law or this Indenture, (ii)
that, subject to Section 7.01, the Trustee determines is unduly prejudicial to
the rights of other Securityholders, or (iii) that would involve the Trustee in
personal liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to this
Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 90 days after
receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request shall
have been given to the Trustee pursuant to this Section 6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
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 Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee
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of an express trust against the Company for the whole amount of principal and
interest remaining unpaid.
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
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Securityholders of the Series for amounts due and unpaid on the
Series for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Series for principal and interest, respectively; and
Third: to the Company as its interests may appear.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
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 the 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
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Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a majority in
principal amount of the Securities, exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(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 his Indenture. The Trustee,
however, shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or other facts or matters
stated herein.
(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 paragraph does not limit the effect of paragraph (b) of this
Section.
(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.
(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 or any other direction of the Holders permitted
hereunder.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
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(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
(g) None of the provisions contained in 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 or in the exercise of any of its rights
or powers, if there shall be reasonable grounds for believing that the repayment
of such funds or adequate indemnity against such liability is not reasonably
assured to it.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting on any document, resolution, certificate, instrument, report, or
direction 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, resolution, certificate, instrument, report, or direction.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which shall conform to
Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate, Opinion of Counsel or any other direction
of the Company permitted hereunder.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of such
counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
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(g) For all purposes under this Indenture, the Trustee shall not be deemed
to have notice or knowledge of any Event of Default (other than under Section
6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in the
Trustee's corporate trust office has actual knowledge thereof or unless written
notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
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 Agent may do the
same with like rights. The Trustee, however, must comply with Sections 7.10 and
7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture, the Securities or of any prospectus used to sell the Securities; it
shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default on a Series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of the Series notice of
the Default (which shall specify any uncured Default known to it) within 90 days
after it occurs. Except in the case of a default in payment of principal of or
interest on a Series, the Trustee may withhold the notice if and so long as the
board of directors of the Trustee, the executive or any trust committee of such
directors and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interests of Holders of the Series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on
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which the Securities are listed. The Company agrees to notify the Trustee of
each national securities exchange on which the Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee or predecessor trustee from time to
time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the Trustee
shall have a claim prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities. When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01 or in
connection with Article Six hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has been a
Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
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(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, 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. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges with or into or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $10,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations.
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
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(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii) obligations
listed in Section 8.02, subject to compliance with this Section 8.01. The
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to such
Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust with
the Trustee, pursuant to an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee, money in U.S. dollars or U.S.
government obligations or a combination thereof in such amounts and at such
times as are sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of and interest on the
outstanding Securities of such Series to maturity or redemption; provided,
however, that the Trustee (or other qualifying trustee) shall have received an
irrevocable written order from the Company instructing the Trustee (or other
qualifying trustee) to apply such money or the
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proceeds of such U.S. government obligations to said payments with respect to
the Securities of such Series to maturity or redemption;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this Indenture or
a breach or violation of, or constitute a default under, any other material
instrument or agreement to which the Company or any of its Subsidiaries is a
party or by which it or any of their property is bound;
(4) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in the United States,
in form and substance reasonably satisfactory to the Trustee, to the effect that
(A) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the Issue Date pertaining to such Series,
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 state that,
or (ii) in the event the Company elects paragraph (c) hereof, the Company shall
deliver to the Trustee an Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to the effect that, in the
case of clauses (i) and (ii), Holders of the Securities of such Series will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such deposit and the defeasance contemplated hereby and will be
subject to federal income tax in the same amounts and in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred;
(5) The Company shall have delivered to the Trustee an Officers'
Certificate, stating that the deposit under clause (1) was not made by the
Company with the intent of preferring the Holders of the Securities of such
Series over any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or others;
(6) The Company shall have delivered to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, to the effect that, (A) the
trust funds will not be subject to the rights of Holders of Indebtedness of the
Company other than the Securities of such Series and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the 91st
day following the deposit and that no Holder of Securities of such Series is an
insider of the Company, after the 91st day following the deposit, the trust
funds will not be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally; and
(7) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent specified
herein relating to the defeasance contemplated by this Section 8.01 have been
complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the
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time of such deposit, for the giving of the notice of such redemption or
redemptions by the Trustee in the name and at the expense of the Company.
(e) In addition to the Company's rights above under this Section 8.01, the
Company may terminate all of its obligations under this Indenture with respect
to a Series when:
(1) All Securities of such Series theretofore authenticated and
delivered (other than Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.07 and Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust) have been delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee for cancellation have become
due and payable and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for that purpose an
amount of money sufficient to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee for cancellation, for
principal of and interest;
(2) The Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) The Company has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Securities at maturity or
redemption, as the case may be; and
(4) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture have been
complied with.
Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
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Section 8.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
If the Trustee is unable to apply any money or U.S. government obligations
in accordance with Section 8.01 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 relating to the Series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee is permitted to apply all such money or U.S. government
obligations in accordance with Section 8.01; provided, however, that (a) if the
Company has made any payment of interest on or principal of any Securities of
the Series because of the reinstatement of their 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 and
(b) unless otherwise required by any legal proceeding or any order or judgment
of any court or governmental authority, the Trustee shall return all such money
or U.S. government obligations to the Company promptly after receiving a written
request therefor at any time, if such reinstatement of the Company's obligations
has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
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(3) to provide that specific provisions of this Indenture shall not apply
to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in place of
certificated Securities; and
(6) to make any other change that does not adversely affect the rights of
Securityholders.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to any Securityholder of such Series but
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series
affected, however, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any Security or
alter the provisions (including related definitions) with respect to redemption
of Securities pursuant to Article Three hereof or with respect to any
obligations on the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution or supplemental
indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment of the
principal of or interest on any Security; or
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(7) make any Security payable at a place or in money other than that stated
in the Security, or impair the right of any Securityholder to bring suit as
permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or more
Series does not affect the interests of Securityholders of any other Series.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder shall bind the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. Subject to the following paragraph, any
such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(7) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security; provided, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal of and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
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Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee, at
which time the Trustee shall place an appropriate notation on the Security about
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.
Section 9.06. Trustee to Sign Amendments, Etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver 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 or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. 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 TIA,
the required provision shall control.
Section 10.02. Notices.
Any order, consent, notice or communication shall be sufficiently given if
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
Key Production Company, Inc.
707 Seventeenth St., Suite 3300
Denver, CO 80202-3404
Telecopy No.: (303) 295-3494
Attention: Chief Financial Officer
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if to the Trustee:
_________________________
_________________________
Telecopy No.: _____________
Attention: _________________
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 mailed to a Securityholder shall be mailed to
him by first class mail at his address as it appears on the registration books
of the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.
If the Company mails notice or communications to the Securityholders, it
shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders 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 ss. 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 10.05) stating that, in the opinion of such counsel, all such conditions
precedent and covenants, compliance with which constitutes a condition
precedent, if any, provided for in this Indenture relating to the proposed
action or inaction, have been complied with and that any such section does not
conflict with the terms of the Indenture.
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Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, 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
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. A
"Business Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
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Section 10.10. No Recourse Against Others.
All liability described in paragraph 12 of the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
Section 10.11. Successors and Assigns.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate 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.
Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture or in
the Securities of a Series shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Securities.
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated:__________________, ____ KEY PRODUCTION COMPANY, INC.
By: _________________________________
Name: _________________________________
Title:_________________________________
Dated: _________________, _______________________________________,
as Trustee
By: _________________________________
Name: _________________________________
Title:_________________________________
(SEAL)
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Exhibit A
No._______________CUSIP No.:__________________
____________________________________________________
[Title of Security]
KEY PRODUCTION COMPANY, INC., a Delaware corporation, promises to pay to
_______________________________________ or registered assigns the principal sum
of __________________________ [Dollars] on ____________________________________
[Title of Security].
Interest Payment Dates: _________________________________________________, and
Record Dates: ____________________________________________________________, and
Authenticated: _____________________________________________________.
Dated:__________________, ____ KEY PRODUCTION COMPANY, INC.
[SEAL]
By: _____________________________ Title: _________________________________
By: _____________________________ Title: __________________________________
_______________________________________, as Trustee, certifies that this is one
of the Securities referred to in the within mentioned Indenture.
Dated: _________________, ____
[SEAL]
By: _____________________________ Title: _________________________________
By: _____________________________ Title: __________________________________
___________________________________
Authorized Signatory
A - 1
<PAGE>
KEY PRODUCTION COMPANY, INC. ____________________________
[Title of Security]
1. Interest.
KEY PRODUCTION COMPANY, INC. (the "Company"), a Delaware corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on
____________________ and ________________ of each year until the principal is
paid or made available___________________________ for payment. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid, from
________________19___; provided that, if there is no existing default
______________________________, in the payment of interest, and if this Security
is authenticated between a record date referred to on the face hereof and the
next succeeding interest payment date, interest shall accrue from such interest
payment date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Securities (except defaulted interest,
if any, which will be paid on such special payment date to Holders of record on
such special record date as may be fixed by the Company) to the persons who are
registered Holders of Securities at the close of business on the
__________________________________ [Insert record dates]. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar.
Initially, ________________________________ (the "Trustee") will act as
Paying Agent and __________________________________ Registrar. The Company may
change or appoint any Paying Agent, Registrar or co-Registrar without notice.
The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-
Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
_______________, ____ ("Indenture") among the Company and the Trustee. The
terms of the Securities include those stated in the Indenture (including those
terms set forth in the Authorizing Resolution or supplemental indenture
pertaining to the Securities of the Series of which this Security is a part) and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
("TIA") as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of them.
A - 2
<PAGE>
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental indenture. Requests may be made to: Key Production Company,
Inc., 707 Seventeenth St., Suite 3300, Denver, CO 80202-3404, Attention:
Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or after
_________________, in whole or in part, at the following redemption prices
$_____________________ (expressed as a percentage of their principal amount)
together with interest accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing on
_____________________and ending on ____ __________________in each of the
______________ ____________ following years Percentage
____________________________ __________________________________
____________________________ __________________________________
____________________________ __________________________________
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
_________ Securities or ____________portions of them called for redemption;
provided, that if the Company shall default in the payment of such Security at
the redemption price together with accrued interest, interest shall continue to
accrue at the rate borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
redemption, except the unredeemed part thereof if the Security is redeemed in
part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
A - 3
<PAGE>
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of it
for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor corporation will be
released from those obligations.
11. Trustee Dealings With Company.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not Trustee.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
A - 4
<PAGE>
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance, which
provisions shall for all purposes have the same effect as if set forth herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
A - 5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below:
I or we assign and transfer this Security to:
__________________________________________________________________________
__________________________________________________________________________
(Insert assignee's social security or tax ID number)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
___________________________________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
__________________________________________________________________________
Date:_____________ Your signature:______________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature
Guarantee:____________________
A - 6
<PAGE>
EXHIBIT 4.2(b)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF SENIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF SENIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(a), THE FORM OF SENIOR DEBT INDENTURE (INCLUDING FORM OF SENIOR DEBENTURE)
The form of Senior Subordinated Debt Indenture (including the form of
Senior Subordinated Debenture) (the "Senior Subordinated Debt Indenture")
differs from Exhibit 4.2(a), the form of Senior Debt Indenture (including the
form of Senior Debenture) (the "Senior Debt Indenture"), in the following
respects:
(1) The word "Senior" in the Senior Debt Indenture is changed to the words
"Senior Subordinated" in the Senior Subordinated Debt Indenture; and
(2) Article 11 and the reference to Article 11 in the Table of Contents in
the Senior Subordinated Debt Indenture and paragraph 16 of the form of Senior
Subordinated Debenture are not present in the form of Senior Debt Indenture and
the form of Senior Debenture; and
In addition, other provisions concerning subordination of the Senior
Subordinated Debentures, which are included in the Senior Subordinated Debt
Indenture, are not applicable to, and do not appear in, the Indenture for the
Senior Debentures.
A - 7
<PAGE>
EXHIBIT 4.2(b)
KEY PRODUCTION COMPANY, INC.
Issuer
AND
______________________
Trustee
SENIOR SUBORDINATED DEBT SECURITIES
INDENTURE
DATED AS OF ________________, ____
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
Definitions and Incorporation by Reference................................... 1
Section 1.01. Definitions.............................................. 1
Section 1.02. Other Definitions........................................ 6
Section 1.03. Incorporation by Reference of Trust Indenture Act........ 6
Section 1.04. Rules of Construction.................................... 7
ARTICLE TWO.................................................................. 7
The Securities............................................................... 7
Section 2.01. Form and Dating.......................................... 7
Section 2.02. Execution and Authentication............................. 9
Section 2.03. Registrar and Paying Agent............................... 9
Section 2.04. Paying Agent to Hold Money in Trust...................... 9
Section 2.05. Securityholder Lists..................................... 10
Section 2.06. Transfer and Exchange.................................... 10
Section 2.07. Replacement Securities................................... 10
Section 2.08. Outstanding Securities................................... 11
Section 2.09. Temporary Securities..................................... 11
Section 2.10. Cancellation............................................. 11
Section 2.11. Defaulted Interest....................................... 11
Section 2.12. Treasury Securities...................................... 12
Section 2.13. CUSIP Numbers............................................ 12
Section 2.14. Deposit of Moneys........................................ 12
Section 2.15. Book-Entry Provisions for Global Security................ 12
ARTICLE THREE................................................................ 14
Redemption................................................................... 14
Section 3.01. Notices to Trustee....................................... 14
Section 3.02. Selection of Securities to be Redeemed................... 14
Section 3.03. Notice of Redemption..................................... 14
Section 3.04. Effect of Notice of Redemption........................... 15
Section 3.05. Deposit of Redemption Price.............................. 15
Section 3.06. Securities Redeemed in Part.............................. 15
ARTICLE FOUR................................................................. 16
Covenants.................................................................... 16
Section 4.01. Payment of Securities.................................... 16
Section 4.02. Maintenance of Office or Agency.......................... 16
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<PAGE>
Section 4.03. Compliance Certificate................................... 16
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties................................ 16
ARTICLE FIVE................................................................. 17
Successor Corporation........................................................ 17
Section 5.01. When Company May Merge, etc.............................. 17
ARTICLE SIX.................................................................. 18
Defaults and Remedies........................................................ 18
Section 6.01. Events of Default........................................ 18
Section 6.02. Acceleration............................................. 20
Section 6.03. Other Remedies........................................... 20
Section 6.04. Waiver of Existing Defaults.............................. 20
Section 6.05. Control by Majority...................................... 21
Section 6.06. Limitation on Suits...................................... 21
Section 6.07. Rights of Holders to Receive Payment..................... 21
Section 6.08. Collection Suit by Trustee............................... 22
Section 6.09. Trustee May File Proofs of Claim......................... 22
Section 6.10. Priorities............................................... 22
Section 6.11. Undertaking for Costs.................................... 22
ARTICLE SEVEN................................................................ 23
Trustee...................................................................... 23
Section 7.01. Duties of Trustee........................................ 23
Section 7.02. Rights of Trustee........................................ 24
Section 7.03. Individual Rights of Trustee............................. 25
Section 7.04. Trustee's Disclaimer..................................... 25
Section 7.05. Notice of Defaults....................................... 25
Section 7.06. Reports by Trustee to Holders............................ 25
Section 7.07. Compensation and Indemnity............................... 26
Section 7.08. Replacement of Trustee................................... 26
Section 7.09. Successor Trustee by Merger, etc......................... 27
Section 7.10. Eligibility; Disqualification............................ 27
Section 7.11. Preferential Collection of Claims Against Company........ 27
ARTICLE EIGHT................................................................ 28
Discharge of Indenture....................................................... 28
Section 8.01. Defeasance upon Deposit of Moneys or U.S Government
Obligations.............................................. 28
Section 8.02. Survival of the Company's Obligations.................... 31
Section 8.03. Application of Trust Money............................... 31
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<PAGE>
Section 8.04. Repayment to the Company................................. 31
Section 8.05. Reinstatement............................................ 31
ARTICLE NINE................................................................. 32
Amendments, Supplements and Waivers.......................................... 32
Section 9.01. Without Consent of Holders............................... 32
Section 9.02. With Consent of Holders.................................. 32
Section 9.03. Compliance with Trust Indenture Act...................... 33
Section 9.04. Revocation and Effect of Consents........................ 34
Section 9.05. Notation on or Exchange of Securities.................... 34
ARTICLE TEN.................................................................. 35
Miscellaneous................................................................ 35
Section 10.01 Trust Indenture Act Controls............................. 35
Section 10.02. Notices.................................................. 35
Section 10.03. Communications by Holders with Other Holders............. 36
Section 10.04. Certificate and Opinion as to Conditions Precedent....... 36
Section 10.05. Statements Required in Certificate or Opinion............ 36
Section 10.06. Rules by Trustee and Agents.............................. 37
Section 10.07. Legal Holidays........................................... 37
Section 10.08. Governing Law............................................ 37
Section 10.09. No Adverse Interpretation of Other Agreements............ 37
Section 10.10. No Recourse Against Others............................... 37
Section 10.11. Successors and Assigns................................... 37
Section 10.12. Duplicate Originals...................................... 37
Section 10.13. Severability............................................. 37
ARTICLE ELEVEN............................................................... 38
Subordination................................................................ 38
Section 11.01. Agreement to Subordinate................................. 38
Section 11.02. Certain Definitions...................................... 38
Section 11.03. Liquidation; Dissolution; Bankruptcy..................... 38
Section 11.04. Default on Senior Indebtedness........................... 39
Section 11.05. Acceleration of Securities............................... 39
Section 11.06 When Distributions Must Be Paid Over..................... 39
Section 11.07. Notice by the Company.................................... 40
Section 11.08. Subrogation.............................................. 40
Section 11.09. Relative Rights.......................................... 40
Section 11.10. Subordination May Not Be Impaired by the Company......... 41
Section 11.11. Distribution or Notice to the Representative............. 41
Section 11.12. Rights of the Trustee and Paying Agent................... 41
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness...... 42
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<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
310(a)(1)...................................................................7.10
(a)(2)......................................................................7.10
(a)(3)......................................................................N.A.
(a)(4)......................................................................N.A.
(b)............................................................7.08; 7.10; 10.02
311(a)......................................................................7.11
(b).........................................................................7.11
(c).........................................................................N.A.
312(a)......................................................................2.05
(b)........................................................................10.03
(c)........................................................................10.03
313(a)......................................................................7.06
(b)(1)......................................................................N.A.
(b)(2)......................................................................7.06
(c)........................................................................10.02
(d).........................................................................7.06
314(a)...............................................................7.06; 10.02
(b).........................................................................N.A.
(c)(1).....................................................................10.04
(c)(2).....................................................................10.04
(c)(3)......................................................................N.A.
(d).........................................................................N.A.
(e)........................................................................10.05
(f).........................................................................N.A.
315(a)...................................................................7.01(b)
(b)..................................................................7.05; 10.02
(c)......................................................................7.01(a)
(d)......................................................................7.01(c)
(e).........................................................................6.11
316(a)(last sentence).......................................................2.12
(a)(1)(A)...................................................................6.05
(a)(1)(B)...................................................................6.04
(a)(2)......................................................................N.A.
(b).........................................................................6.07
(c).........................................................................9.04
317(a)(1)...................................................................6.08
(a)(2)......................................................................6.09
(b).........................................................................2.04
318(a).....................................................................10.01
</TABLE>
-----------------------------
N.A. means Not Applicable.
-iv-
<PAGE>
INDENTURE dated as of ___________________, ____, by and among KEY
PRODUCTION COMPANY, INC., a Delaware corporation (the "Company"), and
_____________________, (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's debt securities issued
under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
<PAGE>
"Capitalized Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any liability
of such Person (other than accounts payable, other trade payables and accrued
expenses incurred in the ordinary course of such Person's business) (a) for
borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent purchase price which, as of the date of incurrence thereof is
not required to be recorded as a liability in accordance with GAAP), or (c) in
respect of Capitalized Lease Obligations (to the extent of the Attributable Debt
in respect thereof), (ii) any Indebtedness of others that such Person has
guaranteed to the extent of the guarantee, (iii) to the extent not otherwise
included, the obligations of such Person under Currency Agreements or Interest
Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such
agreements, in accordance with GAAP, and (iv) all Indebtedness of others secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person. The amount of Indebtedness of any Person at any date
shall be (a) the outstanding balance at such date of all unconditional
obligations as described above, net of any unamortized
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<PAGE>
discount to be accounted for as Interest Expense, in accordance with GAAP, (b)
the maximum liability of such Person for any contingent obligations under clause
(ii) above at such date, net of, any unamortized discount to be accounted for as
Interest Expense in accordance with GAAP and (c) in the case of clause (iv)
above, the lesser of (1) the fair market value of any asset subject to a Lien
securing the Indebtedness of others on the date that the Lien attaches and (2)
the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time to
time, including pursuant to any Authorizing Resolution or supplemental indenture
pertaining to any Series.
"Interest Expense" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owned with respect to letters of credit and bankers' acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses; with respect to the Company and its Restricted Subsidiaries,
but excluding its Unrestricted Subsidiaries, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate swap
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates with respect to Indebtedness
permitted to be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date on
which the Securities of such Series are originally issued under this Indenture.
-3-
<PAGE>
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means Indebtedness
of such Person for which (i) the sole legal recourse for collection of principal
and interest on such Indebtedness is against the specific property identified in
the instruments evidencing or securing such Indebtedness and such property was
acquired with the proceeds of such Indebtedness or such Indebtedness was
incurred within 90 days after the acquisition of such property and (ii) no other
assets of such Person may be realized upon in collection of principal or
interest on such Indebtedness. Indebtedness which is otherwise Non-Recourse
Indebtedness will not lose its character as Non-Recourse Indebtedness because
there is recourse to the borrower or any other Person for (i) environmental
warranties and indemnities, or (ii) indemnities for and liabilities arising from
fraud, misrepresentation, misapplication or non-payment of rents, profits,
insurance and condemnation proceeds and other sums actually received by the
borrower from secured assets to be paid to the lender, waste and mechanics'
liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
-4-
<PAGE>
"Restricted Subsidiary" means any Subsidiary of the Company which is not an
Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor agency
performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which would
constitute a "significant subsidiary" as defined in Rule 1.02 of Regulation S-X
under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor
serving hereunder.
"Trust Officer" means the Chairman of the Board, the President, any Vice
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S.
government obligations or a specific payment of interest on or principal of any
such U.S. government obligation held by such custodian for the account of the
holder of a depositary receipt; provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the U.S. government obligation or the specific payment of interest
on or principal of the U.S. government obligation evidenced by such depositary
receipt.
-5-
<PAGE>
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions
Term Defined In Section
---- ------------------
"Agent Members"................. 2.15
"Business Day".................. 10.07
"Custodian"..................... 6.01
"Depositary".................... 2.15
"Event of Default".............. 6.01
"Legal Holiday"................. 10.07
"Paying Agent".................. 2.03
"Registrar"..................... 2.03
"Senior Indebtedness"........... 11.02
"Representative"................ 11.02
Section 1.03. Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
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Section 1.04. 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) words in the singular include the plural, and in the plural include the
singular; and
(5) provisions apply to successive events and transactions.
ARTICLE TWO
The Securities
Section 2.01. Form and Dating
The aggregate principal amount of Securities that may be issued under this
Indenture is unlimited. The Securities may be issued from time to time in one
or more Series. Each Series shall be created by an Authorizing Resolution or a
supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate principal
amount) of the Series and, if any Securities of a Series are to be issued at a
discount from their face amount, the method of computing the accretion of such
discount;
(3) the interest rate or method of calculation of the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the Series;
(6) the dates when, places where and manner in which principal and interest
are payable;
(7) the Registrar and Paying Agent;
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(8) the terms of any mandatory (including any sinking fund requirements)
or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form and the
terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security and
the terms of any such global Security;
(13) if payments of principal or interest may be made in a currency other
than that in which Securities are denominated, the manner for determining such
payments;
(14) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in addition to
or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if different
from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing Resolution
or supplemental indenture otherwise provides, shall be in the form of Exhibit A;
(18) any terms that may be required by or advisable under applicable law;
(19) the percentage of the principal amount of the Securities which is
payable if the maturity of the Securities is accelerated in the case of
Securities issued at a discount from their face amount; and
(20) any other terms in addition to or different from those contained in
this Indenture.
All Securities of one Series 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 pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
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Section 2.02. Execution and Authentication
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities. If an Officer whose
signature is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall nevertheless be valid.
A Security shall not be valid until 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 shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be
dated the date of its authentication.
Section 2.03. Registrar and Paying Agent
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. 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. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify the
Trustee in writing of the name and address of any such Agent and the Trustee
shall have the right to inspect the Securities register at all reasonable times
to obtain copies thereof, and the Trustee shall have the right to rely upon such
register as to the names and addresses of the Holders and the principal amounts
and certificate numbers thereof. If the Company fails to maintain a Registrar
or Paying Agent or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.04. Paying Agent to Hold Money in Trust
Each Paying Agent shall hold in trust for the benefit of Securityholders
and 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 and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon doing so the Paying Agent shall have no further liability
for the money.
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Section 2.05. Securityholder Lists
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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual 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 Securityholders.
Section 2.06. Transfer and Exchange
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced, including the
acquisition of such Security by a bona fide purchaser. The Company or the
Trustee may charge the Holder for expenses in replacing a Security.
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Section 2.08. Outstanding Securities
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it and those described in this Section. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
cancellation. Unless the Authorizing Resolution so provides, the Company may
not issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record
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date and a payment date which shall be reasonably satisfactory to the Trustee.
At least 15 days before such special record date, the Company shall mail to each
Securityholder a notice that states the record date, the payment date and the
amount of defaulted interest to be paid. On or before the date such notice is
mailed, the Company shall deposit with the Paying Agent money sufficient to pay
the amount of defaulted interest to be so paid. The Company may pay defaulted
interest in any other lawful manner if, after notice given by the Company to the
Trustee of the proposed payment, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.12. Treasury Securities
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys
Prior to 11:00 a.m. New York City time on each interest payment date and
maturity date with respect to each Series of Securities, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments due on such interest payment date or maturity date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such interest payment date or maturity date, as the case may
be.
Section 2.15. Book-Entry Provisions for Global Security
(a) Any global Security of a Series initially shall (i) be registered in
the name of the depository who shall be identified in the Authorizing Resolution
or supplemental indenture relating to such Securities (the "Depository") or the
nominee of such Depository, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear any required legends. Members of, or
participants in, the Depository ("Agent Members") shall have no rights under
this Indenture with respect to any global Security held on their behalf by the
Depository, or the Trustee as its custodian, or under the global Security, and
the Depository may be treated by the Company, the
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Trustee and any agent of the Company or the Trustee as the absolute owner of the
global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the global Security, an equal aggregate principal amount of definitive
Securities of authorized denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
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ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than the minimum
denomination for the Series. Securities and portions of them it selects shall be
in amounts equal to the minimum denomination for the Series or an integral
multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
Section 3.03. Notice of Redemption
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed.
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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;
(4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to accrue on
and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the mandatory
redemption or the optional redemption provisions, as applicable.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall deliver to the Trustee at least 15 days prior to the date on which notice
of redemption is to be mailed or such shorter period as may be satisfactory to
the Trustee, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
Section 3.05. Deposit of Redemption Price
On or before the redemption date, the Company shall deposit with the Paying
Agent immediately available funds sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for each Holder a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An
installment of principal or interest shall be considered paid on the date it is
due, if on that date the Paying Agent holds money designated for and sufficient
to pay the installment; provided, however, that money held by the Paying Agent
for the benefit of holders of Senior Indebtedness pursuant to the provisions of
Article 11 hereof shall not be considered paid within the meaning of this
Section 4.01.
The Company shall pay interest on overdue principal at the rate borne by
the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior 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 address of the
Trustee.
Section 4.03. 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 whether or not
the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments and
governmental charges or levies imposed upon the Company and its Restricted
Subsidiaries or upon the income or profits of the Company and its
Restricted Subsidiaries or upon property or any part thereof belonging to
the Company and its Restricted Subsidiaries before the same shall be in
default, as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such property or any
part thereof; provided, however, that the Company shall not be required to
cause to be paid or discharged any such tax, assessment, charge, levy or
claim so long
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as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the nonpayment thereof does not, in the
judgment of the Company, materially adversely affect the ability of the
Company and the Restricted Subsidiaries to pay all obligations under this
Indenture when due; and provided further, that the Company shall not be
required to cause to be paid or discharged any such tax, assessment,
charge, levy or claim if, in the judgment of the Company, such payment
shall not be advantageous to the Company in the conduct of its business and
if the failure so to pay or discharge does not, in its judgment, materially
adversely affect the ability of the Company and the Restricted Subsidiaries
to pay all obligations under this Indenture when due;
(b) cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence of the Company and each of its
Restricted Subsidiaries; provided, however, that nothing in this subsection
(b) shall prevent a consolidation or merger of the Company or any
Restricted Subsidiary not prohibited by the provisions of Article Five or
any other provision or the Authorizing Resolution or supplemental indenture
pertaining to a Series, and the Company need not maintain the corporate
existence of an immaterial Restricted Subsidiary; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair, working order and
condition (reasonable wear and tear excepted) and from time to time make
all needful and proper repairs, renewals, replacements, betterments and
improvements thereto, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this subsection (c) shall prevent the
Company from discontinuing the operation and maintenance of any such
properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business and not disadvantageous in any
material respect to the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the
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Company with the same effect as if it had been named herein as the "Company" and
all such obligations of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default
An "Event of Default" on a Series occurs if, voluntarily or involuntarily,
whether by operation of law or otherwise, any of the following occurs:
(1) the failure by the Company to pay interest on any Security of such
Series when the same becomes due and payable and the continuance of any such
failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at maturity, upon
acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply in
all material respects with any of its agreements or covenants in, or provisions
of, the Securities of such Series, or this Indenture (as they relate thereto)
and such failure continues for the period and after the notice specified below
(except in the case of a default with respect to Article Five (or any
replacement provisions as contemplated by Article Five), which will constitute
an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $30
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make any
principal or interest payment in an amount of $30 million or more, individually
or in the aggregate, in respect of Indebtedness for borrowed money (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary within 30
days of such principal or interest becoming due and payable
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(after giving effect to any applicable grace period set forth in the documents
governing such Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or more,
individually or in the aggregate, for the payment of money having been entered
by a court or courts of competent jurisdiction against the Company or any of its
Restricted Subsidiaries and such judgment or judgments is not covered by a
policy of insurance, satisfied, stayed, annulled or rescinded within 90 days of
being entered;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment (except in the case of a Restricted
Subsidiary, to the Company) for the benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Restricted Subsidiary that
is a Significant Subsidiary as debtor in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted Subsidiary
that is a Significant Subsidiary or a Custodian for all or substantially
all of the property of the Company or any Restricted Subsidiary that is a
Significant Subsidiary, or
(C) orders the liquidation of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, and the order or decree remains unstayed
and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount of the then outstanding Securities of the applicable
Series notify the Company and the Trustee, of the Default and (except in the
case of a default with respect to Article Five (or any replacement provisions as
contemplated by Article Five)) the Company does not cure the Default within 90
days after receipt of the notice. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." If such
a Default is cured within such time period, it ceases.
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The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
Section 6.02. Acceleration
If an Event of Default (other than an Event of Default with respect to the
Company resulting from sub-clauses (7) or (8) above), shall have occurred and be
continuing under the Indenture, the Trustee by notice to the Company, or the
Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event of
Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies
If an Event of Default on a Series occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Series or to enforce the performance
of any provision in the Securities or this Indenture applicable to the Series.
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 Securityholder 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 Existing Defaults
Subject to Section 9.02, the Holders of a majority in principal amount of
the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is
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cured and stops continuing, and any Event of Default arising therefrom shall be
deemed to have been cured; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.05. Control by Majority
The Holders of a majority in principal amount of the outstanding Securities
of a Series may 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 it with respect to such Series. The Trustee, however, may refuse
to follow any direction (i) that conflicts with law or this Indenture, (ii)
that, subject to Section 7.01, the Trustee determines is unduly prejudicial to
the rights of other Securityholders, or (iii) that would involve the Trustee in
personal liability.
Section 6.06. Limitation on Suits
A Securityholder of a Series may not pursue any remedy with respect to this
Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 90 days after
receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request shall have
been given to the Trustee pursuant to this Section 6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
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 Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
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Section 6.08. Collection Suit by Trustee
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) 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 of principal and interest remaining unpaid.
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
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Fourth: to the Company as its interests may appear. The Trustee may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
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
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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 the 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, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a majority in
principal amount of the Securities, exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(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 his Indenture. The
Trustee, however, shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture but need
not confirm or investigate the accuracy of mathematical calculations or
other facts or matters stated herein.
(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 paragraph does not limit the effect of paragraph (b) of this
Section.
(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.
(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 or any other direction of the Holders permitted
hereunder.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
(g) None of the provisions contained in 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 or in the exercise of any of its rights
or powers, if there shall be reasonable grounds for believing that the repayment
of such funds or adequate indemnity against such liability is not reasonably
assured to it.
Section 7.02. Rights of Trustee
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting on any document, resolution, certificate, instrument, report, or
direction 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, resolution, certificate, instrument, report, or direction.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which shall conform to
Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate, Opinion of Counsel or any other direction
of the Company permitted hereunder.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of such
counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
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(f) Unless otherwise specifically provided in the Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be deemed
to have notice or knowledge of any Event of Default (other than under Section
6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in the
Trustee's corporate trust office has actual knowledge thereof or unless written
notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
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 Agent may do the
same with like rights. The Trustee, however, must comply with Sections 7.10 and
7.11.
Section 7.04. Trustee's Disclaimer
The Trustee makes no representation as to the validity or adequacy of this
Indenture, the Securities or of any prospectus used to sell the Securities; it
shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
Section 7.05. Notice of Defaults
If a Default on a Series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of the Series notice of
the Default (which shall specify any uncured Default known to it) within 90 days
after it occurs. Except in the case of a default in payment of principal of or
interest on a Series, the Trustee may withhold the notice if and so long as the
board of directors of the Trustee, the executive or any trust committee of such
directors and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interests of Holders of the Series.
Section 7.06. Reports by Trustee to Holders
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA ss.313(a) (but if no event
described in TIA ss.313(2) has occurred within the twelve months preceding the
reporting date no report need be transmitted). The Trustee also shall comply
with TIA ss.313(b).
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A copy of each report at the time of its mailing to Securityholders shall
be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity
The Company shall pay to the Trustee or predecessor trustee from time to
time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the Trustee
shall have a claim prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities. When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01 or in
connection with Article 6 hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee
The Trustee may resign by so notifying the Company The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee The Company may remove the Trustee and any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee for any or no reason,
including if:
(1) the Trustee fails to comply with Section 7.10 after written request by
the Company or any bona fide Securityholder who has been a
Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
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(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, 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. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges with or into or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor trustee.
Section 7.10. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss.310(a)(1). The Trustee shall have a combined capital and surplus of
at least $10,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss.311(a) to the extent indicated therein.
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ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S Government Obligations
(a) The Company may, at its option and at any time, elect to have either
paragraph (b) or paragraph (c) below be applied to the outstanding Securities of
any Series upon compliance with the applicable conditions set forth in paragraph
(d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii) obligations
listed in Section 8.02, subject to compliance with this Section 8.01. The
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to such
Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
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(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance reasonably satisfactory to the Trustee, money in U.S. dollars
or U.S government obligations or a combination thereof in such amounts and
at such times as are sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of and
interest on the outstanding Securities of such Series to maturity or
redemption; provided, however, that the Trustee (or other qualifying
trustee) shall have received an irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee) to apply such money
or the proceeds of such U.S. government obligations to said payments with
respect to the Securities of such Series to maturity or redemption;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this Indenture or a
breach or violation of, or constitute a default under, any other material
instrument or agreement to which the Company or any of its Subsidiaries is
a party or by which it or any of their property is bound;
(4) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in the United
States, in form and substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the Issue
Date pertaining to such Series, 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 state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company shall deliver to the
Trustee an Opinion of Counsel in the United States, in form and substance
reasonably satisfactory to the Trustee, to the effect that, in the case of
clauses (i) and (ii), Holders of the Securities of such Series will not
recognize income, gain or loss for United States federal income tax
purposes as a result of such deposit and the defeasance contemplated hereby
and will be subject to federal income tax in the same amounts and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred;
(5) The Company shall have delivered to the Trustee an Officers'
Certificate, stating that the deposit under clause (1) was not made by the
Company with the intent of preferring the Holders of the Securities of such
Series over any
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other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;
(6) The Company shall have delivered to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, to the effect that, (A)
the trust funds will not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities of such Series and
(B) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of
Securities of such Series is an insider of the Company, after the 91st day
following the deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally; and
(7) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
specified herein relating to the defeasance contemplated by this Section
8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
(e) In addition to the Company's rights above under this Section 8.01, the
Company may terminate all of its obligations under this Indenture with respect
to a Series when:
(1) All Securities of such Series theretofore authenticated and
delivered (other than Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.07 and
Securities for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to the Trustee
for cancellation or all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust solely for that purpose an amount of money sufficient to pay
and discharge the entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) The Company has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Securities at
maturity or redemption, as the case may be; and
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(4) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
Section 8.02. Survival of the Company's Obligations
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money
The Trustee shall hold in trust money or U.S government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement
If the Trustee is unable to apply any money or U.S government obligations
in accordance with Section 8.01 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 relating to the Series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee is permitted to apply all such money or U.S. government
obligations in accordance with Section 8.01; provided, however, that (a) if the
Company has made any payment of interest on or principal of any Securities of
the Series because of the reinstatement of their obligations,
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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 and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S government obligations to the Company promptly after receiving
a written request therefor at any time, if such reinstatement of the Company's
obligations has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall not
apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the rights
of Securityholders.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to any Securityholder of such Series but
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder
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of a Series affected, however, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related definitions) with
respect to redemption of Securities pursuant to Article Three hereof or
with respect to any obligations on the part of the Company to offer to
purchase or to redeem Securities of a Series pursuant to the Authorizing
Resolution or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment of
the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than that
stated in the Security, or impair the right of any Securityholder to bring
suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or more
Series does not affect the interests of Securityholders of any other Series.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section or
under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
Section 9.03. Compliance with Trust Indenture Act
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
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Section 9.04. Revocation and Effect of Consents
A consent to an amendment, supplement or waiver by a Holder shall bind the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security Subject to the following paragraph, any
such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(7) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security; provided, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal of and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities
If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee, at
which time the Trustee shall place an appropriate notation on the Security about
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 Section 9.06 Trustee to Sign Amendments, etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver 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 or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or
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supplemental indenture is authorized or permitted by this Indenture, that it is
not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01 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 TIA,
the required provision shall control.
Section 10.02. Notices
Any order, consent, notice or communication shall be sufficiently given if
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
KEY PRODUCTION COMPANY, INC.
717 Seventeenth St., Suite 3300
Denver, CO 80202-3494
Telecopy No.: (303) 295-3494
Attention: Chief Financial Officer
if to the Trustee:
___________________________________
___________________________________
___________________________________
Telecopy No.:______________________
Attention:_________________________
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 mailed to a Securityholder shall be mailed to
him by first class mail at his address as it appears on the registration books
of the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.
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If the Company mails notice or communications to the Securityholders, it
shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders
Securityholders may communicate pursuant to TIA ss.312(b) with other
Securityholders 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 ss.312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants, compliance with which constitutes a
condition precedent, if any, provided for in this Indenture relating to the
proposed action or inaction, have been complied with and that any such
section does not conflict with the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, 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
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
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Section 10.06. Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. A
"Business Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others
All liability described in paragraph 12 of the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
Section 10.11. Successors and Assigns
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate 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.
Section 10.13. Severability
In case any one or more of the provisions contained in this Indenture or in
the Securities of a Series shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such
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invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate
The Company agrees, and each Securityholder by accepting a Security agrees,
that the indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Indebtedness and that the subordination is for the
benefit of the holders of Senior Indebtedness.
Section 11.02. Certain Definitions
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future) created,
incurred, assumed or guaranteed by the Company (and all renewals, extensions or
refundings thereof), unless the instrument under which such Indebtedness is
created, incurred, assumed or guaranteed provides that such Indebtedness is not
senior or superior in right of payment to the Securities. Notwithstanding
anything to the contrary in the foregoing, Senior Indebtedness shall not include
(i) any Indebtedness of the Company to any of its subsidiaries, (ii) any trade
payables of the Company or (iii) guarantees by the Company or any of its
Subsidiaries of Indebtedness (a) outstanding at the date hereof or (b) which may
be outstanding in the future, except that Senior Indebtedness shall include any
guarantees as may be listed in a supplemental indenture and any other present
and future guarantees that provide by their terms that they constitute Senior
Indebtedness.
Section 11.03. Liquidation; Dissolution; Bankruptcy
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive payment
in full in cash of the principal of and interest (including interest
accruing after the commencement of any such proceeding) to the date of
payment on the Senior Indebtedness before Securityholders shall be entitled
to receive any payment of principal of or interest on Securities; and
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(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but for this
Article shall be made to holders of Senior Indebtedness as their interests
may appear, except that Securityholders may receive securities that are
subordinated to Senior Indebtedness to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior Indebtedness, before any payment is made by the
Company or any person acting on behalf of the Company on account of the
principal or interest of the Securities.
The Company may not pay principal of or interest on the Securities and may
not acquire any Securities for cash or property (other than capital stock of the
Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire them,
if this Article otherwise permits the payment or acquisition at that time, when
the default is cured or waived.
Section 11.05. Acceleration of Securities
If payment of the Securities is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
Section 11.06 When Distributions Must Be Paid Over
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior
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Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this Article
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 11.07. Notice by the Company
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation
After all Senior Indebtedness is paid in full and until the Securities are
paid in full, Securityholders 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 the Securityholders have
been applied to the payment of Senior Indebtedness. A distribution made under
this Article to holders of Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between the Company and Securityholders, a
payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights
This Article defines the relative rights of Securityholders and holders of
Senior Indebtedness Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors of the
Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions otherwise
payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on the
due date because of this Article, the failure is still a Default or Event of
Default.
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Section 11.10. 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 Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Section 11.11. Distribution or Notice to the Representative
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent
Notwithstanding any provision of this Article 11 or any other provision of
this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects
conclusively to assume that no such facts exist. The Trustee or Paying Agent
may continue to make payments on the Securities unless it receives such a notice
at least three business days prior to the date upon which payment is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy,
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receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, Custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of Securities, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee
nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated:__________________, ____ KEY PRODUCTION COMPANY, INC.
By: _________________________________
Name: _________________________________
Title:_________________________________
Dated: _________________, ____ _______________________________________,
as Trustee
By: _________________________________
Name: _________________________________
Title:_________________________________
(SEAL)
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Exhibit A
No.______ CUSIP No.:_______ _________________________________________
[Title of Security]
KEY PRODUCTION COMPANY, INC., a Delaware corporation, promises to pay to or
registered assigns the principal sum of ________________________________________
[Dollars] on ______________________________________ [Title of Security].
Interest Payment Dates: ______________________________________________, and
Record Dates: ____________________________________________________________, and
Authenticated: _____________________________________________________.
Dated:__________________, ____ KEY PRODUCTION COMPANY, INC.
[SEAL]
By: _____________________________ Title: _________________________________
By: _____________________________ Title:__________________________________
Dated: _________________, ____ _______________________________________,
as Trustee, certifies that this is one of the Securities referred to in the
within mentioned Indenture.
[SEAL]
By: _____________________________ Title: _________________________________
By: _____________________________ Title: _________________________________
__________________________________
Authorized Signatory
A-1
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KEY PRODUCTION COMPANY, INC. ________________________________________
[Title of Security]
1. Interest.
KEY PRODUCTION COMPANY, INC. (the "Company"), a Delaware corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on
____________________ and ________________ of each year until the principal is
paid or made available___________________________ for payment. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid, from
________________19___; provided that, if there is no existing default
______________________________, in the payment of interest, and if this Security
is authenticated between a record date referred to on the face hereof and the
next succeeding interest payment date, interest shall accrue from such interest
payment date. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Securities (except defaulted interest,
if any, which will be paid on such special payment date to Holders of record on
such special record date as may be fixed by the Company) to the persons who are
registered Holders of Securities at the close of business on the
__________________________________ [Insert record dates]. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar.
Initially, ________________________________ (the "Trustee") will act as
Paying Agent and __________________________________ Registrar. The Company may
change or appoint any Paying Agent, Registrar or co-Registrar without notice.
The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-
Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
_______________, ____ ("Indenture") among the Company and the Trustee. The
terms of the Securities include those stated in the Indenture (including those
terms set forth in the Authorizing Resolution or supplemental indenture
pertaining to the Securities of the Series of which this Security is a part) and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
("TIA") as in effect on the date of the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of them.
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The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental indenture. Requests may be made to: Key Production Company,
Inc., 717 Seventeenth St., Suite 3300, Denver, Colorado 80202-3404, Attention:
Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or after
_________________, in whole or in part, at the following redemption prices
$_____________________ (expressed as a percentage of their principal amount)
together with interest accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing on _____________________
and ending on ____ __________________ in each of the ______________ ____________
following years Percentage
_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
_________ Securities or ____________portions of them called for redemption;
provided, that if the Company shall default in the payment of such Security at
the redemption price together with accrued interest, interest shall continue to
accrue at the rate borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
**6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
redemption, except the unredeemed part thereof if the Security is redeemed in
part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
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7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of it
for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor corporation will be
released from those obligations.
11. Trustee Dealings With Company.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not Trustee.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
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13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance, which
provisions shall for all purposes have the same effect as if set forth herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities are
subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior
Indebtedness does not include Indebtedness of the Company to any of its
subsidiaries, trade payables of the Company and certain Indebtedness of others
guaranteed by the Company. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination and authorizes the Trustee to give it effect.
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ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below:
I or we assign and transfer this Security to:
___________________________________________________________________________
___________________________________________________________________________
(Insert assignee's social security or tax ID number)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
___________________________________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
___________________________________________________________________________
Date: ______________ Your signature:___________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature
Guarantee:______________________________
A-6
<PAGE>
EXHIBIT 4.2(c)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF JUNIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF JUNIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(b), THE FORM OF SENIOR SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SENIOR
SUBORDINATED DEBENTURE)
The form of Junior Subordinated Debt Indenture (including the form of
Junior Subordinated Debenture) (the "Junior Subordinated Debt Indenture")
differs from Exhibit 4.2(b), the form of Senior Subordinated Debt Indenture
(including the form of Senior Subordinated Debenture) (the "Senior Subordinated
Debt Indenture"), in the following respects:
(1) The words "Senior Subordinated" in the Senior Subordinated Debt
Indenture are changed to the word "Junior Subordinated" in the Junior
Subordinated Debt Indenture, and there are references to Junior
Subordinated Debt in the Junior Subordinated Debt Indenture, but not in the
Senior Subordinated Debt Indenture; and
(3) Provision for the possible right of the Registrant to defer
interest are included in the Junior Subordinated Debt Indenture, but not in
the Senior Subordinated Debt Indenture.
A-7
<PAGE>
EXHIBIT 4.2(c)
KEY PRODUCTION COMPANY, INC.
Issuer
AND
______________________
Trustee
JUNIOR SUBORDINATED DEBT SECURITIES
______________________
INDENTURE
DATED AS OF ________________, ____
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE ............................................................... 1
Definitions and Incorporation by Reference................................. 1
Section 1.01. Definitions.............................................. 1
-----------
Section 1.02. Other Definitions........................................ 6
-----------------
Section 1.03. Incorporation by Reference of Trust Indenture Act........ 6
-------------------------------------------------
Section 1.04. Rules of Construction.................................... 7
---------------------
ARTICLE TWO................................................................ 7
The Securities............................................................. 7
Section 2.01. Form and Dating.......................................... 7
---------------
Section 2.02. Execution and Authentication............................. 8
----------------------------
Section 2.03. Registrar and Paying Agent............................... 9
--------------------------
Section 2.04. Paying Agent to Hold Money in Trust...................... 9
-----------------------------------
Section 2.05. Securityholder Lists..................................... 10
--------------------
Section 2.06. Transfer and Exchange.................................... 10
---------------------
Section 2.07. Replacement Securities................................... 10
----------------------
Section 2.08. Outstanding Securities................................... 11
----------------------
Section 2.09. Temporary Securities..................................... 11
--------------------
Section 2.10. Cancellation............................................. 11
------------
Section 2.11. Defaulted Interest....................................... 12
------------------
Section 2.12. Treasury Securities...................................... 12
-------------------
Section 2.13. CUSIP Numbers............................................ 12
-----------------
Section 2.14. Deposit of Moneys........................................ 12
-----------------
Section 2.15. Book-Entry Provisions for Global Security................ 12
-----------------------------------------
ARTICLE THREE.............................................................. 14
Redemption................................................................. 14
Section 3.01. Notices to Trustee....................................... 14
------------------
Section 3.02. Selection of Securities to be Redeemed................... 14
--------------------------------------
Section 3.03. Notice of Redemption..................................... 14
--------------------
Section 3.04. Effect of Notice of Redemption........................... 15
------------------------------
Section 3.05. Deposit of Redemption Price.............................. 15
---------------------------
Section 3.06. Securities Redeemed in Part.............................. 15
---------------------------
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE FOUR............................................................................................ 16
Covenants............................................................................................... 16
Section 4.01. Payment of Securities............................................................. 16
---------------------
Section 4.02. Maintenance of Office or Agency................................................... 16
-------------------------------
Section 4.03. Compliance Certificate............................................................ 16
----------------------
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence; Maintenance of Properties... 16
-------------------------------------------------------------------------------
ARTICLE FIVE............................................................................................ 17
Successor Corporation................................................................................... 17
Section 5.01. When Company May Merge, etc....................................................... 17
---------------------------
ARTICLE SIX............................................................................................. 18
Defaults and Remedies................................................................................... 18
Section 6.01. Events of Default................................................................. 18
-----------------
Section 6.02. Acceleration...................................................................... 20
------------
Section 6.03. Other Remedies.................................................................... 20
--------------
Section 6.04. Waiver of Existing Defaults....................................................... 21
---------------------------
Section 6.05. Control by Majority............................................................... 21
-------------------
Section 6.06. Limitation on Suits............................................................... 21
-------------------
Section 6.07. Rights of Holders to Receive Payment.............................................. 22
------------------------------------
Section 6.08. Collection Suit by Trustee........................................................ 22
--------------------------
Section 6.09. Trustee May File Proofs of Claim.................................................. 22
--------------------------------
Section 6.10. Priorities........................................................................ 22
----------
Section 6.11. Undertaking for Costs............................................................. 23
---------------------
ARTICLE SEVEN........................................................................................... 23
Trustee................................................................................................. 23
Section 7.01. Duties of Trustee................................................................. 23
-----------------
Section 7.02. Rights of Trustee................................................................. 24
-----------------
Section 7.03. Individual Rights of Trustee...................................................... 25
----------------------------
Section 7.04. Trustee's Disclaimer.............................................................. 25
--------------------
Section 7.05. Notice of Defaults................................................................ 26
------------------
Section 7.06. Reports by Trustee to Holders..................................................... 26
-----------------------------
Section 7.07. Compensation and Indemnity........................................................ 26
--------------------------
Section 7.08. Replacement of Trustee............................................................ 27
----------------------
Section 7.09. Successor Trustee by Merger, etc.................................................. 27
--------------------------------
Section 7.10. Eligibility; Disqualification..................................................... 28
-----------------------------
Section 7.11. Preferential Collection of Claims Against Company................................. 28
-------------------------------------------------
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE EIGHT...............................................................................28
Discharge of Indenture......................................................................28
Section 8.01. Defeasance Upon Deposit of Moneys or U.S. Government Obligations..28
----------------------------------------------------------------
Section 8.02. Survival of the Company's Obligations.............................31
-------------------------------------
Section 8.03. Application of Trust Money........................................31
--------------------------
Section 8.04. Repayment to the Company..........................................32
------------------------
Section 8.05. Reinstatement.....................................................32
-------------
ARTICLE NINE................................................................................32
Amendments, Supplements and Waivers.........................................................32
Section 9.01. Without Consent of Holders........................................32
--------------------------
Section 9.02. With Consent of Holders...........................................33
-----------------------
Section 9.03. Compliance with Trust Indenture Act...............................34
-----------------------------------
Section 9.04. Revocation and Effect of Consents.................................34
---------------------------------
Section 9.05. Notation on or Exchange of Securities.............................35
-------------------------------------
Section 9.06. Trustee to Sign Amendments, etc...................................35
-------------------------------
ARTICLE TEN.................................................................................35
Miscellaneous...............................................................................35
Section 10.01. Trust Indenture Act Controls......................................35
----------------------------
Section 10.02. Notices...........................................................35
-------
Section 10.03. Communications by Holders with Other Holders......................36
--------------------------------------------
Section 10.04. Certificate and Opinion as to Conditions Precedent................36
--------------------------------------------------
Section 10.05. Statements Required in Certificate or Opinion.....................37
---------------------------------------------
Section 10.06. Rules by Trustee and Agents.......................................37
---------------------------
Section 10.07. Legal Holidays....................................................37
--------------
Section 10.08. Governing Law.....................................................38
-------------
Section 10.09. No Adverse Interpretation of Other Agreements.....................38
---------------------------------------------
Section 10.10. No Recourse Against Others........................................38
--------------------------
Section 10.11. Successors and Assigns............................................38
----------------------
Section 10.12. Duplicate Originals...............................................38
-------------------
Section 10.13. Severability......................................................38
------------
ARTICLE ELEVEN..............................................................................38
Subordination...............................................................................38
Section 11.01. Agreement to Subordinate..........................................38
------------------------
Section 11.02. Certain Definitions...............................................39
-------------------
Section 11.03. Liquidation; Dissolution; Bankruptcy..............................39
------------------------------------
Section 11.04. Default on Senior Indebtedness....................................39
------------------------------
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
Section 11.05. Acceleration of Securities........................................40
--------------------------
Section 11.06. When Distributions Must Be Paid Over..............................40
------------------------------------
Section 11.07. Notice by the Company.............................................40
---------------------
Section 11.08. Subrogation.......................................................41
-----------
Section 11.09. Relative Rights...................................................41
---------------
Section 11.10. Subordination May Not Be Impaired by the Company..................41
------------------------------------------------
Section 11.11. Distribution or Notice to the Representative......................41
--------------------------------------------
Section 11.12. Rights of the Trustee and Paying Agent............................41
--------------------------------------
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness...............42
---------------------------------------------------
EXHIBIT A .........................................................................A-1
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
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; 10.02
311(a)........................................................7.11
(b)...........................................................7.11
(c)...........................................................N.A.
312(a).......................................................2.0.5
(b)..........................................................10.03
(c)..........................................................10.03
313(a)........................................................7.06
(b)(1)........................................................N.A.
(b)(2)........................................................7.06
(c)..........................................................10.02
(d)...........................................................7.06
314(a).................................................7.06; 10.02
(b)...........................................................N.A.
(c)(1).......................................................10.04
(c)(2).......................................................10.04
(c)(3)........................................................N.A.
(d)...........................................................N.A.
(e)..........................................................10.05
(f)...........................................................N.A.
315(a).....................................................7.01(b)
(b)....................................................7.05; 10.02
(c)........................................................7.01(a)
(d)........................................................7.01(c)
(e)...........................................................6.11
316(a)(last sentence).........................................2.12
(a)(1)(A).....................................................6.05
(a)(1)(B).....................................................6.04
(a)(2)........................................................N.A.
(b)...........................................................6.07
(c)...........................................................9.04
317(a)(1).....................................................6.08
(a)(2)........................................................6.09
v
<PAGE>
(b)..............................................................2.04
318(a)..........................................................10.01
N.A. means Not Applicable.
vi
<PAGE>
INDENTURE dated as of ________________, ____, by and among KEY PRODUCTION
COMPANY, INC., a Delaware corporation (the "Company"), and ________________,
(the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's debt securities issued
under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
-----------
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended, or
any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other
<PAGE>
equity interests, whether now outstanding or issued after the applicable Issue
Date, including, without limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or the
passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any liability
of such Person (other than accounts payable, other trade payables and accrued
expenses incurred in the ordinary course of such Person's business) (a) for
borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent purchase price which, as of the date of incurrence thereof is
not required to be recorded as a liability in accordance with GAAP), or (c) in
respect of Capitalized Lease Obligations (to the extent of the Attributable Debt
in respect thereof), (ii) any Indebtedness of others that such Person has
guaranteed to the extent of the guarantee, (iii) to the extent not otherwise
included, the obligations of such Person under Currency Agreements or Interest
Protection Agreements to the extent recorded as liabilities not constituting
Interest Incurred, net of amounts recorded as assets in respect of such
agreements, in accordance with GAAP, and (iv) all Indebtedness of others
2
<PAGE>
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person. The amount of Indebtedness of any Person at any date
shall be (a) the outstanding balance at such date of all unconditional
obligations as described above, net of any unamortized discount to be accounted
for as Interest Expense, in accordance with GAAP, (b) the maximum liability of
such Person for any contingent obligations under clause (ii) above at such date,
net of, any unamortized discount to be accounted for as Interest Expense in
accordance with GAAP and (c) in the case of clause (iv) above, the lesser of (1)
the fair market value of any asset subject to a Lien securing the Indebtedness
of others on the date that the Lien attaches and (2) the amount of the
Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time to
time, including pursuant to any Authorizing Resolution or supplemental indenture
pertaining to any Series.
"Interest Expense" of any Person for any period means, without duplication,
the aggregate amount of (i) interest which, in conformity with GAAP, would be
set opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owned with respect to letters of credit and bankers' acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses; with respect to the Company and its Restricted Subsidiaries,
but excluding its Unrestricted Subsidiaries, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate swap
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates with respect to Indebtedness
permitted to be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
3
<PAGE>
"Issue Date" means, with respect to any Series of Securities, the date on
which the Securities of such Series are originally issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
4
<PAGE>
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is not an
Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor agency
performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which would
constitute a "significant subsidiary" as defined in Rule 1.02 of Regulation S-X
under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor
serving hereunder.
"Trust Officer" means the Chairman of the Board, the President, any Vice
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary
5
<PAGE>
receipt from any amount received by the custodian in respect of the U.S.
government obligation or the specific payment of interest on or principal of the
U.S. government obligation evidenced by such depositary receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so designated
by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Agent Members"..................... 2.15
"Business Day"...................... 10.07
"Custodian"......................... 6.01
"Depositary"........................ 2.15
"Event of Default".................. 6.01
"Legal Holiday"..................... 10.07
"Paying Agent"...................... 2.03
"Registrar"......................... 2.03
Senior Indebtedness"................ 11.02
"Representative".................... 11.02
Section 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Securityholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
6
<PAGE>
Section 1.04. 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) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
---------------
The aggregate principal amount of Securities that may be issued under this
Indenture is unlimited. The Securities may be issued from time to time in one
or more Series. Each Series shall be created by an Authorizing Resolution or a
supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a Series
are to be issued at a discount from their face amount, the method
of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
7
<PAGE>
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form and
the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security
and the terms of any such global Security;
(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the manner
for determining such payments;
(14) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in addition
to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall be
in the form of Exhibit A;
(18) any terms that may be required by or advisable under applicable
law;
(19) the percentage of the principal amount of the Securities which is
payable if the maturity of the Securities is accelerated in the
case of Securities issued at a discount from their face amount;
and
(20) any other terms in addition to or different from those contained
in this Indenture.
All Securities of one Series 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 pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication.
----------------------------
8
<PAGE>
Two Officers shall sign, or one Officer shall sign and one Officer shall
attest to, the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
A Security shall not be valid until 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 shall authenticate Securities for original issue upon receipt
of an Officers' Certificate of the Company. Each Security shall be dated the
date of its authentication.
Section 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. 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. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify the
Trustee in writing of the name and address of any such Agent and the Trustee
shall have the right to inspect the Securities register at all reasonable times
to obtain copies thereof, and the Trustee shall have the right to rely upon such
register as to the names and addresses of the Holders and the principal amounts
and certificate numbers thereof. If the Company fails to maintain a Registrar or
Paying Agent or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of
Securityholders and 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 and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so the Paying
Agent shall have no further liability for the money.
9
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Section 2.05. Securityholder Lists.
--------------------
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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual 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 Securityholders.
Section 2.06. Transfer and Exchange.
---------------------
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
----------------------
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
Trustee to protect the Company, the Trustee or any Agent from any loss
which any of them may suffer if a Security is replaced, including the
acquisition of such Security by a bona
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fide purchaser. The Company or the Trustee may charge the Holder for expenses in
replacing a Security.
Section 2.08. Outstanding Securities.
----------------------
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it and those described in this Section. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
cancellation. Unless the Authorizing Resolution so provides, the Company may
not issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
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Section 2.11. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful
manner if, after notice given by the Company to the Trustee of the proposed
payment, such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
-------------
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each interest payment date and
maturity date with respect to each Series of Securities, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments due on such interest payment date or maturity date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such interest payment date or maturity date, as the case may
be.
Section 2.15. Book-Entry Provisions for Global Security.
-----------------------------------------
(a) Any global Security of a Series initially shall (i) be registered in
the name of the depository who shall be identified in the Authorizing Resolution
or supplemental indenture
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relating to such Securities (the "Depository") or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian for such Depository
and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the global Security, an equal aggregate principal amount of definitive
Securities of authorized denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
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ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
------------------
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
--------------------------------------
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than the minimum
denomination for the Series. Securities and portions of them it selects shall be
in amounts equal to the minimum denomination for the Series or an integral
multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
Section 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
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(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to accrue on
and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the mandatory
redemption or the optional redemption provisions, as applicable.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall deliver to the Trustee at least 15 days prior to the date on which notice
of redemption is to be mailed or such shorter period as may be satisfactory to
the Trustee, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
Section 3.05. Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the Paying
Agent immediately available funds sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for each Holder a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
15
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ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
---------------------
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An
installment of principal or interest shall be considered paid on the date it is
due, if on that date the Paying Agent holds money designated for and sufficient
to pay the installment; provided, however, that money held by the Paying Agent
for the benefit of holders of Senior Indebtedness pursuant to the provisions of
Article 11 hereof shall not be considered paid within the meaning of this
Section 4.01.
The Company shall pay interest on overdue principal at the rate borne by
the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior 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 address of the
Trustee.
Section 4.03. 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 whether or not
the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence; Maintenance
-----------------------------------------------------------------
of Properties.
-------------
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments and
governmental charges or levies imposed upon the Company and its
Restricted Subsidiaries or upon the income or profits of the
Company and its Restricted Subsidiaries or upon property or any
part thereof belonging to the Company and its Restricted
Subsidiaries before the same shall be in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid,
might become a lien or charge upon such property or any part
thereof; provided, however, that the Company shall not be required
to cause to be paid or discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and
the nonpayment thereof does not, in the judgment of the Company,
materially adversely affect the ability of the Company and the
Restricted Subsidiaries to pay all obligations under this
Indenture when due; and provided further, that the Company shall
not be required to cause to be paid or discharged any such tax,
assessment,
16
<PAGE>
charge, levy or claim if, in the judgment of the Company, such
payment shall not be advantageous to the Company in the conduct of
its business and if the failure so to pay or discharge does not,
in its judgment, materially adversely affect the ability of the
Company and the Restricted Subsidiaries to pay all obligations
under this Indenture when due;
(b) cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence of the Company and each
of its Restricted Subsidiaries; provided, however, that nothing in
this subsection (b) shall prevent a consolidation or merger of the
Company or any Restricted Subsidiary not prohibited by the
provisions of Article Five or any other provision or the
Authorizing Resolution or supplemental indenture pertaining to a
Series, and the Company need not maintain the corporate existence
of an immaterial Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair, working
order and condition (reasonable wear and tear excepted) and from
time to time make all needful and proper repairs, renewals,
replacements, betterments and improvements thereto, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that
nothing in this subsection (c) shall prevent the Company from
discontinuing the operation and maintenance of any such properties
if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business and not disadvantageous
in any material respect to the ability of the Company and the
Restricted Subsidiaries to pay all obligations under this
Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
---------------------------
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the
17
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Securities and this Indenture and (2) immediately after giving effect to, and as
a result of, such transaction, no Default or Event of Default shall have
occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
-----------------
An "Event of Default" on a Series occurs if, voluntarily or involuntarily,
whether by operation of law or otherwise, any of the following occurs:
(1) the failure by the Company to pay interest on any Security of such
Series when the same becomes due and payable and the continuance
of any such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at
maturity, upon acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply
in all material respects with any of its agreements or covenants
in, or provisions of, the Securities of such Series, or this
Indenture (as they relate thereto) and such failure continues for
the period and after the notice specified below (except in the
case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five), which will constitute
an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an
amount of $30 million or more, individually or in the aggregate,
and such acceleration does not cease to exist, or such
Indebtedness is not satisfied, in either case within 30 days after
such acceleration;
18
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(5) the failure by the Company or any Restricted Subsidiary to make
any principal or interest payment in an amount of $30 million or
more, individually or in the aggregate, in respect of Indebtedness
for borrowed money (other than Non-Recourse Indebtedness) of the
Company or any Restricted Subsidiary within 30 days of such
principal or interest becoming due and payable (after giving
effect to any applicable grace period set forth in the documents
governing such Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or more,
individually or in the aggregate, for the payment of money having
been entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries and such
judgment or judgments is not covered by a policy of insurance,
satisfied, stayed, annulled or rescinded within 90 days of being
entered;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor in an
involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a Custodian
for all or substantially all of the property of the Company
or any Restricted Subsidiary that is a Significant
Subsidiary, or
(C) orders the liquidation of the Company or any Restricted
Subsidiary that is a Significant Subsidiary, and the order or
decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25
percent in principal amount
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<PAGE>
of the then outstanding Securities of the applicable Series notify the Company
and the Trustee, of the Default and (except in the case of a default with
respect to Article Five (or any replacement provisions as contemplated by
Article Five)) the Company does not cure the Default within 90 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." If such a Default
is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default with respect to the
Company resulting from sub-clauses (7) or (8) above), shall have occurred and be
continuing under the Indenture, the Trustee by notice to the Company, or the
Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event of
Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
--------------
If an Event of Default on a Series occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Series or to enforce the performance
of any provision in the Securities or this Indenture applicable to the Series.
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 Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not
20
<PAGE>
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 Existing Defaults.
---------------------------
Subject to Section 9.02, the Holders of a majority in principal amount of
the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is cured and stops continuing,
and any Event of Default arising therefrom shall be deemed to have been cured;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.05. Control by Majority.
-------------------
The Holders of a majority in principal amount of the outstanding Securities
of a Series may 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 it with respect to such Series. The Trustee, however, may refuse
to follow any direction (i) that conflicts with law or this Indenture, (ii)
that, subject to Section 7.01, the Trustee determines is unduly prejudicial to
the rights of other Securityholders, or (iii) that would involve the Trustee in
personal liability.
Section 6.06. Limitation on Suits.
-------------------
A Securityholder of a Series may not pursue any remedy with respect to this
Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 90 days after
receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request shall
have been given to the Trustee pursuant to this Section 6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
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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 Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) 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 of principal and interest remaining unpaid.
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
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Fourth: to the Company as its interests may appear.
22
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
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 the 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, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a
majority in principal amount of the Securities, exercise its
rights and powers and use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this
Indenture against the Trustee.
(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 his Indenture. The Trustee,
however, shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture but need not confirm or investigate the
accuracy of mathematical calculations or other facts or
matters stated herein.
(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:
23
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(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(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.
(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 or any
other direction of the Holders permitted hereunder.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held
in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) None of the provisions contained in 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 or in
the exercise of any of its rights or powers, if there shall be
reasonable grounds for believing that the repayment of such funds
or adequate indemnity against such liability is not reasonably
assured to it.
Section 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting on any document, resolution, certificate,
instrument, report, or direction 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,
resolution, certificate, instrument, report, or direction.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which
shall conform to Sections 10.04 and 10.05 hereof and containing
such other statements as the Trustee reasonably deems necessary to
perform its duties hereunder. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on
the Officers' Certificate, Opinion of Counsel or any other
direction of the Company permitted hereunder.
24
<PAGE>
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Indenture.
(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall
be full and complete authorization and protection in respect of
any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such
counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other
than under Section 6.01(1) or 6.01(2)) unless a Trust Officer
assigned to and working in the Trustee's corporate trust office
has actual knowledge thereof or unless written notice of any Event
of Default is received by the Trustee at its address specified in
Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
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 Agent may do the
same with like rights. The Trustee, however, must comply with Sections 7.10 and
7.11.
Section 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture, the Securities or of any prospectus used to sell the Securities; it
shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
25
<PAGE>
Section 7.05. Notice of Defaults.
------------------
If a Default on a Series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder of the Series notice of
the Default (which shall specify any uncured Default known to it) within 90 days
after it occurs. Except in the case of a default in payment of principal of or
interest on a Series, the Trustee may withhold the notice if and so long as the
board of directors of the Trustee, the executive or any trust committee of such
directors and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interests of Holders of the Series.
Section 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee or predecessor trustee from time to
time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the Trustee
shall have a claim prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 6.01 or in connection with Article 6
hereof, the expenses (including
26
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the reasonable fees and expenses of its counsel) and the compensation for
services in connection therewith are to constitute expenses of administration
under any bankruptcy law.
Section 7.08. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, 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. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges with or into or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor trustee.
27
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Section 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss.310(a)(1). The Trustee shall have a combined capital and surplus of
at least $10,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance Upon Deposit of Moneys or U.S. Government Obligations.
----------------------------------------------------------------
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the
outstanding Securities of any Series upon compliance with the
applicable conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to
have been released and discharged from its respective obligations
with respect to the outstanding Securities of a Series on the date
the applicable conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding
Securities of a Series, which shall thereafter be deemed to be
"outstanding" only for the purposes of the Sections and matters
under this Indenture referred to in (i) and (ii) below, and to
have satisfied all its other obligations under such Securities and
this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated
or discharged hereunder: (i) the rights of Holders of outstanding
Securities of a Series to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in
such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
obligations listed in Section 8.02, subject to compliance with
this Section 8.01. The Company may exercise its option under this
paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to such Securities.
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<PAGE>
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released
and discharged from the obligations under any covenant contained
in Article Five and any other covenant contained in the
Authorizing Resolution or supplemental indenture relating to such
Series to the extent provided for therein, on and after the date
the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities of such Series shall
thereafter be deemed to be not "outstanding" for the purpose of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all
other purposes hereunder. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Securities
of a Series, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under
Section 6.01(3), but, except as specified above, the remainder of
this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities
of the applicable Series:
(1) The Company shall have irrevocably deposited in trust with
the Trustee, pursuant to an irrevocable trust and security
agreement in form and substance reasonably satisfactory to
the Trustee, money in U.S. dollars or U.S. government
obligations or a combination thereof in such amounts and at
such times as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of and interest on the outstanding Securities of
such Series to maturity or redemption; provided, however,
that the Trustee (or other qualifying trustee) shall have
received an irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee) to
apply such money or the proceeds of such U.S. government
obligations to said payments with respect to the Securities
of such Series to maturity or redemption;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute a
default under, any other material instrument or agreement to
which the Company or any of its Subsidiaries is a party or by
which it or any of their property is bound;
29
<PAGE>
(4) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in
the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that (A) the
Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the Issue
Date pertaining to such Series, 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
state that, or (ii) in the event the Company elects paragraph
(c) hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to the
effect that, in the case of clauses (i) and (ii), Holders of
the Securities of such Series will not recognize income, gain
or loss for United States federal income tax purposes as a
result of such deposit and the defeasance contemplated hereby
and will be subject to federal income tax in the same amounts
and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not
occurred;
(5) The Company shall have delivered to the Trustee an Officers'
Certificate, stating that the deposit under clause (1) was
not made by the Company with the intent of preferring the
Holders of the Securities of such Series over any other
creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the
Company or others;
(6) The Company shall have delivered to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, to the
effect that, (A) the trust funds will not be subject to the
rights of Holders of Indebtedness of the Company other than
the Securities of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of
Securities of such Series is an insider of the Company, after
the 91st day following the deposit, the trust funds will not
be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights
generally; and
(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the
defeasance contemplated by this Section 8.01 have been
complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
30
<PAGE>
(e) In addition to the Company's rights above under this Section 8.01,
the Company may terminate all of its obligations under this
Indenture with respect to a Series when:
(1) All Securities of such Series theretofore authenticated and
delivered (other than Securities which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 2.07 and Securities for whose payment
money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been delivered to
the Trustee for cancellation or all such Securities not
theretofore delivered to the Trustee for cancellation have
become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee as trust
funds in trust solely for that purpose an amount of money
sufficient to pay and discharge the entire Indebtedness on
the Securities not theretofore delivered to the Trustee for
cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of
the Securities at maturity or redemption, as the case may be;
and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that all
conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been
complied with.
Section 8.02. Survival of the Company's Obligations.
-------------------------------------
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
31
<PAGE>
Section 8.04. Repayment to the Company.
------------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
-------------
If the Trustee is unable to apply any money or U.S. government obligations
in accordance with Section 8.01 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 relating to the Series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee is permitted to apply all such money or U.S. government
obligations in accordance with Section 8.01; provided, however, that (a) if the
Company has made any payment of interest on or principal of any Securities of
the Series because of the reinstatement of their 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 and
(b) unless otherwise required by any legal proceeding or any order or judgment
of any court or governmental authority, the Trustee shall return all such money
or U.S. government obligations to the Company promptly after receiving a written
request therefor at any time, if such reinstatement of the Company's obligations
has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
32
<PAGE>
(3) to provide that specific provisions of this Indenture shall not
apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the rights
of Securityholders.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
-----------------------
The Company and the Trustee may amend or supplement this Indenture or the
Securities of a Series without notice to any Securityholder of such Series but
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series
affected, however, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related definitions)
with respect to redemption of Securities pursuant to Article Three
hereof or with respect to any obligations on the part of the
Company to offer to purchase or to redeem Securities of a Series
pursuant to the Authorizing Resolution or supplemental indenture
pertaining to such Series;
(4) modify the ranking or priority of the Securities of any Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment of
the principal of or interest on any Security; or
33
<PAGE>
(7) make any Security payable at a place or in money other than that
stated in the Security, or impair the right of any Securityholder
to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or more
Series does not affect the interests of Securityholders of any other Series.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed supplement, but it shall be
sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section or
under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
Section 9.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
---------------------------------
A consent to an amendment, supplement or waiver by a Holder shall bind the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. Subject to the following paragraph, any
such Holder or subsequent Holder, however, may revoke the consent as to his
Security or portion of a Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(7) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security; provided, that any such waiver shall not
34
<PAGE>
impair or affect the right of any Holder to receive payment of principal of and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security, the
Company may require the Holder of the Security to deliver it to the Trustee, at
which time the Trustee shall place an appropriate notation on the Security about
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.
Section 9.06. Trustee to Sign Amendments, etc.
-------------------------------
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver 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 or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. 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 TIA,
the required provision shall control.
Section 10.02. Notices.
-------
Any order, consent, notice or communication shall be sufficiently given if
in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
35
<PAGE>
if to the Company:
KEY PRODUCTION COMPANY, INC.
717 Seventeenth Street, Suite 3300
Denver, CO 80202-3404
Telecopy No.: (303) 295-3494
Attention: Chief Financial Officer
if to the Trustee:
____________________________
____________________________
____________________________
____________________________
Telecopy No.: ________________
Attention: ___________________
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 mailed to a Securityholder shall be mailed to
him by first class mail at his address as it appears on the registration books
of the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.
If the Company mails notice or communications to the Securityholders, it
shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders 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 ss. 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
36
<PAGE>
(1) an Officers' Certificate (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions precedent and covenants, compliance
with which constitutes a condition precedent, if any, provided
for in this Indenture relating to the proposed action or
inaction, have been complied with and that any such section does
not conflict with the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, 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
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. A
"Business Day" is any day other than a Legal Holiday.
37
<PAGE>
Section 10.08. Governing Law.
-------------
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
--------------------------
All liability described in paragraph 12 of the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
Section 10.11. Successors and Assigns.
----------------------
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate 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.
Section 10.13. Severability.
------------
In case any one or more of the provisions contained in this Indenture or in
the Securities of a Series shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate.
------------------------
The Company agrees, and each Securityholder by accepting a Security agrees,
that the indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full of all Senior Indebtedness and that the subordination is for the
benefit of the holders of Senior Indebtedness.
38
<PAGE>
Section 11.02. Certain Definitions.
-------------------
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future) created,
incurred, assumed or guaranteed by the Company (and all renewals, extensions or
refundings thereof), unless the instrument under which such Indebtedness is
created, incurred, assumed or guaranteed provides that such Indebtedness is not
senior or superior in right of payment to the Securities. Notwithstanding
anything to the contrary in the foregoing, Senior Indebtedness shall not include
(i) any Indebtedness of the Company to any of its subsidiaries, (ii) any trade
payables of the Company or (iii) guarantees by the Company or any of its
Subsidiaries of Indebtedness (a) outstanding at the date hereof or (b) which may
be outstanding in the future, except that Senior Indebtedness shall include any
guarantees as may be listed in a supplemental indenture and any other present
and future guarantees that provide by their terms that they constitute Senior
Indebtedness.
Section 11.03. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any such
proceeding) to the date of payment on the Senior Indebtedness
before Securityholders shall be entitled to receive any payment
of principal of or interest on Securities; and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but for
this Article shall be made to holders of Senior Indebtedness as
their interests may appear, except that Securityholders may
receive securities that are subordinated to Senior Indebtedness
to at least the same extent as the Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness.
------------------------------
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior Indebtedness, before any payment is made by the
Company or any person acting on behalf of the Company on account of the
principal or interest of the Securities.
39
<PAGE>
The Company may not pay principal of or interest on the Securities and may
not acquire any Securities for cash or property (other than capital stock of the
Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire them,
if this Article otherwise permits the payment or acquisition at that time, when
the default is cured or waived.
Section 11.05. Acceleration of Securities.
--------------------------
If payment of the Securities is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
Section 11.06. When Distributions Must Be Paid Over.
------------------------------------
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this Article
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 11.07. Notice by the Company.
---------------------
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
40
<PAGE>
Section 11.08. Subrogation.
-----------
After all Senior Indebtedness is paid in full and until the Securities are
paid in full, Securityholders 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 the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights.
---------------
This Article defines the relative rights of Securityholders and holders of
Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as between
the Company and Securityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Securities
in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors of
the Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on the
due date because of this Article, the failure is still a Default or Event of
Default.
Section 11.10. 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 Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Section 11.11. Distribution or Notice to the Representative.
--------------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent.
--------------------------------------
Notwithstanding any provision of this Article 11 or any other provision of
this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent
41
<PAGE>
unless and until the Trustee or such Paying Agent, as the case may be, shall
have received at its office specified in Section 10.02 written notice thereof
from the Company, a Representative or a holder of Senior Indebtedness and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.01 and 7.02, and such Paying Agent, shall be entitled
in all respects conclusively to assume that no such facts exist. The Trustee or
Paying Agent may continue to make payments on the Securities unless it receives
such a notice at least three business days prior to the date upon which payment
is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, Custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness.
---------------------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee
nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior
42
<PAGE>
Indebtedness and, subject to the provisions of Section 7.02, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall, in the
absence of bad faith, pay over or deliver to holders of Securities, the Company
or any other person monies or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated:____________________, ____ KEY PRODUCTION COMPANY, INC.
_______________________________
By:____________________________
Name:__________________________
Title:_________________________
Dated: ____________________, _____ __________________________, as
Trustee
_______________________________
By:____________________________
Name:__________________________
Title:_________________________
(SEAL)
EXHIBIT A
No._________________ CUSIP No.________________:
_________________________________[Title of Security]
KEY PRODUCTION COMPANY, INC., a Delaware corporation promises to pay to
______________ or registered assigns the principal sum of
_________________________[Dollars] on ____________________
______________________________________[Title of Security] Interest Payment
Dates:________________________ and ________________________ Record Dates
_____________________________ and _____________________________.
Authenticated: _______________________
Dated: __________________________
A-1
<PAGE>
KEY PRODUCTION COMPANY, INC.
By: ________________________
Title: _______________________
By: ________________________
Title: _______________________
____________________________
as Trustee, certifies that
this is one of the Securities
referred to in the within
mentioned Indenture.
By: ________________________
Title: _______________________
Authorized Signatory
KEY PRODUCTION COMPANY, INC.
____________________________
[Title of Security]
A-2
<PAGE>
1. Interest.
KEY PRODUCTION COMPANY, INC. (the "Company"), a Delaware corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on
_______________________and ___________of each year until the principal is paid
or made available _________________________ for payment. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid, from _________________,
19__; provided that, if there is no existing default _________________________
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
[Provisions as to the right of the Company to defer interest, if any, may be set
forth here. ]
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest, if any, which will be paid on such special payment
date to Holders of record on such special record date as may be fixed by the
Company) to the persons who are registered Holders of Securities at the close of
business on the [Insert record dates]. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent and Registrar.
Initially, ______________________ (the "Trustee") will act as Paying Agent
and _______________________ Registrar. The Company may change or appoint any
Paying Agent, Registrar or co-Registrar without notice. The Company or any of
its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
_______________, ____ ("Indenture") among the Company and the Trustee. The
terms __________________ of the Securities include those stated in the Indenture
(including those terms set forth in the Authorizing Resolution or supplemental
indenture pertaining to the Securities of the Series of which this Security is a
part) and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 ("TIA") as in effect on the date of the Indenture. The Securities
are subject to all such terms, and Securityholders are referred to the Indenture
and the Act for a statement of them.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental indenture. Requests may be made to: Key Production Company,
Inc., 717 Seventeenth St., Suite 3300, Denver, Colorado 80202-3404, Attention:
Secretary.
A-3
<PAGE>
5. Optional Redemption.
The Company may redeem the Securities at any time on or after
______________, in whole or in part, at the following redemption prices
__________________________ (expressed as a percentage of their principal amount)
together with interest accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing on
_____________and ending on ______________________in each of the
____________________________ following years Percentage
____________________________________________________________.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue
on Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Security selected
for redemption, except the unredeemed part thereof if the Security is redeemed
in part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of it
for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.
A-4
<PAGE>
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor corporation will be
released from those obligations.
11. Trustee Dealings With Company.
____________________________, the Trustee under the Indenture, in its
individual or _________________________ any other capacity, may make loans
to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance, which
provisions shall for all purposes have the same effect as if set forth herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Security.
A-5
<PAGE>
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as: TEN COM ( tenants in common), TENANT (tenants by the
entireties), JT TEN (joint tenants with right of survivorship and not as tenants
in common), CUST (custodian), and U/G/M/A (Uniform Gifts to Minors Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities are
subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior
Indebtedness does not include Indebtedness of the Company to any of its
subsidiaries, trade payables of the Company and certain Indebtedness of others
guaranteed by the Company. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination and authorizes the Trustee to give it effect.
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below:
I or we assign and transfer this Security to:______________________________
(Insert assignee's social
security or tax ID number)
______________________________
______________________________
______________________________
(Print or type assignee's
name, address, and zip code)
and irrevocably appoint: _________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:_______________________ ______________________________
Your signature:
(Sign exactly as your name
appears on the other side of
this Security)
Guarantee: ____________________________
A-6
<PAGE>
[LETTERHEAD OF HOLME ROBERTS & OWEN LLP.]
EXHIBIT 5.1
July 27, 1999
- -------
Key Production Company, Inc.
707 Seventeenth Street, Suite 3300
Denver, Colorado 80203
Re: Key Production Company, Inc. Form S-3 Registration Statement
Ladies and Gentlemen:
As counsel for Key Production Company, Inc., a Delaware corporation
(the"Company"), we are familiar with Key's Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933 (as amended, the "Act"), File No.
_________, with respect to the offering and issuance from time to time by Key of
up to $150,000,000 aggregate offering price of the following: (i) one or more
series of its debt securities (the "Debt Securities"), (ii) shares of its
Preferred Stock (the "Preferred Stock"), or (iii) shares of its Common Stock,
par value $.25 per share (the "Common Stock").
All capitalized terms which are not defined herein shall have the meanings
assigned to them in the Registration Statement.
In connection with our examination of documents as hereinafter described,
we have assumed the genuineness of all signatures on, and the authenticity of,
all documents submitted to us as originals and the conformity to original
documents of all documents submitted to us as copies. With respect to agreements
and instruments executed by natural persons, we have assumed the legal
competency of such persons.
For the purpose of rendering this opinion, we have made such factual and
legal examination as we deemed necessary under the circumstances, and in that
connection we have examined, among other things, originals or copies of the
following:
(1) The Certificate of Incorporation of Key, as amended to date;
(2) The Bylaws of Key, as amended to date;
(3) The Form of Senior Indenture (and form of notes) filed as an exhibit to
the Registration Statement;
(4) The Form of Senior Subordinated Indenture (and form of notes) filed as
an exhibit to the Registration Statement;
(5) The Form of Junior Subordinated Indenture (and form of notes) filed as
an exhibit to the Registration Statement;
(6) Such records of the corporate proceedings of Key, and such other
documents that we considered necessary or appropriate for the purpose
of rendering this opinion; and
(7) Such other certificates and assurances from public officials, officers
and representatives of Key that we considered necessary or appropriate
for the purpose of rendering this opinion.
<PAGE>
On the basis of the foregoing examination, and in reliance thereon, we are
of the opinion that (subject to compliance with the pertinent provisions of the
Act and, with respect to the Indentures (as defined below) and the Debt
Securities, the Trust Indenture Act of 1939, as amended, and to compliance with
such securities or "blue sky" laws of any jurisdiction as may be applicable):
1. When (a) the Debt Securities in substantially the form contained in (as
appropriate) the Form of Senior Indenture, the Form of Senior Subordinated
Indenture or the Form of Junior Subordinated Indenture (as amended or
supplemented in accordance with the respective terms thereof, each an
"Indenture") shall have been authorized, executed and authenticated in
accordance with the terms of the applicable Indenture, (b) the Indentures shall
have been qualified under the Trust Indenture Act of 1939, duly executed and
delivered and (c) the Debt Securities shall have been issued and sold as
described in the Registration Statement, and if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, and in a manner contemplated in the Registration Statement, including
the Prospectus Supplement relating to any such Debt Securities, the Debt
Securities will be duly authorized and valid and binding obligations of Key,
subject to the effect of any bankruptcy, insolvency, reorganization, moratorium,
arrangement, or similar laws affecting the enforcement of creditors' rights
generally (including, without limitation, the effect of statutory or other laws
regarding fraudulent transfers or preferential transfers) and general principles
of equity, regardless of whether enforceability is considered in a proceeding in
equity or at law.
2. When the Preferred Stock shall have been authorized, issued and sold as
described in the Registration Statement, and if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, and in a manner contemplated in the Registration Statement, including
the Prospectus Supplement relating to the applicable series of such Preferred
Stock, the Preferred Stock will be validly issued, fully paid and nonassessable.
3. When the Common Stock shall have been authorized, issued and sold as
described in the Registration Statement, and if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, and in a manner contemplated in the Registration Statement, including
the Prospectus Supplement relating to the applicable offering of such Common
Stock, the Common Stock will be validly issued, fully paid and nonassessable.
This opinion is limited to the present corporate laws of the State of
Delaware, the present laws of the States of Colorado and New York and the
present federal laws of the United States and to the present judicial
interpretations thereof and to the facts as they presently exist. We undertake
no obligation to advise you as a result of developments occurring after the date
hereof or as a result of facts or circumstances brought to our attention after
the date hereof.
This opinion may be filed as an exhibit to the Registration Statement.
Consent is also given to the reference to this firm under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
this consent, we do not admit we are included in the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the SEC promulgated thereunder.
Very truly yours,
/s/ HOLME ROBERTS & OWEN LLP
<PAGE>
Exhibit 12.1
Key Production Company, Inc.
Statement of Computation of Ratios of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Years Ended December 31,
Quarter Ended -------------------------------------------------------------------------
March 31,1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pretax income 943,698 7,412,044 15,638,684 12,870,953 3,771,061 4,747,282
Plus: Fixed charges excluding
capitalized interest 662,118 1,341,292 720,539 678,698 263,209 137,329
---------- ---------- ---------- ---------- ---------- ----------
1,605,816 8,753,336 16,359,223 13,549,651 4,034,270 4,884,611
========== ========== =========== ========== ========== ==========
Fixed Charges:
Interest expensed including 961,806 2,751,575 1,718,168 1,349,338 827,700 445,537
capitalized interest 3,106 12,006 14,836 11,825 9,109 936
Amortization of debt expense ----------- ---------- ---------- ---------- --------- ----------
964,912 2,763,581 1,733,004 1,361,163 836,809 446,473
=========== ========== ========== ========== ========= ==========
Ratio of earnings to fixed charges 1.66 3.17 9.44 9.95 4.82 10.94
==== ==== ==== ==== ==== =====
</TABLE>
<PAGE>
EXHIBIT 23.1
[ARTHUR ANDERSEN LLP LETTERHEAD]
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 24, 1999
included in Key Production Company, Inc.'s Form 10-K for the year ended December
31, 1998, and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Denver, Colorado
July 23, 1999
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<PAGE>
EXHIBIT 23.3
[RYDER SCOTT COMPANY, L.P. LETTERHEAD]
CONSENT OF RYDER SCOTT COMPANY, L.P.
As independent petroleum engineers, we hereby consent to the incorporation
by reference in this registration statement of our Firm's audit of the proved
oil and gas reserve quantities Key Production Company, Inc. as of January 1,
1999, and to all references to our Firm included in this registration statement.
/s/ RYDER SCOTT COMPANY, L.P.
-----------------------------
RYDER SCOTT COMPANY, L.P.
Denver, Colorado
July 23, 1999
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