As filed with the Securities and Exchange Commission on October 8, 1999
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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CHIEFTAIN INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Alberta, Canada 1311 None
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Classification Identification Number
Incorporation or Code Number
Organization)
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1201 TD Tower
10088-102 Avenue
Edmonton, Alberta T5J 2Z1
Canada
(780) 425-1950
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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John L. Roach, Inc.
4150 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
(214) 922-9850
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent for Service in the United States)
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Copies to:
Thomas R. Brome John S. Burns, Q.C.
Cravath, Swaine & Moore Bennett Jones
825 Eighth Avenue 4500 Bankers Hall East
New York, New York 10019 855-2nd Street S.W.
(212) 474-1000 Calgary, AB T2P 4K7
(403) 298-3100
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Approximate date of commencement
of proposed sale to the public: As soon
as practicable after the effective date
of this Registration Statement.
If any of the securities being registered on this form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed
Maximum Proposed
Amount to be Offering Maximum
Registered Price per Aggregate Amount of
Title of each class of securities to be Unit(1)(2)(3) Offering Registration
registered (1)(2)(3)(4) (4) Price(1)(2)(4)(5) Fee(6)
- ------------------------------------------------ ---------------------- -------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Common Shares..................................
Preferred Shares...............................
Debt Securities................................
Warrants.......................................
Common Shares and Related
Rights.........................................
Total: $300,000,000 100% $300,000,000 $83,400
================================================ ====================== ============== ==================== ==================
</TABLE>
(1) Such indeterminate number or amount of Common Shares, Preferred Shares,
Debt Securities and Warrants as may from time to time be issued at
indeterminable prices, but with an aggregate offering price not to exceed
$300,000,000. This registration statement also includes such
indeterminate number or amount of Debt Securities, Preferred Shares,
Common Shares and Warrants as may be issued from time to time upon
conversion or exchange of the securities being registered hereunder.
(2) Or, if any Debt Securities are issued at an original issue discount, the
amount to be registered shall include such greater amount as shall result
in an aggregate offering price of $300,000,000.
(3) Omitted pursuant to General Instruction II.D of Form S-3.
(4) Such indeterminate number of Rights to purchase additional Common Shares
as may be issued from time to time in connection with issuances of Common
Shares.
(5) Estimated solely for the purpose of calculating the registration fee. Any
offering of Debt Securities denominated in any foreign currency or
currency unit will be treated as the equivalent in U.S. dollars based on
the exchange rate applicable to the purchase of such Debt Securities from
the Registrant.
(6) Calculated pursuant to Rule 457 of the rules and regulations under the
Securities Act.
------------------------------------
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.
------------------------------------
<PAGE>
Subject to Completion, dated October 8, 1999
Preliminary Prospectus
The information contained in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.
$300,000,000
[LOGO]
Chieftain International, Inc.
Common Shares, Preferred Shares,
Debt Securities and Warrants
- ------------------------------------------------------------------------------
We will offer and sell from time to time Chieftain common shares, preferred
shares, debt securities, or warrants. We will provide specific terms of these
securities in supplements to this prospectus. The terms of the securities will
include the initial offering price, aggregate amount of the offering, listing
on any securities exchange or quotation system, risk factors and the agents,
dealers or underwriters, if any, to be used in connection with the sale of
these securities. You should read this prospectus and any supplement together
with any and all documents incorporated by reference herein and in any
supplement carefully before you invest.
Our common shares are listed on the American Stock Exchange and The Toronto
Stock Exchange under the symbol "CID."
Investing in our securities involves risks. See "Risk Factors" on page 6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is October , 1999
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You should rely only on the information we have included or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with additional or different information. If you receive any unauthorized
information, you must not rely on it. We are offering to sell the securities
only in jurisdictions where sales are permitted. You should not assume that
the information we have included in this prospectus is accurate as of any date
other than the date of this prospectus or that any information we have
incorporated by reference is accurate as of any date other than the date of
the document incorporated by reference.
Table of Contents
Page
About This Prospectus................................................ 3
Enforcement of Civil Liabilities..................................... 3
Where You Can Find More Information.................................. 3
Forward Looking Statements........................................... 4
Chieftain............................................................ 5
Risk Factors......................................................... 6
Ratios of Earnings to Fixed Charges.................................. 9
Use of Proceeds...................................................... 9
Description of Share Capital......................................... 10
Description of Debt Securities....................................... 15
Description of Warrants.............................................. 21
Plan of Distribution................................................. 24
Legal Matters........................................................ 25
Experts.............................................................. 25
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About This Prospectus
This prospectus is part of a registration statement that we filed with the SEC
using a "shelf" registration process. Under the shelf registration 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 $300,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we 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. You should read both this prospectus and any prospectus
supplement, together with additional information described under the heading
"Where You Can Find More Information."
As used in this prospectus, "Chieftain," "we," "us," and "our" refer to
Chieftain International, Inc., a company organized under the laws of the
Province of Alberta, Canada, and its subsidiaries.
Enforcement of Civil Liabilities
We are a corporation organized in Canada under the Business Corporations Act
(Alberta). Most of our directors and officers are not residents of the United
States, and all or a substantial portion of the assets of our directors and
officers are located outside of the United States. As a result, it may be
difficult for holders of the common shares to effect service of process within
the United States upon those directors and officers who do not reside in the
U.S., or enforce against them in the U.S. courts judgments obtained in U.S.
courts predicated upon the civil liability provisions under U.S. federal
securities laws. We have been advised by our Canadian counsel, Bennett Jones,
that there is doubt as to whether, in original actions or actions for
enforcement judgments of U.S. courts, liabilities predicated solely upon U.S.
federal securities laws are enforceable in Canada against us or any of our
directors or officers or the experts named herein, who are not residents of
the United States.
Where You Can Find More Information
We are subject to the informational requirements of the Securities Exchange
Act of 1934, which requires us to file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
document that we file at the Public Reference Room of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800- SEC-0330
for further information on the operation of its public reference room. You may
also inspect our filings at the regional offices of the SEC located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, New York, New York 10048 or over the Internet at the
SEC's web site at http://www.sec.gov.
This prospectus constitutes part of a registration statement on Form S-3 filed
with the SEC under the Securities Act of 1933. It omits some of the
information contained in the registration
<PAGE>
statement, and reference is made to the registration statement for further
information with respect to us and the securities we are offering. Any
statement contained in this prospectus concerning the provisions of any
document filed as an exhibit to the registration statement or otherwise filed
with the SEC is not necessarily complete, and in each instance reference is
made to the copy of the filed document.
The SEC 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
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information and the
information in the prospectus. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998.
2. Our Proxy Statement dated March 11, 1999 filed with the SEC on April
7, 1999.
3. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31 and June 30, 1999.
4. The description of our common shares contained in our registration
statement on Form 8-A, dated April 7, 1989, as amended on April 12,
1989, and any subsequent amendment or report filed before or after
the date of this prospectus for the purpose of updating the
description.
You may request a copy of these filings at no cost, by writing or telephoning
Esther S. Ondrack, Senior Vice President and Secretary, Chieftain
International, Inc., 1201 TD Tower, 10088 - 102 Avenue, Edmonton, Alberta,
Canada T5J 2Z1, telephone number (780) 425-1950.
Forward Looking Statements
Some of the information included in this prospectus and in the documents we
have incorporated by reference contains, and any prospectus supplement may
contain, forward-looking statements. Forward-looking statements use
forward-looking terms such as "believe", "may", "intend", "will", "project",
"budget", "should" or "anticipate" or other similar words. These statements
discuss "forward-looking" information such as:
o anticipated capital expenditures and budgets;
o future cash flows and borrowings; and
o pursuit of potential future acquisition or drilling
opportunities.
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These forward-looking statements are based on assumptions that we believe are
reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:
o fluctuations of the prices received or demand for oil and
natural gas;
o uncertainty of drilling results, reserve estimates and reserve
replacement;
o operating hazards;
o acquisition risks;
o unexpected substantial variances in capital requirements;
o environmental matters;
o Year 2000 computer related interruptions; and
o general economic conditions.
Other factors that could cause actual results to differ materially from those
anticipated are discussed in our periodic filings with the SEC, including our
Annual Report on Form 10-K for the year ended December 31, 1998.
When considering these forward-looking statements, you should keep in mind the
risk factors and other cautionary statements in this prospectus and in the
documents we have incorporated by reference. We will not update these
forward-looking statements unless the securities laws require us to do so.
Chieftain
Chieftain International, Inc. is an independent energy company engaged in the
exploration, development and production of natural gas and oil. Our producing
properties and exploration acreage are primarily located in the shallow waters
of the U.S. Gulf of Mexico. We also have properties located onshore in
Louisiana, southeast Utah and the United Kingdom sector of the North Sea.
We have assembled a large oil and gas lease acreage position in the Gulf of
Mexico. Our lease interests in the Gulf of Mexico include a balanced portfolio
of exploration and development drilling prospects. These prospects range from
high-impact prospects with relatively greater risks, which we believe have the
potential to add substantially to our reserves, to relatively lower risk
development and exploitation projects. Our exploration efforts are supported
by an extensive 3-D seismic library covering most of our leases. We believe
that our seismic database and related technological expertise have contributed
to our successful exploration and development track record. We believe our
conservative use of debt and our management of cash enable us to better take
advantage of our prospects and other opportunities, including acquisitions of
exploratory and producing property.
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Risk Factors
An investment in our securities involves significant risks. You should
carefully consider the following risk factors before you decide to buy any of
our securities. You should also carefully read and consider all of the
information we have included, or incorporated by reference, in this prospectus
before you decide to buy any of our securities.
If we cannot replace our reserves, our production and financial condition will
suffer.
Unless we successfully replace our reserves, our production will decline,
resulting in lower revenues and cash flow. Replacing our reserves is
particularly important because most of our reserves at December 31, 1998 are
in the Gulf of Mexico where wells normally have steeper rates of decline than
onshore wells. Reduced reserves may also make borrowing and raising equity
more difficult. In response to lower oil and natural gas prices, our capital
expenditures in 1999 are expected to be $55 million, compared to $92.6 million
in 1998. At this level of capital expenditures, it is more difficult to
replace our reserves. Furthermore, for the reasons discussed below, even if
capital is spent on drilling or to make acquisitions, such efforts have a risk
of being unsuccessful.
Drilling wells is speculative and capital intensive.
Exploring for oil and natural gas and developing oil and natural gas
properties require significant capital expenditures and involve a high degree
of financial risk. The budgeted costs of drilling, completing and operating
wells are often exceeded and can increase significantly when drilling costs
rise and supply tightens. Drilling may be unsuccessful for many reasons,
including weather, cost overruns, equipment shortages and mechanical
difficulties. Moreover, the successful drilling of an oil or gas well does not
ensure a profit on investment. Exploratory wells bear a much greater risk of
loss than development wells. A variety of factors, both geological and
market-related, can cause a well to become uneconomic or only marginally
economic. In addition to their costs, unsuccessful wells can hurt our efforts
to replace reserves.
Reserves on properties we buy may not meet our expectations and could change
the nature of our business.
Property acquisition decisions are based on various assumptions and subjective
judgments that are speculative. Although available geological and geophysical
information can provide information about the potential of a property, it is
impossible to predict accurately a property's production and profitability.
In addition, we may have difficulty integrating future acquisitions into our
operations, and they may not achieve our desired profitability objectives.
Likewise, as is customary in the industry, we generally acquire oil and gas
acreage without any warranty of title except through the transferor. In some
instances, title opinions are not obtained if, in our judgment, it would be
uneconomical or impractical to do so. Losses may result from title defects or
from defects in the assignment of leasehold rights. While our current
operations are primarily in shallow waters of the U.S. Gulf of Mexico
(offshore Texas and Louisiana), we may pursue acquisitions or
<PAGE>
properties located in other geographic areas, which would decrease our
geographical concentration.
Estimates of our proved reserves are uncertain, and our revenues from
production may vary significantly from estimated amounts.
The quantities and values of our proved reserves included in this prospectus
are only estimates and are subject to numerous uncertainties. Estimates by
other engineers might differ materially. The accuracy of any reserve estimate
is a function of the quality of available data and of engineering and
geological interpretation. These estimates depend on assumptions regarding
quantities and production rates of recoverable oil and natural gas reserves,
future prices for oil and natural gas, timing and amounts of development
expenditures and operating expenses, all of which will vary from those assumed
in our estimates. These variances may be significant.
Any significant variance from the assumptions used could result in the actual
amounts of oil and natural gas ultimately recovered and future net cash flows
being materially different from the estimates in our reserve reports. In
addition, results of drilling, testing, production and changes in prices after
the date of the estimate may result in substantial downward revisions. These
estimates may not accurately predict the present value of net cash flows from
oil and natural gas reserves.
At December 31, 1998, approximately 30% of our estimated proved reserves were
undeveloped. Recovery of undeveloped reserves generally requires additional
capital expenditures and successful drilling operations. The reserve data
assumes that we can and will make these expenditures and conduct these
operations successfully, which may not occur.
We do not insure against all potential losses and could be seriously harmed by
unexpected liabilities.
Exploration for and production of oil and natural gas can be hazardous,
involving natural disasters and other unforeseen occurrences such as blowouts,
cratering, fires and loss of well control, which can damage or destroy wells
or production facilities, injure or kill people, and damage property and the
environment. Because third party drilling contractors are used to drill our
wells, we may not realize the full benefit of worker's compensation laws in
dealing with their employees. We maintain insurance against many potential
losses and liabilities arising from our operations. However, in accordance
with customary industry practice, we may not be fully insured against these
risks, nor may all such risks be insurable.
Governmental regulations are costly and complex, especially regulations
relating to environmental protection.
Our U.S. exploration, production and marketing operations are regulated
extensively at the federal, state and local levels. These regulations affect
the costs, manner and feasibility of our operations. As an owner and operator
of oil and gas properties, we are subject to federal, state and local
regulation of discharge of materials into, and protection of, the environment.
We have made and will continue to make significant expenditures in our efforts
to comply with the
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requirements of these environmental regulations, which may impose liability on
us for the cost of pollution clean-up resulting from operations, subject us to
liability for pollution damage and require suspension or cessation of
operations in affected areas. Changes in, or additions to, regulations
regarding the protection of the environment could increase our compliance
costs and may negatively impact our business.
We are subject to state and local regulations that impose permitting,
reclamation, land use, conservation and other restrictions on our ability to
drill and produce. These laws and regulations can require well and facility
sites to be closed and reclaimed. We buy and sell interests in properties that
have been operated in the past, and, as a result of these transactions, we may
retain or assume clean-up or reclamation obligations for our own operations or
those of third parties.
U.S. offshore oil and gas operations are subject to regulations of the United
States Department of the Interior, which currently impose absolute liability
upon the lessee under a federal lease for the cost of pollution clean-up
resulting from the lessee's operations, and could subject the lessee to
possible liability for pollution damage. In the event of a serious incident of
pollution, a lessee under a federal lease may be required to suspend or cease
operations in the affected area.
In the United Kingdom, deposits of substances or articles at sea from offshore
oil and gas operations are subject to the licensing control of the Ministry of
Agriculture, Fisheries and Food. The breach of a license will result in
criminal liability and possible civil liability for the cost of any resulting
pollution clean-up. In the event of a serious incident of pollution, the
Ministry may vary or revoke a license.
We may have difficulty competing for oil and gas properties or supplies.
We operate in a highly competitive environment, competing with major
integrated and independent energy companies for desirable oil and gas
properties, as well as for the equipment, labor and materials required to
develop and operate those properties. Many of these competitors have financial
resources substantially greater than ours. We may incur higher costs or be
unable to acquire and develop desirable properties at costs we consider
reasonable because of this competition.
Our shareholder rights plan and by-laws discourage unsolicited takeover
proposals and could prevent you from realizing a premium for your common
shares.
We have a shareholder rights plan that may have the effect of discouraging
unsolicited takeover proposals. The rights issued under the shareholder rights
plan would cause substantial dilution to a person or group that attempts to
acquire us on terms not approved in advance by our board of directors. In
addition, our articles of incorporation and by-laws contain provisions that
may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests which include:
o provisions that members of the board of directors are elected
and retire in rotation; and
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o the ability of the board of directors to designate the terms
of, and to issue new series of, preferred shares.
Together, these provisions and our shareholder rights plan may discourage
transactions that otherwise could involve payment to you of a premium over
prevailing market prices for your common shares.
Ratios of Earnings to Fixed Charges
The following table sets forth our consolidated ratio of earnings to
fixed charges or the deficiency of our consolidated earnings to cover fixed
charges for each period indicated.
<TABLE>
<CAPTION>
Six Months
Ended Years Ended December 31,
-------------------------------------------------------
June 30, 1999 1998 1997 1996 1995 1994
------------- ------------ ---------- -------- ----------- ----------
(U.S. $ in thousands except ratios)
<S> <C> <C> <C> <C> <C> <C>
Canadian Generally Accepted Accounting Principles
Ratio of Earnings to Fixed Charges.................... - - 2.1 2.0 - -
Deficiency of Earnings to Cover Fixed Charges......... $20,820 $12,157 - - $ 4,551 $21,757
U.S. Generally Accepted Accounting Principles (1)
Ratio of Earnings to Fixed Charges.................... - - 2.5 2.3 - -
Deficiency of Earnings to Cover Fixed Charges......... $20,026 $98,013 - - $12,337 $20,798
</TABLE>
- ----------
(1) See Note 11 to the audited consolidated financial statements for the year
ended December 31, 1998, and Note 7 to the unaudited interim financial
statements for the period ended June 30, 1999 incorporated herein by
reference.
For purposes of computing the ratios of earnings to fixed charges,
earnings represent income (loss) before income taxes and fixed charges. Fixed
charges consist of interest expense and preferred share dividend requirements
of the consolidated subsidiary.
Use of Proceeds
Unless otherwise indicated in the applicable prospectus supplement, we will
use the net proceeds from the sale of the securities for our general corporate
purposes, which may include repaying indebtedness and funding capital
expenditures, acquisitions and working capital.
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Description of Share Capital
The following description of our share capital is based upon our articles of
incorporation, our by-laws and applicable provisions of law. The following
description is qualified in its entirety by reference to such articles of
incorporation and by-laws, which have been filed as exhibits to earlier
registration statements filed by us with the SEC. See "Where You Can Find More
Information".
Certain provisions of our articles of incorporation and by-laws summarized in
the following paragraphs may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a shareholder
might consider in its best interests, including those attempts that might
result in a premium over the market price for shares held.
Authorized and Outstanding Share Capital
Our authorized share capital consists of an unlimited number of common shares,
an unlimited number of First Preferred shares and an unlimited number of
Second Preferred shares. As of June 30, 1999 there were 13,348,391 common
shares outstanding and no First Preferred shares or Second Preferred shares
outstanding.
Common Shares
Voting Rights
Pursuant to our articles of incorporation and by-laws, the holders of our
common shares are entitled to one vote for each common share held at all
meetings of shareholders other than meetings of another class or series of
shares. However, pursuant to the subordinated guarantee agreement that we
entered into in 1992 when our subsidiary, Chieftain International Funding
Corp., issued its $1.8125 Convertible Redeemable Preferred shares, we have
agreed to use our best efforts, subject to applicable law, to nominate and
cause to be elected to our board of directors two persons designated by the
holders of a majority of the outstanding Chieftain International Funding Corp.
$1.8125 Convertible Redeemable Preferred shares if Chieftain International
Funding Corp. shall have failed to declare and pay dividends on its $1.8125
Convertible Redeemable Preferred shares in the manner required for any six or
more quarterly dividend payments and until all such accumulated and unpaid
dividends are paid in full.
Dividends and Liquidation Rights
The holders of our common shares are entitled to any dividends as may be
declared by the board of directors, subject to the preferential rights
attaching to the First Preferred shares and the Second Preferred shares and
any other of our shares ranking in priority to the common shares. In addition,
pursuant to the subordinated guarantee agreement that we entered into in 1992
when our subsidiary, Chieftain International Funding Corp., issued its $1.8125
Convertible Redeemable Preferred shares, we have agreed that we will not
declare or pay or set apart for payment any dividend on any of our share
capital and that no other distribution shall be paid or declared and set apart
for payment and no other distribution shall be made upon any of our share
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capital unless (a) the full cumulative dividends on all outstanding $1.8125
Convertible Redeemable Preferred shares have been paid, (b) sufficient funds
have been set apart for the payment of dividends for the then current period
on the $1.8125 Convertible Redeemable Preferred shares and (c) the full
redemption price for the $1.8125 Convertible Redeemable Preferred shares which
have been called for redemption has been paid or set apart for payment in
accordance with the certificate of designation for the $1.8125 Convertible
Redeemable Preferred shares.
In the event of our liquidation, dissolution or winding up, the holders of our
common shares are entitled, subject to the rights of the holders of our shares
ranking in priority to the common shares, to participate ratably among
themselves, and ratably with the holders of any shares ranking on a parity
with the common shares, in any distribution of our assets remaining after the
payment of all our liabilities.
Other Provisions
There are no preemptive rights to subscribe for any additional securities
which we may issue, and there are no redemption provisions or sinking fund
provisions applicable to the common shares. All outstanding common shares are
legally issued, fully paid and nonassessable.
Transfer Agents and Registrars
The transfer agent and registrar for the common shares of Chieftain in Canada
is the CIBC Mellon Trust Company at its principal office located in each of
the cities of Calgary, Vancouver, Winnipeg and Toronto. The transfer agent and
registrar for the common shares of Chieftain in the United States is
ChaseMellon Shareholder Services of New York at its principal office located
in the City of New York.
Preferred Shares
Pursuant to our articles of incorporation and by-laws, we are authorized to
issue one or more series of First Preferred shares and Second Preferred
shares. The First Preferred shares and the Second Preferred shares are alike
in all respects except that any First Preferred shares have a preference over
the Second Preferred shares upon our liquidation, dissolution or winding up or
in respect of payment of any dividends thereon.
Either the First Preferred shares or the Second Preferred shares may be issued
in one or more series. Each series may consist of the number of shares as may
be determined by our board of directors. Our board of directors may, by
resolution, fix the designation, rights, privileges, restrictions and
conditions attaching to the preferred shares of each series including:
o the rate of preferential dividends;
o the dates of payment of dividends;
o the terms and conditions of redemption, purchase or conversion, if
any; and
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o any sinking fund or other provisions.
The holders of preferred shares are not entitled, as such, to receive notice
of or to vote at any meeting of our common shareholders except as may be
required by law.
The preferred shares of each series will rank on a parity with the preferred
shares of every other series of the same class. They will be entitled to
preference over our common shares and any other shares ranking junior to them
with respect to priority in payment of dividends and to the distribution of
assets or return of capital in the event of our liquidation, dissolution or
winding up, or any other distribution of the assets or return of capital among
our shareholders for the purpose of winding up our affairs. However, pursuant
to the subordinated guarantee agreement that we entered into in 1992 when our
subsidiary, Chieftain International Funding Corp., issued its $1.8125
Convertible Redeemable Preferred shares, we may not pay dividends on our
preferred shares until the payment of dividends on the $1.8125 Convertible
Redeemable Preferred shares has been provided for. See "Common
Shares--Dividends and Liquidation Rights" for more information. In the event
of our liquidation, dissolution, winding up or other distribution of our
assets or return of capital, the holders of the preferred shares will be
entitled to receive, in priority to the holders of our common shares and any
other shares ranking junior to the preferred shares, the amount paid up on the
preferred shares and all accrued and unpaid dividends. The holders of the
preferred shares will not be entitled to share in any further distribution of
our property or assets.
The applicable prospectus supplement will describe the terms of any series of
preferred shares being offered, including:
o the number of shares and designation or title of the shares;
o any liquidation preference per share;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates of payment (or the method
for determining the dividend rates or dates of payment);
o any voting rights;
o the currency or currencies, including composite currencies in which
the preferred shares are denominated and/or in which payments will
or may be payable;
o the method by which amounts in respect of the preferred shares may
be calculated and any commodities, currencies or indices, or value,
rate or price, relevant to such calculation;
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o whether the preferred shares are convertible or exchangeable and, if
so, the securities or rights into which the preferred shares are
convertible or exchangeable, and the terms and conditions of
conversion or exchange;
o the place or places where dividends and other payments on the
preferred shares will be payable;
o any conditions or restrictions on the creation and the issuance of
any additional shares; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
The transfer agent for each series of preferred shares will be described in
the applicable prospectus supplement.
Anti-takeover effects of provisions of our Articles of Incorporation and
By-laws.
Our articles of incorporation and by-laws provide that our directors shall be
elected and retire in rotation. Directors are elected to three year terms and
only one-third of the directors stands for election in a given year. In
addition, our board of directors has the ability to designate the terms of,
and to issue new series of, preferred shares. These provisions may have the
effect of discouraging unsolicited takeover proposals that our common
shareholders might consider to be in their best interests and that otherwise
could involve payment to our common shareholders of a premium over prevailing
market prices for their common shares.
Our Rights Plan
Pursuant to our shareholder rights plan, one right to purchase additional
common shares attaches to each of our common shares. In addition, one
convertible right attaches to each $1.8125 Convertible Redeemable Preferred
share of Chieftain International Funding Corp. Each convertible right entitles
its holder to receive one right to purchase additional common shares for each
whole common share issued upon conversion of such convertible preferred share
into our common shares. The rights and the convertible rights trade
automatically with their respective shares and become exercisable under the
circumstances described below. Until a right is exercised, the holder of the
right, as such, will have no rights as a shareholder, including the right to
vote or receive dividends.
Certain Effects of our Rights Plan
Our rights plan is designed to protect our shareholders in the event of
unsolicited offers to acquire us and other coercive takeover tactics. The
primary purpose of our rights plan is to ensure that any bid for our common
shares, in the context of a takeover, will be made for all our common shares,
at the same price, and with sufficient time for our common shareholders to
fully consider the bid. The provisions of our rights plan may render an
unsolicited takeover of us more difficult or less likely to occur or might
prevent such a takeover, even though such a
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takeover may offer our common shareholders the opportunity to sell their
common shares at a price above the prevailing market rate and may be favored
by a majority of our common shareholders. See "Risk Factors--Our shareholder
rights plan and by-laws discourage unsolicited takeover proposals and could
prevent you from realizing a premium for your common shares."
Summary of Principal Attributes of our Rights Plan
The following is a general summary of the terms of our rights plan, which is
qualified in its entirety by reference to the text of the rights plan
agreement.
(a) One right to purchase common shares on the terms and conditions set
forth in the rights plan agreement is issued at no cost and attaches
to each outstanding common share.
(b) One convertible right entitling the holder to receive one right for
each whole common share issued on conversion of a $1.8125
Convertible Redeemable Preferred share of Chieftain International
Funding Corp., which is convertible into our common shares, is
issued at no cost and attaches to each such outstanding convertible
preferred share.
(c) Until the "separation time" (the eighth trading day following the
earlier of (1) the date on which a person or group of people acquire
beneficial ownership (as defined in the rights plan) of 25% or more
of our common shares (an "acquiring person") and (2) the
commencement date of a takeover bid which is not a Permitted Bid (as
defined below)), rights trade with the common shares to which they
are attached, have no value and may not be exercised.
(d) At the separation time, rights separate and trade separately from
the common shares and, promptly following the separation time,
separate certificates evidencing the rights are mailed to holders of
record of our common shares and, as applicable, to the holders of
record of the $1.8125 Convertible Redeemable Preferred shares of
Chieftain International Funding Corp. as of the separation time. In
addition, after the separation time, each right (other than any
rights held by the acquiring person) may be exercised to acquire, on
payment of the exercise price, common shares having an aggregate
market value equal to twice the exercise price. The initial exercise
price of a right is Cdn. $80 or the U.S.$ equivalent thereof (the
"exercise price") and is subject to certain adjustments. Where a
takeover bid that is not a Permitted Bid or a Competing Permitted
Bid (as defined below) is withdrawn after the separation time, our
board of directors may elect to redeem all the outstanding rights at
a price of Cdn. $0.001. Upon such redemption, the rights plan will
continue in effect as if the separation time had never occurred.
(e) A Permitted Bid is an offer:
o that is open for a minimum of 90 days;
o that is made to acquire all of our outstanding common shares;
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o that is made by an offeror holding not more than 10% of our
common shares;
o pursuant to which the offeror agrees not to acquire any
additional common shares unless 50% or more of the shares not
held by the offeror are tendered, failing which the offer will
be void; and
o which, if successful, allows shareholders who have not already
tendered their shares a further 10 business days in which to do
so.
(f) A Competing Permitted Bid has the same requirements as a Permitted
Bid except that a Competing Permitted Bid must remain open for the
greater of 21 days and the time then remaining under the outstanding
Permitted Bid. The reduction in the acceptance time for a Competing
Permitted Bid is intended to allow, to the extent possible, all
takeover bids to be considered by our common shareholders within the
same time period.
(g) The shareholder rights plan has a term of 10 years from February 23,
1994.
General Impact of our Rights Plan
Our rights plan should not deter a person from acquiring control of us if that
person is prepared to make a takeover bid pursuant to the Permitted Bid or
Competing Permitted Bid requirements. However, if an acquiring person makes a
bid to acquire 25% or more of our common shares, other than by a Permitted Bid
or Competing Permitted Bid, holders of rights, other than the acquiring
person, may acquire additional common shares at a 50% discount to the then
prevailing market price. As a result, it is unlikely that any person will
acquire 25% or more of our outstanding common shares other than by way of a
Permitted Bid or a Competing Permitted Bid.
The proxy mechanism of the Business Corporations Act (Alberta) is not affected
by our rights plan, and a shareholder may use his statutory rights thereunder
to promote a change in our management or direction. Under the Business
Corporations Act (Alberta), shareholders holding not less than 5% of a
company's outstanding shares that carry the right to vote at a meeting may
requisition the board of directors of that company to call a meeting of
shareholders.
Description of Debt Securities
This section describes the general terms and provisions of the debt securities
that we may issue under the shelf registration statement. The prospectus
supplement will describe the specific terms of the debt securities offered by
that prospectus supplement.
We may issue debt securities either separately or together with, or upon the
conversion of, or in exchange for, other securities. The debt securities are
to be either our senior obligations, issued in one or more series and referred
to herein as the "senior debt securities," or subordinated obligations issued
in one or more series and referred to herein as the "subordinated debt
securities." The senior debt securities and the subordinated debt securities
are collectively
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referred to as the "debt securities." We will issue each series of debt
securities under an "indenture" to be entered into by us and a "trustee,"
qualified under the Trust Indenture Act of 1939. The name of the trustee will
be set forth in the applicable prospectus supplement.
The indenture will be subject to and governed by the Trust Indenture Act of
1939.
Specific Terms of Each Series of Debt Securities in the Prospectus Supplement
The applicable prospectus supplement will describe the terms of any debt
securities being offered, including:
o the designation, aggregate principal amount and authorized
denominations;
o whether the debt securities are senior debt securities or
subordinated debt securities;
o the maturity date;
o the interest rate, if any, and the method for calculating the
interest rate;
o the interest payment dates and the record dates for the interest
payments;
o any mandatory or optional redemption terms or prepayment,
conversion, sinking fund or exchangeability or convertibility
provisions;
o the places where the principal and interest will be payable;
o if other than denominations of $1,000 or multiples of $1,000, the
denominations the debt securities will be issued in;
o whether the debt securities will be issued in the form of global
securities or certificates;
o additional provisions, if any, relating to the defeasance and
covenant defeasance of the debt securities;
o whether the debt securities will be issuable in registered form or
bearer form or both and, if bearer securities are issuable, any
restrictions applicable to the exchange of one form for another and
the offer, sale and delivery of bearer securities;
o any applicable material federal tax consequences;
o the dates on which a premium, if any, will be payable;
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o our right, if any, to defer payment of interest and the maximum
length of such deferral period;
o any listing on a securities exchange;
o if convertible into common shares or preferred shares, the terms on
which such debt securities are convertible;
o the terms, if any, of any guarantee of the payment of principal of,
and premium, if any, and interest on debt securities of the series
and any corresponding changes to the provisions of the indenture as
currently in effect;
o the terms, if any, of the transfer, mortgage, pledge, or assignment
as security for the debt securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including
whether certain provisions of the Trust Indenture Act are
applicable, and any corresponding changes to provisions of the
indenture as currently in effect;
o if the purchase price of any debt securities is payable in a
currency other than U.S. dollars or if principal of, or premium, if
any, or interest on any of the debt securities is payable in any
currency other than U.S. dollars, the specific terms and other
information with respect to such debt securities and such foreign
currency;
o the initial public offering price; and
o other specific terms, including covenants and the events of default
provided for with respect to the debt securities.
Debt securities may be issued with original issue discount to be sold at a
substantial discount below their principal amount. They may include "zero
coupon" securities that do not pay any cash interest for the entire term of
the securities. In the event of an acceleration of the maturity of any
original issue discount security, the amount payable to the holder thereof
upon such acceleration will be determined in the manner described in the
applicable prospectus supplement. Conditions pursuant to which payment of the
principal of the subordinated debt securities may be accelerated will be set
forth in the applicable prospectus supplement. Material federal income tax and
other considerations applicable to original issue discount securities will be
described in the applicable prospectus supplement.
Covenants
Under the indenture, we will be required to:
o pay the principal, interest and any premium on the debt securities
when due;
o maintain a place of payment;
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o deliver a report to the trustee at the end of each fiscal year
reviewing our obligations under the indenture; and
o deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
Any particular series of debt securities may contain covenants limiting:
o the incurrence of additional debt (including guarantees) by us and
our subsidiaries;
o the making of certain payments by us and our subsidiaries;
o our business activities and those of our subsidiaries;
o the issuance of other securities by our subsidiaries;
o asset dispositions;
o transactions with our subsidiaries and other affiliates;
o a change of control;
o the incurrence of liens; and
o certain mergers and consolidations involving us and our
subsidiaries.
Any additional covenants will be described in the applicable prospectus
supplement.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in a prospectus supplement, each series of debt
securities will be issued in registered form only, without coupons. The
indenture, however, provides that we may also issue debt securities in bearer
form only, or in both registered and bearer form. Bearer securities shall not
be offered, sold, resold or delivered in connection with their original
issuance in the United States or to any United States person other than
offices located outside the United States of certain United States financial
institutions.
Principal, interest and any premium on fully registered securities will be
paid at the office of the paying agent that we may designate. We will make
payment by check mailed to persons in whose names the debt securities are
registered on days specified in the indenture or any prospectus supplement.
Debt security payments in other forms will be paid at a place designated by us
and specified in a prospectus supplement.
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Fully registered securities may be transferred or exchanged at the corporate
trust office of the trustee or at any other office or agency maintained by us
for these purposes, without payment of any service charge, except for any tax
or governmental charge.
Ranking of Debt Securities
The senior debt securities will be our unsubordinated obligations and will
rank equally in right of payment with all of our other unsubordinated
indebtedness. The subordinated debt securities will be subordinated in right
of payment to all existing and future senior indebtedness as set forth in the
applicable prospectus supplement.
Global Securities
The debt securities of a series may be issued in whole or in part in the form
of one or more global securities that will be deposited with, or on behalf of,
a "depositary" identified in the prospectus supplement relating to such
series. Unless and until it is exchanged in whole or in part for individual
certificates evidencing debt securities, a global debt security may not be
transferred except as a whole (1) by the depositary to a nominee of such
depositary, (2) by a nominee of such depositary to such depositary or another
nominee of such depositary or (3) by such depositary or any such nominee to a
successor of such depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
global debt securities and certain limitations and restrictions relating to a
series of global bearer securities will be described in the prospectus
supplement.
Discharging Our Obligations
Except as may otherwise be set forth in any prospectus supplement, we may
choose to either discharge our obligations on the debt securities of any
series in a legal defeasance or release ourselves from our covenant
restrictions on the debt securities of any series in a covenant defeasance. We
may do so at any time prior to the stated maturity or redemption of the debt
securities of the series if, among other conditions:
o we deposit with the trustee sufficient cash or U.S. government
securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or redemption date of the debt
securities of the series; and
o we provide an opinion of our counsel that holders of the debt
securities will not be affected for U.S. federal income tax purposes
by the defeasance.
If we choose the legal defeasance option, holders of the debt securities of
that series will not be entitled to the benefits of the indenture except for
registration of transfer and exchange of debt securities, replacement of lost,
stolen or mutilated debt securities, any required conversion or exchange of
debt securities, any required sinking fund payments and receipt of principal
and interest on the original stated due dates or specified redemption dates.
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Book-Entry, Delivery and Form
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Book-entry debt
securities of a series will be issued in the form of a global debt security
that will be deposited with DTC. This means that we will not issue
certificates to each holder. One global debt security will be issued to DTC
who will keep a computerized record of its participants (for example, your
broker) whose clients have purchased the debt securities. The participant will
then keep a record of its clients who purchased the debt securities. Unless it
is exchanged in whole or in part for a certificated debt security, a global
debt security may not be transferred; except that DTC, its nominees and their
successors may transfer a global debt security as a whole to one another.
Beneficial interests in global debt securities will be shown on, and transfers
of global debt securities will be made only through, records maintained by DTC
and its participants.
DTC has provided us with the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the provisions of Section 17A of the Securities Exchange Act
of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also records the settlement among Direct Participants of
securities transactions, such as transfers and pledges, in deposited
securities through computerized records for Direct Participant's accounts.
This eliminates the need to exchange certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and some other organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a Direct
Participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global debt securities
for all purposes. Accordingly, we, the trustee and any paying agent will have
no direct responsibility or liability to pay amounts due on the global debt
securities to owners of beneficial interests in the global debt securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date
according to their respective holdings of beneficial interests in the global
debt securities as shown on DTC's records. In addition, it is DTC's current
practice to assign any consenting or voting rights to Direct Participants
whose accounts are credited with debt securities on a record date, by using an
omnibus proxy. Payments by participants to owners of beneficial interests in
the global debt securities, and voting by
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participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with debt
securities held for the account of customers registered in "street name."
However, payments will be the responsibility of the participants and not of
DTC, the trustee or us.
Debt securities represented by a global debt security will be exchangeable for
certificated debt securities with the same terms in authorized denominations
only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary or if DTC ceases to be a clearing agency registered under
applicable law and a successor depositary is not appointed by us
within 90 days; or
o We determine not to require all of the debt securities of a series
to be represented by a global debt security and notify the trustee
of our decision.
Modification of Indenture
Under the indenture, generally we and the trustee will be able to modify our
rights and obligations and the rights of the holders with the consent of the
holders of a specified percentage of the outstanding holders of each series of
debt affected by the modification. No modification of the principal or
interest payment terms, and no modification reducing the percentage required
for modifications, will be effective against any holder without its consent.
In addition, we and the trustee will be able to amend the indenture without
the consent of any holder of the debt securities to make technical changes.
The Trustees
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. Each trustee is permitted to engage in other
transactions with us and our subsidiaries from time to time, provided that if
such Trustee acquires any conflicting interest it must eliminate such conflict
upon the occurrence of an event of default under the relevant indenture, or
else resign.
Description of Warrants
We may issue warrants for the purchase of debt securities, preferred shares or
common shares. Warrants may be issued independently or together with debt
securities, preferred shares or common shares offered by any prospectus
supplement and may be attached to or separate from any such offered
securities. Each series of warrants will be issued under a separate warrant
agreement to be entered into between us and a bank or trust company, as
warrant agent. The warrant agent will act solely as our agent in connection
with the warrants and will not assume any obligation or relationship of agency
or trust for or with any holders or beneficial owners of warrants. The
following summary of certain provisions of the warrants does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
provisions of the
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warrant agreement that will be filed with the SEC in connection with the
offering of such warrants.
Debt Warrants
The prospectus supplement relating to a particular issue of debt warrants will
describe the terms of such debt warrants, including the following:
o the title of such debt warrants;
o the offering price for such debt warrants, if any;
o the aggregate number of such debt warrants;
o the designation and terms of the debt securities that may be
purchased upon exercise of such debt warrants;
o if applicable, the designation and terms of the debt securities with
which such debt warrants are issued and the number of such debt
warrants issued with each such debt security;
o if applicable, the date from and after which such debt warrants and
any debt securities issued therewith will be separately
transferable;
o the principal amount of debt securities that may be purchased upon
exercise of a debt warrant and the price at which such principal
amount of debt securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property);
o the date on which the right to exercise such debt warrants shall
commence and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such debt warrants
that may be exercised at any one time;
o whether the debt warrants represented by the debt warrant
certificates or debt securities that may be issued upon exercise of
the debt warrants will be issued in registered or bearer form;
o information with respect to book-entry procedures, if any;
o the currency or currency units in which the offering price, if any,
and the exercise price are payable;
o if applicable, a discussion of material United States federal income
tax considerations;
o the antidilution provisions of such debt warrants, if any;
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o the redemption or call provisions, if any, applicable to such debt
warrants; and
o any additional terms of such debt warrants, including terms,
procedures, and limitations relating to the exchange and exercise of
such debt warrants.
Share Warrants
The prospectus supplement relating to any particular issue of preferred share
warrants or common share warrants will describe the terms of such warrants,
including the following:
o the title of such warrants;
o the offering price for such warrants, if any;
o the aggregate number of such warrants;
o the designation and terms of the common shares or preferred shares
that may be purchased upon exercise of such warrants;
o if applicable, the designation and terms of the offered securities
with which such warrants are issued and the number of such warrants
issued with each such offered security;
o if applicable, the date from and after which such warrants and any
offered securities issued therewith will be separately transferable;
o the number of common shares or preferred shares that may be
purchased upon exercise of a warrant and the price at which such
shares may be purchased upon exercise;
o the date on which the right to exercise such warrants shall commence
and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such warrants that
may be exercised at any one time;
o the currency or currency units in which the offering price, if any,
and the exercise price are payable;
o if applicable, a discussion of material United States federal income
tax considerations;
o the antidilution provisions of such warrants, if any;
o the redemption or call provisions, if any, applicable to such
warrants; and
o any additional terms of such warrants, including terms, procedures
and limitations relating to the exchange and exercise of such
warrants.
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Plan of Distribution
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 from time
to time), at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Each prospectus
supplement will describe the method of distribution of the securities offered
therein.
Chieftain may sell securities directly, through agents designated from time to
time, through underwriting syndicates led by one or more managing underwriters
or through one or more underwriters acting alone. Each prospectus supplement
will describe the terms of the securities to which such prospectus supplement
relates, the name or names of any underwriters or agents with whom we have
entered into arrangements with respect to the sale of such securities, the
public offering or purchase price of such securities and the net proceeds we
will receive from such sale. In addition, each prospectus supplement will
describe any underwriting discounts and other items constituting underwriters'
compensation, any discounts and commissions allowed or paid to dealers, if
any, any commissions allowed or paid to agents, and the securities exchange or
exchanges, if any, on which such securities will be listed. Dealer trading may
take place in certain of the securities, including securities not listed on
any securities exchange.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters or agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for
payment and delivery at a future date. Institutions with which such contracts
may be made include, among others:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies; and
o educational and charitable institutions.
In all cases, such institutions must be approved by us. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of any
purchaser under any such contract will not be subject to any conditions except
that (a) the purchase of the securities will not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject and (b) if the securities are also being sold to underwriters acting
as principals for their own account, the underwriters will have purchased such
securities not sold for delayed delivery. The underwriters and such other
persons will not have any responsibility in respect of the validity or
performance of such contracts.
Any underwriter or agent participating in the distribution of the securities
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the securities so offered and sold
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and any discounts or commission received by them, and any profit realized by
them on the sale or resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act.
Certain of any such underwriters and agents including their associates, may
engage in transactions with and perform services for us and our subsidiaries
in the ordinary course of business. One or more of our affiliates may from
time to time act as an agent or underwriter in connection with the sale of the
securities to the extent permitted by applicable law. The participation of any
such affiliate in the offer and sale of the securities will comply with Rule
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. regarding the offer and sale of securities of an affiliate.
Except as indicated in the applicable prospectus supplement, the securities
are not expected to be listed on a securities exchange, except for the common
shares, which are listed on the American Stock Exchange and The Toronto Stock
Exchange, and any underwriters or dealers will not be obligated to make a
market in securities. We cannot predict the activity or liquidity of any
trading in the securities.
Legal Matters
The validity of the securities in respect of which this prospectus is being
delivered will be passed on for us by Bennett Jones, Calgary, Alberta. Certain
other legal matters in connection with the securities will be passed on for us
by Cravath, Swaine & Moore, New York, New York.
Experts
The audited financial statements incorporated by reference in this prospectus
have been audited by PricewaterhouseCoopers LLP, as indicated in their report
with respect to such audited financial statements, and are incorporated by
reference in reliance upon the authority of such firm as experts in giving
such reports. PricewaterhouseCoopers LLP is located at 1501 TD Tower, 10088 -
102 Avenue, Edmonton, Alberta, Canada, T5J 2Z1. The reserve estimates,
relating to our U.S. reserves, of Netherland, Sewell & Associates, Inc.
incorporated by reference in this prospectus have been incorporated by
reference in reliance upon the authority of such firm as experts in petroleum
engineering.
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PART II
INFORMATION NOT REQUIRED TO BE IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth fees payable to the Securities and Exchange
Commission and other estimated expenses expected to be incurred in connection
with the issuance and distribution of the securities being registered. All
such fees and expenses shall be paid by Chieftain:
Securities and Exchange Commission Registration Fee....... $ 83,400
Legal Fees and Expenses .................................. 100,000
Accounting Fees and Expenses.............................. 10,000
Miscellaneous............................................. 25,000
----------
Total............................................... $ 218,400
==========
Item 15. Indemnification of Directors and Officers
Section 119.(1) of the Business Corporations Act (Alberta) provides as
follows:
119.(1) Indemnification by corporation. Except in respect of an action by or
on behalf of the corporation or body corporate to procure a judgment in its
favor, a corporation may indemnify a director or officer of the corporation, a
former director or officer of the corporation or a person who acts or acted at
the corporation's request as a director or officer of a body corporate of
which the corporation is or was a shareholder or creditor, and his heirs and
legal representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by
him in respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a director or
officer of that corporation or body corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the corporation, and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
(2) A corporation may with the approval of the Court indemnify a person
referred to in subsection (1) in respect of an action by or on behalf of the
corporation or body corporate to procure a judgment in its favor, to which he
is made a party by reason of being or having been a director or an officer of
the corporation or body corporate, against all costs, charges and
II-1
<PAGE>
expenses reasonably incurred by him in connection with the action if he
fulfills the conditions set out in subsections (1)(a) and (b).
(3) Notwithstanding anything in this section, a person referred to in
subsection (1) is entitled to indemnity from the corporation in respect of all
costs, charges and expenses reasonably incurred by him in connection with the
defense of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer of
the corporation or body corporate, if the person seeking indemnity
(a) was substantially successful on the merits in his defense of the
action or proceeding,
(b) fulfills the conditions set out in subsection (1)(a) and (b),
and
(c) is fairly and reasonably entitled to indemnity.
(4) A corporation may purchase and maintain insurance for the benefit of any
person referred to in subsection (1) against any liability incurred by him
(a) in his capacity as a director or officer of the corporation,
except when the liability relates to his failure to act honestly and in
good faith with a view to the best interests of the corporation, or
(b) in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the corporation's
request, except when the liability relates to his failure to act honestly
and in good faith with a view to the best interests of the body
corporate.
(5) A corporation or a person referred to in subsection (1) may apply to the
Court for an order approving an indemnity under this section and the Court may
so order and make any further order it thinks fit.
(6) On an application under subsection (5), the Court may order notice be
given to any interested person and that person is entitled to appear and be
heard in person or by counsel.
Section Seven of Chieftain's by-laws, adopted in November 1988, contains the
following provisions with respect to indemnification of Chieftain's officers
and directors (the "Act" meaning the Business Corporations Act (Alberta) and
the "Corporation" meaning Chieftain):
7.01 Conflict of Interest. A director or officer shall not be disqualified
from his office, or be required to vacate his office, by reason only that he
is a party to, or is a director or officer of or has a material interest in
any person who is a party to, a material contract or proposed material
contract with the Corporation or a subsidiary thereof. Such a director or
officer shall, however, disclose the nature and extent of his interest in the
contract at the time and in the manner provided by the Act. Subject to the
provisions of the Act, a director or officer shall not by reason only of his
office be accountable to the Corporation or to its shareholders for any profit
or gain realized from such a contract or transaction, and such contract or
transaction shall not be void or voidable by reason only of the director's or
officer's interest therein, provided that the
II-2
<PAGE>
required declaration and disclosure of interest are properly made, the
contract or transaction is approved by the board of shareholders, if
necessary, and it is fair and reasonable to the Corporation at the time it was
approved and, if required by the Act, the director refrains from voting as a
director on the contract or transaction.
7.02 Limitation of Liability. Every director and officer of the Corporation in
exercising his powers and discharging his duties shall act honestly and in
good faith with a view to the best interests of the Corporation and exercise
the care, diligence and skill that a reasonably prudent person would exercise
in comparable circumstances. Subject to the foregoing, no director or officer
for the time being of the Corporation shall be liable for the acts, neglects
or defaults of any other director or officer or employee, or for joining in
any act for conformity, or for any loss, damage or expense happening to the
Corporation through the insufficiency or deficiency of title to any property
acquired by the Corporation or for or on behalf of the Corporation or for the
insufficiency or deficiency of any security in or upon which any of the moneys
of or belonging to the Corporation shall be placed or invested, or for any
loss or damage arising from the bankruptcy, insolvency or tortious act of any
person, firm or corporation including any person, firm or corporation with
whom or with which any moneys, securities or effects shall be lodged or
deposited, or for any loss, conversion, misapplication or misappropriation of
or any damage resulting from any dealings with any moneys, securities or other
assets of or belonging to the Corporation or for any other loss, damage or
misfortune whatsoever which may happen in the execution of the duties of his
respective office or trust or in relation thereto; provided, however, that
nothing herein shall relieve any director or officer from the duty to act in
accordance with the Act or from a liability for any breach thereof. The
directors for the time being of the Corporation shall not be under any duty or
responsibility in respect of any contract, act or transaction whether or not
made, done or entered into in the name of or on behalf of the Corporation,
except such as shall have been submitted to and authorized or approved by the
board.
No act or proceeding of any director or officer or the board shall be deemed
invalid or ineffective by reason of the subsequent ascertainment of any
irregularity in regard to such act or proceeding or the qualification of such
director or officer or board.
7.03 Indemnity. Subject to the Act, the Corporation shall indemnify a director
or officer of the Corporation, a former director or officer of the
Corporation, and a person who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the Corporation is or was a
shareholder or creditor, if:
(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
Every employee of the Corporation, other than an employee who is a director or
officer of the Corporation, and his heirs and legal representatives shall be
indemnified by the Corporation against all costs, charges and expenses,
including any amount paid to settle any action or satisfy
II-3
<PAGE>
any judgment, which any such employee or his heirs or legal representatives
shall incur or become liable to pay, by reason of any contract entered into or
any act or thing done by him as an employee or in any way relating to the
discharge or execution of his duties, excepting any cost, charges or expenses
as are occasioned as a result of the fraud, dishonesty, willful neglect or
default of such employee.
The Corporation shall also indemnify such persons in such other circumstances
as the Act permits or requires. Nothing in this Section shall limit the right
of any person entitled to indemnity to claim indemnity apart from the
provisions of this Section or, subject to the Act, be construed as a
limitation upon the right of the Corporation to exercise its general power to
enter into a contract or undertaking of indemnity with or for the benefit of
any director, officer, employee or agent in any proper case not provided for
in these by-laws.
7.04 Insurance. The Corporation may purchase and maintain insurance for the
benefit of any person referred to in Section 7.03 against any liability
incurred by him:
(a) in his capacity as a director or officer of the Corporation,
except when the liability relates to his failure to act honestly and in
good faith with a view to the best interests of the Corporation;
(b) in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the Corporation's
request, except when the liability relates to his failure to act honestly
and in good faith with a view to the best interests of the body
corporate; or
(c) in respect of an employee or agent who is not a director or
officer of the Corporation, in his capacity as an employee or agent of
the Corporation, except when the liability relates to his fraud,
dishonesty, willful neglect or default.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits. See the Exhibit Index following the signature pages to this
Registration Statement.
(b) Financial Statement Schedules. None.
Item 17. Undertakings
(a) Undertaking Pursuant to Rule 415:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
II-4
<PAGE>
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference:
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in 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.
(c) Undertaking in Respect of Indemnification:
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expense incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action,
II-5
<PAGE>
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(d) Undertaking Pursuant to Rule 430A:
The undersigned registrant hereby undertakes that:
(1) For purposes 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 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
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.
(e) Undertaking Regarding Qualification of Trust Indentures Under the
Trust Indenture Act of 1939 for Delayed Offerings:
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Chieftain
International, Inc. 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 Edmonton, Province of Alberta,
Canada, on October 8, 1999.
CHIEFTAIN INTERNATIONAL, INC.
By: /s/ Stanley A. Milner
----------------------------
Name: Stanley A. Milner
Title: President, Chief
Executive Officer
and Director
POWER OF ATTORNEY
We, the undersigned directors and officers of Chieftain International, Inc.,
do hereby constitute and appoint each of Stanley A. Milner and Edward L. Hahn
our true and lawful attorney-in-fact and agent to do any and all acts and
things in our name and behalf in our capacities as directors and officers, and
to execute any and all instruments for us and in our names in the capacities
indicated below which said attorney-in-fact may deem necessary or advisable to
enable Chieftain International, Inc. to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically, but not limited to, power and authority to
sign for us, or any of us, in the capacities indicated below and any and all
amendments (including pre-effective and post-effective amendments or any other
registration statement filed pursuant to the provisions of Rule 462(b) under
the Securities Act of 1933) hereto; and we do hereby ratify and confirm all
that said attorney-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 below by the following persons in the capacities and
on the dates indicated:
II-7
<PAGE>
Signature Title Date
- --------- ----- -----
/s/ Stanley A. Milner President, Chief Executive October 8, 1999
- ------------------------- Officer and Director
Stanley A. Milner (Principal Executive Officer)
/s/ Edward L. Hahn Senior Vice President, Finance October 8, 1999
- ------------------------- and Treasurer
Edward L. Hahn (Principal Financial Officer)
/s/ Ronald J. Stefure Vice President and Controller October 8, 1999
- ------------------------- (Principal Accounting Officer)
Ronald J. Stefure
/s/ Stephen C. Hurley Director and Authorized October 8, 1999
- ------------------------- Representative in the United
Stephen C. Hurley States
/s/ Hugh J. Kelly Director October 4, 1999
- -------------------------
Hugh J. Kelly
/s/ John E. Maybin Director September 30, 1999
- -------------------------
John E. Maybin
Director
- -------------------------
David E. Mitchell
/s/ Louis G. Munin Director October 8, 1999
- -------------------------
Louis G. Munin
/s/ Esther S. Ondrack Director October 8, 1999
- -------------------------
Esther S. Ondrack
/s/ Stuart T. Peeler Director October 8, 1999
- -------------------------
Stuart T. Peeler
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document and Description
- ------ ------------------------
1* Form of Underwriting Agreement between Chieftain and the
underwriters named therein
4.1 Form of Indenture
4.2* Form of Warrant Agreement
4.3** Shareholder Rights Plan Agreement
5.1 Opinion of Bennett Jones
5.2 Opinion of Cravath, Swaine & Moore
12* Calculation of ratios of earnings to fixed charges
23.1 Consent of Independent Accountants
23.2 Consent of Independent Petroleum Engineers and Geologists
23.3 Consent of Bennett Jones (included in Exhibit 5.1)
23.4 Consent of Cravath, Swaine & Moore (included in Exhibit 5.2)
24 Power of Attorney (contained on the signature page hereto)
25* Statement on Form T-1 of Eligibility of trustee for the debt
securities
- -------------
* To be filed by amendment
**Incorporated by reference to Chieftain's Form 8-K filed with the SEC on
May 31, 1994
II-9
EXHIBIT 4.1
=============================================================================
CHIEFTAIN INTERNATIONAL, INC.
and
---------------------------
as Trustee
---------------------------
Indenture
Dated as of ________ __, ____
-----------------
Debt Securities
=============================================================================
<PAGE>
CHIEFTAIN INTERNATIONAL INC.
Debt Securities
CROSS REFERENCE SHEET*
This Cross Reference Sheet shows the location in the Indenture of the
provisions inserted pursuant to Sections 310-318(a), inclusive of the Trust
Indenture Act of 1939.
Indenture
TIA Section Section
310 (a)(1)............................................... 7.10
(a)(2) .............................................. 7.10
(a)(3) .............................................. 7.10
(a)(5) .............................................. 7.10
(b) ................................................. 7.10
(c) ................................................. N.A.**
311 (a) ................................................. 7.11
(b) ................................................. 7.11
(c) ................................................. N.A.
312 (a).................................................. 5.01
(b) ................................................. 5.02
(c) ................................................. 5.02
313 (a) ................................................. 5.04
(b)(1) .............................................. 5.04
(b)(2) .............................................. 5.04
(c) ................................................. 12.03
(d) ................................................. 5.04
314 (a)(1) .............................................. 5.03(a)
(a)(2) .............................................. 5.03(b)
(a)(3) .............................................. 5.03(a)&(b)
& 12.03
(a)(4) .............................................. 5.04
(b) ................................................. N.A.
(c)(1) .............................................. 12.05
(c)(2) .............................................. 12.05
(c)(3) .............................................. N.A.
(d) ................................................. N.A.
(e) ................................................. 12.05
(f) ................................................. 4.06
315 (a) ................................................. 7.01(a)
<PAGE>
2
(b) ................................................. 6.07 &
12.03
(c) ................................................. 7.01
(d) ................................................. 7.01
(e) ................................................. 6.08
316 (a)(last sentence) .................................. 1.01
(a)(1)(A)............................................ 6.06
(a)(1)(B) ........................................... 6.06
(a)(2) .............................................. 9.01(d)
(b) ................................................. 6.04
(c) ................................................. 5.05
317 (a)(1) .............................................. 6.02
(a)(2) .............................................. 6.02
(b) ................................................. 4.04
318 (a) ................................................. 12.07
* The Cross Reference Sheet is not part of the Indenture.
** N.A. means "Not Applicable."
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Certain Terms Defined.................................... 1
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act.......................................... 12
SECTION 1.03. Rules of Construction.................................... 12
ARTICLE II
Debt Securities
SECTION 2.01. Forms Generally.......................................... 13
SECTION 2.02. Form of Trustee's Certificate of
Authentication......................................... 14
SECTION 2.03. Principal Amount; Issuable in Series..................... 14
SECTION 2.04. Execution of Debt Securities............................. 18
SECTION 2.05. Authentication and Delivery of Debt
Securities............................................. 18
SECTION 2.06. Denomination of Debt Securities.......................... 20
SECTION 2.07. Registration of Transfer and Exchange.................... 21
SECTION 2.08. Temporary Debt Securities................................ 22
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen
Debt Securities........................................ 23
SECTION 2.10. Cancelation of Surrendered Debt
Securities............................................. 24
SECTION 2.11. Provisions of the Indenture and Debt
Securities for the Sole Benefit of the
Parties and the Holders................................ 25
SECTION 2.12. Payment of Interest; Rights Preserved.................... 25
SECTION 2.13. Securities Denominated in Foreign
Currencies............................................. 26
SECTION 2.14. Wire Transfers........................................... 26
SECTION 2.15. Securities Issuable in the Form of a
Global Security........................................ 27
SECTION 2.16. Medium Term Securities................................... 30
SECTION 2.17. Defaulted Interest....................................... 30
SECTION 2.18. Judgments................................................ 31
SECTION 2.19. CUSIP Numbers............................................ 31
ARTICLE III
Redemption of Debt Securities
SECTION 3.01. Applicability of Article................................. 32
SECTION 3.02. Notice of Redemption; Selection of Debt
Securities............................................. 32
<PAGE>
2
SECTION 3.03. Payment of Debt Securities Called for
Redemption............................................. 34
SECTION 3.04. Mandatory and Optional Sinking Funds..................... 35
SECTION 3.05. Redemption of Debt Securities for Sinking
Fund................................................... 35
ARTICLE IV
Particular Covenants of the Company
SECTION 4.01. Payment of Principal of, and Premium,
if any, and Interest on, Debt
Securities.............................................. 38
SECTION 4.02. Maintenance of Offices or Agencies for
Registration of Transfer, Exchange and
Payment of Debt Securities.............................. 38
SECTION 4.03. Appointment to Fill a Vacancy in the
Office of Trustee....................................... 39
SECTION 4.04. Duties of Paying Agents, etc.............................. 39
SECTION 4.05. Statement by Officers as to Default....................... 40
SECTION 4.06. Further Instruments and Acts.............................. 41
SECTION 4.07. Existence................................................. 41
SECTION 4.08. Maintenance of Properties................................. 41
SECTION 4.09. Payment of Taxes and Other Claims......................... 41
SECTION 4.10. Payment of Additional Amounts............................. 42
ARTICLE V
Holders' Lists and Reports
by the Company And the Trustee
SECTION 5.01. Company to Furnish Trustee Information
as to Names and Addresses of Holders;
Preservation of Information............................. 43
SECTION 5.02. Communications to Holders................................. 44
SECTION 5.03. Reports by Company........................................ 44
SECTION 5.04. Reports by Trustee........................................ 45
SECTION 5.05. Record Dates for Action by Holders........................ 45
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
SECTION 6.01. Events of Default......................................... 46
SECTION 6.02. Collection of Indebtedness by Trustee,
etc..................................................... 49
SECTION 6.03. Application of Moneys Collected by
Trustee................................................. 51
SECTION 6.04. Limitation on Suits by Holders............................ 52
SECTION 6.05. Remedies Cumulative; Delay or Omission
in Exercise of Rights Not a Waiver
of Default.............................................. 53
<PAGE>
3
SECTION 6.06. Rights of Holders of Majority in Principal
Amount of Debt Securities to Direct
Trustee and to Waive Default............................ 53
SECTION 6.07. Trustee To Give Notice of Defaults Known
to It, but May Withhold Such Notice
in Certain Circumstances............................... 54
SECTION 6.08. Requirement of an Undertaking To Pay Costs
in Certain Suits under the Indenture
or Against the Trustee.................................. 54
ARTICLE VII
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities....................... 55
SECTION 7.02. Certain Rights of Trustee................................. 57
SECTION 7.03. Trustee Not Liable for Recitals in
Indenture or in Debt Securities......................... 58
SECTION 7.04. Trustee, Paying Agent or Registrar May
Own Debt Securities..................................... 59
SECTION 7.05. Moneys Received by Trustee To Be Held in
Trust................................................... 59
SECTION 7.06. Compensation and Reimbursement............................ 59
SECTION 7.07. Right of Trustee to Rely on an Officers'
Certificate Where No Other Evidence
Specifically Prescribed................................. 60
SECTION 7.08. Separate Trustee; Replacement of Trustee.................. 60
SECTION 7.09. Successor Trustee by Merger............................... 62
SECTION 7.10. Eligibility; Disqualification............................. 62
SECTION 7.11. Preferential Collection of Claims Against
Company................................................. 63
ARTICLE VIII
Concerning the Holders
SECTION 8.01. Evidence of Action by Holders............................. 63
SECTION 8.02. Proof of Execution of Instruments and of
Holding of Debt Securities.............................. 63
SECTION 8.03. Who May Be Deemed Owner of Debt
Securities ............................................. 64
SECTION 8.04. Instruments Executed by Holders Bind
Future Holders.......................................... 64
<PAGE>
4
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Purposes for Which Supplemental Indenture May
Be Entered into Without Consent of
Holders................................................. 65
SECTION 9.02. Modification of Indenture with Consent of
Holders of Debt Securities.............................. 68
SECTION 9.03. Effect of Supplemental Indentures......................... 70
SECTION 9.04. Debt Securities May Bear Notation of
Changes by Supplemental Indentures...................... 70
ARTICLE X
Amalgamation, Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Amalgamations, Consolidations and Mergers of
the Company............................................. 70
SECTION 10.02. Rights and Duties of Successor Corporation................ 71
ARTICLE XI
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Applicability of Article.................................. 72
SECTION 11.02. Satisfaction and Discharge of Indenture:
Defeasance.............................................. 72
SECTION 11.03. Conditions of Defeasance.................................. 73
SECTION 11.04. Application of Trust Money................................ 75
SECTION 11.05. Repayment to Company...................................... 75
SECTION 11.06. Indemnity for U.S. Government
Obligations ............................................ 75
SECTION 11.07. Reinstatement............................................. 75
ARTICLE XII
Subordination of Debt Securities
SECTION 12.01. Applicability of Article; Agreement To
Subordinate............................................. 76
SECTION 12.02. Liquidation, Dissolution, Bankruptcy...................... 76
SECTION 12.03. Default on Senior Indebtedness............................ 77
SECTION 12.04. Acceleration of Payment of Debt
Securities.............................................. 78
SECTION 12.05. When Distribution Must Be Paid Over....................... 78
SECTION 12.06. Subrogation............................................... 78
SECTION 12.07. Relative Rights........................................... 79
<PAGE>
5
SECTION 12.08. Subordination May Not Be Impaired by
Company................................................. 79
SECTION 12.09. Rights of Trustee and Paying Agent........................ 79
SECTION 12.10. Distribution or Notice to
Representative ......................................... 80
SECTION 12.11. Article XII Not to Prevent Defaults or
Limit Right to Accelerate............................... 80
SECTION 12.12. Trust Moneys Not Subordinated............................. 80
SECTION 12.13. Trustee Entitled to Rely.................................. 80
SECTION 12.14. Trustee to Effectuate Subordination....................... 81
SECTION 12.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness............................................ 81
SECTION 12.16. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions.............................................. 81
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns of Company Bound
by Indenture............................................ 82
SECTION 13.02. Acts of Board, Committee or Officer of
Successor Company Valid................................. 82
SECTION 13.03. Required Notices or Demands............................... 82
SECTION 13.04. Indenture and Debt Securities to Be
Construed in Accordance with the
Laws of the State of New York........................... 83
SECTION 13.05. Officers' Certificate and Opinion of
Counsel to Be Furnished upon
Application or Demand by the
Company................................................. 83
SECTION 13.06. Payments Due on Legal Holidays............................ 84
SECTION 13.07. Provisions Required by Trust Indenture
Act to Control.......................................... 84
SECTION 13.08. Computation of Interest on Debt
Securities ............................................. 84
SECTION 13.09. Rules by Trustee, Paying Agent and
Registrar............................................... 84
SECTION 13.10. No Recourse Against Others................................ 84
SECTION 13.11. Consent to Jurisdiction and Service of
Process................................................. 85
SECTION 13.12. Severability.............................................. 86
SECTION 13.13. Effect of Headings........................................ 86
SECTION 13.14. Indenture May Be Executed in
Counterparts............................................ 86
<PAGE>
INDENTURE dated as of ,
between CHIEFTAIN INTERNATIONAL, INC., a
corporation duly organized and existing under
the laws of the Province of Alberta (hereinafter
sometimes called the "Company"), and
_________________, a __________ banking
corporation (hereinafter sometimes called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement to the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the
Debt Securities are authenticated, issued and delivered, and in consideration
of the premises, and of the purchase and acceptance of the Debt Securities by
the holders thereof, the Company and the Trustee covenant and agree with each
other, for the benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Terms Defined. The terms defined in this
Section 1.01 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
Indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. All other terms used in this Indenture which are defined in
the Trust Indenture Act or which are by reference therein defined in the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in
the Trust Indenture Act and in the
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2
Securities Act as in force as of the date of original execution of this
Indenture.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any business day
in such city.
"Bank Indebtedness" means any and all amounts payable under or in
respect of (i) any credit facilities, as supplemented, amended, modified,
refinanced or replaced at any time from time to time, and (ii) any lines of
credit and letters of credit of the Company, in each case, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees
and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means either the Board of Directors of the
Company or any duly authorized committee or subcommittee of such Board, except
as the context may otherwise require.
"business day" means, when used with respect to any Place of Payment
specified pursuant to Section 2.03, any day that is not a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust companies
in such Place of Payment are authorized or obligated by law to close, except
as otherwise specified pursuant to Section 2.03.
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3
"Capital" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Shares, but excluding any debt securities
convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP; and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty.
"Common Shares" means the common shares, of the Company, which
shares are currently listed on the American Stock Exchange.
"Company" means Chieftain International Inc., an Alberta
corporation, and, subject to the provisions of Article X, shall also include
its successors and assigns.
"Company Order" means a written order of the Company, signed by its
Chairman of the Board, President or any Vice President and by its Treasurer,
Secretary, any Assistant Treasurer or any Assistant Secretary.
"corporate trust office of the Trustee" or other similar term means
the office of the Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered in the United
States of America, except that with respect to the presentation of Debt
Securities for payment or for registration of transfer and exchange, such term
shall also mean the office of the Trustee or the Trustee's agent in the
Borough of Manhattan, the City and State of New York, at which at any
particular time its corporate agency business shall be conducted.
"Currency" means Dollars or Foreign Currency.
"Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture and more particularly means any debt security
or debt securities, as the case may be, of any series authenticated and
delivered under this Indenture.
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4
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company
pursuant to either Section 2.03 or 2.15, with respect to registered Debt
Securities of any series issuable or issued in whole or in part in the form of
one or more Global Securities, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Exchange Act or other applicable statute or regulations.
"Designated Senior Indebtedness" means as to any series of Debt
Securities subordinated pursuant to the provision of Article XII, (i) the Bank
Indebtedness and (ii) any other Senior Indebtedness of the Company identified
as Designated Senior Indebtedness in the resolution of the Board of Directors
and accompanying Officers' Certificate or supplemental indenture setting forth
the terms, including as to subordination, of such series.
"Disqualified Shares" of a Person means Redeemable Shares of such
Person as to which the maturity, mandatory redemption, conversion or exchange
or redemption at the option of the holder thereof occurs, or may occur, on or
prior to the first anniversary of the Stated Maturity of the Debt Securities.
"Dollar" or "$" means such currency of the United States as at the
time of payment is legal tender for the payment of public and private debts.
"Dollar Equivalent" means, with respect to any monetary amount in a
Foreign Currency, at any time for the determination thereof, the amount of
Dollars obtained by converting such Foreign Currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable Foreign Currency as quoted by Citibank, N.A. (unless another
comparable financial institution is designated by the Company) in New York,
New York at approximately 11:00 a.m. (New York time) on the date two business
days prior to such determination.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934.
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5
"Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency issued or adopted by the
government of any country other than the United States, any other currency
available to banks, freely transferable and freely convertible to Dollars, or
a composite currency the value of which is determined by reference to the
values of the currencies of any group of countries.
"GAAP" means generally accepted accounting principles in Canada as
in effect from time to time. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP
consistently applied.
"Global Security" means with respect to any series of Debt
Securities issued hereunder, a Debt Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depositary or pursuant
to the Depositary's instruction, all in accordance with this Indenture and any
Indentures supplemental hereto, or resolution of the Board of Directors and
set forth in an Officers' Certificate, which shall be registered in the name
of the Depositary or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all the
Outstanding Debt Securities of such series or any portion thereof, in either
case having the same terms, including, without limitation, the same original
issue date, date or dates on which principal is due and interest rate or
method of determining interest.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
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6
"Holder," "Holder of Debt Securities" or other similar terms mean,
with respect to a Registered Security, the Registered Holder.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by
such Subsidiary at the time it becomes a Subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of Indebtedness of such Person for borrowed money;
(ii) the principal of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(iii) all Capitalized Lease Obligations of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables);
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the third business day following
receipt by such Person of a demand for reimbursement following payment on
the letter of credit;
(vi) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Shares
(but excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such
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7
Indebtedness is assumed by such Person; provided, however, that the
amount of such Indebtedness shall be the lesser of (A) the fair market
value of such asset at such date of determination and (B) the amount of
such Indebtedness of such other Persons; and
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Shares or Preferred Shares that does not
have a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Shares as if such Shares were redeemed,
repaid or repurchased on any date on which Indebtedness shall be required to
be determined pursuant to this Indenture; provided, however, that if such
Shares are not then permitted to be redeemed, repaid or repurchased, the
redemption, repayment or repurchase price shall be the book value of such
Shares as reflected in the most recent financial statements of such Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental indenture is entered
into with respect thereto.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or any Vice President and by the Treasurer, chief
accounting officer, the Secretary or any Assistant Treasurer or Assistant
Secretary of the Company. Each such certificate shall include the statements
provided for in Section 13.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel for the Company (which counsel may be an employee of the Company), or
outside counsel for the
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8
Company. Each such opinion shall include the statements provided for
in Section 13.05, if applicable.
"Original Issue Discount Debt Security" means any Debt Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration or acceleration of the maturity thereof
pursuant to Section 6.01.
"Outstanding" when used with respect to any series of Debt
Securities, means, as of the date of determination, all Debt Securities of
that series theretofore authenticated and delivered under this Indenture,
except:
(i) Debt Securities of that series theretofore canceled by the
Trustee or delivered to the Trustee for cancelation;
(ii) Debt Securities of that series for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any paying agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as
its own paying agent) for the holders of such Debt Securities; provided,
that, if such Debt Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(iii) Debt Securities of that series which have been paid pursuant
to Section 2.09 or in exchange for or in lieu of which other Debt
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Debt Securities in respect of which there
shall have been presented to the Trustee proof satisfactory to it that
such Debt Securities are held by a bona fide purchaser in whose hands
such Debt Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities of any
series have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Debt Securities owned by the
Company or any other obligor upon the Debt Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Debt
Securities which the Trustee
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9
knows to be so owned shall be so disregarded. Debt Securities so owned
which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and
that the pledgee is not the Company or any other obligor upon the Debt
Securities or an Affiliate of the Company or of such other obligor. In
determining whether the Holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Debt Security that
shall be deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of
the maturity thereof pursuant to Section 6.01. In determining whether
the Holders of the requisite principal amount of the Outstanding Debt
Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the
principal amount of a Debt Security denominated in one or more Foreign
Currencies that shall be deemed to be Outstanding for such purposes
shall be the Dollar Equivalent, determined in the manner provided as
contemplated by Section 2.03 on the date of original issuance of such
Debt Security, of the principal amount (or, in the case of any
Original Issue Discount Security, the Dollar Equivalent on the date of
original issuance of such Security of the amount determined as
provided in the preceding sentence above) of such Debt Security.
"Person" means any individual, corporation, partnership,
joint venture, association, limited liability company, joint stock
company, trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"Place of Payment" means, when used with respect to the Debt
Securities of any series, the place or places where the principal of,
and premium, if any, and interest on, the Debt Securities of that
series are payable as specified pursuant to Section 2.03.
"Preferred Shares" as applied to the Capital of any
corporation, means Capital of any class or classes (however
designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of Capital
of any other class of such corporation.
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10
"Redeemable Shares" means, with respect to any Person, any
Capital which by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable) or upon the
happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is
convertible or exchangeable for Indebtedness (other than Preferred
Shares) or Disqualified Shares or (iii) is redeemable at the option of
the holder thereof, in whole or in part.
"Registered Holder" means the Person in whose name a
Registered Security is registered in the Debt Security Register (as
defined in Section 2.07(a)).
"Registered Security" means any Debt Security registered as
to principal and interest in the Debt Security Register (as defined in
Section 2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
"Representative" means the trustee, agent or representative
(if any) for an issue of Indebtedness.
"responsible officer" when used with respect to the Trustee,
means any officer within the corporate trust department of the
Trustee, including any Vice President, any Assistant Vice President,
any Assistant Treasurer, any trust officer, any assistant trust
officer or any other officer of the Trustee performing functions
similar to those performed by the persons who at the time shall be
such officers, and any other officer of the Trustee to whom corporate
trust matters are referred because of his knowledge of and familiarity
with the particular subject.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities Act" means the Securities Act of 1933.
"Senior Indebtedness" means, as to any series of Debt
Securities subordinated pursuant to the provisions of Article XII, the
Indebtedness of the Company identified as Senior Indebtedness in the
resolution of the Board of Directors and accompanying Officers'
Certificate or supplemental indenture setting forth the terms,
including as to subordination, of such series.
"Significant Subsidiary" means any Subsidiary that would be
a "Significant Subsidiary" of the Company within
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11
the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment
of principal of such security is due and payable, including pursuant
to any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency beyond the
control of the issuer unless such contingency has occurred).
"Subsidiary" of any Person means any corporation,
association, partnership or other business entity of which more than
50% of the total voting power of the share Capital entitled (without
regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Trade Payables" means, with respect to any Person, any
accounts payable or any Indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person arising in the
ordinary course of business of such Person in connection with the
acquisition of goods or services.
"Trustee" initially means [ ] and any other Person or
Persons appointed as such from time to time pursuant to Section 7.08,
and, subject to the provisions of Article VII, includes its or their
successors and assigns. If at any time there is more than one such
Person, "Trustee" as used with respect to the Debt Securities of any
series shall mean the Trustee with respect to the Debt Securities of
that series.
"Trust Indenture Act" (except as herein otherwise expressly
provided) means the Trust Indenture Act of 1939 as in force at the
date of this indenture as originally executed and, to the extent
required by law, as amended.
"United States" means the United States of America
(including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
"U.S. Government Obligations" means securities that are (x)
direct obligations of the United States for the
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12
payment of which its full faith and credit is pledged or (y)
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.
"Yield to Maturity" means the yield to maturity calculated
at the time of issuance of a series of Debt Securities, or, if
applicable, at the most recent redetermination of interest on such
series and calculated in accordance with accepted financial practice.
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the
Trust Indenture Act which are incorporated by reference in and made a
part of this indenture. The following Trust Indenture Act terms have
the following meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture
that are defined by the Trust indenture Act, reference to another
statute or defined by rules of the Securities and Exchange Commission
have the meanings assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
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13
(5) words in the singular include the plural and words in
the plural include the singular;
(6) if the applicable series of Debt Securities are
subordinated pursuant to Article XII, unsecured indebtedness
shall not be deemed to be subordinate or junior to Secured
Indebtedness merely by virtue of its nature as unsecured
indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Shares shall be
the greater of (i) the maximum liquidation value of such
Preferred Shares and (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Shares.
ARTICLE II
Debt Securities
SECTION 2.01. Forms Generally. The Debt Securities of each
series shall be in substantially the form established without the
approval of any Holder by or pursuant to a resolution of the Board of
Directors or in one or more Indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and
may have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as the Company may deem
appropriate (and, if not contained in a supplemental indenture entered
into in accordance with Article IX, as are not prohibited by the
provisions of this Indenture) or as may be required or appropriate to
comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange on which such series of Debt
Securities may be listed, or to conform to general usage, or as may,
consistently herewith, be determined by the officers executing such
Debt Securities as evidenced by their execution of the Debt
Securities.
The definitive Debt Securities of each series shall be
printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as
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14
determined by the officers executing such Debt Securities, as
evidenced by their execution of such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of
Authentication. The Trustee's Certificate of Authentication on all
Debt Securities authenticated by the Trustee shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
___________________________,
As Trustee
By_________________________
Authorized Signature
SECTION 2.03. Principal Amount; Issuable in Series. The
aggregate principal amount of Debt Securities which may be issued,
executed, authenticated, delivered and outstanding under this
Indenture is unlimited.
The Debt Securities may be issued in one or more series,
provided, however, that any Debt Securities issued with original issue
discount for federal income tax purposes shall not be issued as part
of the same series of any Debt Securities that are issued with a
different amount of original issue discount or are not issued with
original issue discount. There shall be established, without the
approval of any Holders, in or pursuant to a resolution of the Board
of Directors and set forth in an Officers' Certificate, or established
in one or more Indentures supplemental hereto, prior to the issuance
of Debt Securities of any series any or all of the following:
(1) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of the series from all
other Debt Securities);
(2) any limit upon the aggregate principal amount of the
Debt Securities of the series which may be authenticated and
delivered under this Indenture (except for Debt Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Debt Securities of the
series pursuant to this Article II);
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15
(3) the date or dates on which the principal and premium, if
any, of the Debt Securities of the series are payable;
(4) the rate or rates (which may be fixed or variable) at
which the Debt Securities of the series shall bear interest, if
any, or the method of determining such rate or rates, the date or
dates from which such interest shall accrue, the interest payment
dates on which such interest shall be payable, or the method by
which such date will be determined, in the case of Registered
Securities, the record dates for the determination of Holders
thereof to whom such interest is payable; and the basis upon
which interest will be calculated if other than that of a 360-
day year of twelve thirty-day months;
(5) the Place or Places of Payment, if any, in addition to
or instead of the corporate trust office of the Trustee where the
principal of, and interest on, Debt Securities of the series
shall be payable;
(6) the price or prices at which, the period or periods
within which and the terms and conditions upon which Debt
Securities of the series may be redeemed, in whole or in part, at
the option of the Company or otherwise;
(7) the obligation, if any, of the Company to redeem,
purchase or repay Debt Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a Holder
thereof, and the price or prices at which and the period or
periods within which and the terms and conditions upon which Debt
Securities of the series shall be redeemed, purchased or repaid,
in whole or in part, pursuant to such obligations;
(8) the terms, if any, upon which the Debt Securities of the
series may be convertible into or exchanged for Common Shares,
Preferred Shares (which may be represented by depositary shares),
other Debt Securities or warrants for Common Shares, Preferred
Shares or Indebtedness or other securities of any kind of the
Company or any other obligor or issuer and the terms and
conditions upon which such conversion or exchange shall be
effected, including the initial conversion or exchange price or
rate, the conversion or exchange period and any other provision
in addition to or in lieu of those described herein;
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16
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of
the series shall be issuable;
(10) if the amount of principal of or any premium or
interest on Debt Securities of the series may be determined with
reference to an index or pursuant to a formula, the manner in
which such amounts will be determined;
(11) if the principal amount payable at the Stated Maturity
of Debt Securities of the series will not be determinable as of
any one or more dates prior to such Stated Maturity, the amount
which will be deemed to be such principal amount as of any such
date for any purpose, including the principal amount thereof
which will be due and payable upon any maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of
any such date (or, in any such case, the manner in which such
deemed principal amount is to be determined); and the manner of
determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of Dollar
Equivalent;
(12) any changes or additions to Article XI, including the
addition of additional covenants that may be subject to the
covenant defeasance option pursuant to Section 11.02(b)(ii);
(13) if other than such coin or Currency of the United
States as at the time of payment is legal tender for payment of
public and private debts, the coin or Currency or Currencies or
units of two or more Currencies in which payment of the principal
of and premium, if any, and interest on, Debt Securities of the
series shall be payable;
(14) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of the series which
shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01 or provable in bankruptcy
pursuant to Section 6.02;
(15) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the Debt Securities of the series of any
properties, assets, moneys, proceeds, securities or other collateral,
including whether certain provisions of the Trust Indenture Act are
applicable and any corresponding
<PAGE>
17
changes to provisions of this Indenture as currently in effect;
(16) any addition to or change in the Events of Default with
respect to the Debt Securities of the series and any change in
the right of the Trustee or the Holders to declare the principal
of and interest on, such Debt Securities due and payable;
(17) if the Debt Securities of the series shall be issued in
whole or in part in the form of a Global Security or Securities,
the terms and conditions, if any, upon which such Global Security
or Securities may be exchanged in whole or in part for other
individual Debt Securities in definitive registered form; and the
Depositary for such Global Security or Securities and the form of
any legend or legends to be borne by any such Global Security or
Securities in addition to or in lieu of the legend referred to in
Section 2.15;
(18) any trustees, authenticating or paying agents, transfer
agents or registrars;
(19) the applicability of, and any addition to or change in
the covenants and definitions currently set forth in this
Indenture or in the terms currently set forth in Article X;
(20) the terms, if any, of any Guarantee of the payment of
principal of, and premium, if any, and interest on, Debt
Securities of the series and any corresponding changes to the
provisions of this Indenture as currently in effect;
(21) the subordination, if any, of the Debt Securities of
the series pursuant to Article XII and any changes or additions
to Article XII;
(22) with regard to Debt Securities of the series that do
not bear interest, the dates for certain required reports to the
Trustee; and
(23) any other terms of the Debt Securities of the series
(which terms shall not be prohibited by the provisions of this
Indenture).
All Debt Securities of any one series appertaining thereto shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to such resolution of the Board of Directors and as
<PAGE>
18
set forth in such Officers' Certificate or in any such Indenture
supplemental hereto.
SECTION 2.04. Execution of Debt Securities. The Debt
Securities shall be signed on behalf of the Company by its Chairman of
the Board, its President or a Vice President and by its Secretary, an
Assistant Secretary, a Treasurer or an Assistant Treasurer. Such
signatures upon the Debt Securities may be the manual or facsimile
signatures of the present or any future such authorized officers and
may be imprinted or otherwise reproduced on the Debt Securities. The
seal of the Company, if any, may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on
the Debt Securities.
Only such Debt Securities as shall bear thereon a
certificate of authentication substantially in the form hereinbefore
recited, signed manually by the Trustee, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee upon any Debt Security executed by the
Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any
of the Debt Securities shall cease to be such officer before the Debt
Securities so signed shall have been authenticated and delivered by
the Trustee, or disposed of by the Company, such Debt Securities
nevertheless may be authenticated and delivered or disposed of as
though the Person who signed such Debt Securities had not ceased to be
such officer of the Company; and any Debt Security may be signed on
behalf of the Company by such Persons as, at the actual date of the
execution of such Debt Security, shall be the proper officers of the
Company, although at the date of such Debt Security or of the
execution of this Indenture any such Person was not such officer.
SECTION 2.05. Authentication and Delivery of Debt
Securities. At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debt Securities of
any series executed by the Company to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Debt
Securities to or upon a Company Order. In authenticating such Debt
Securities and accepting the additional
<PAGE>
19
responsibilities under this Indenture in relation to such Debt
Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.01.) shall be fully protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of
Directors, certified by the Secretary or Assistant Secretary of
the Company, authorizing the terms of issuance of any series of
Debt Securities;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate; and
(4) an Opinion of Counsel prepared in accordance with
Section 13.05 which shall also state:
(a) that the form of such Debt Securities has been
established by or pursuant to a resolution of the Board of
Directors or by a supplemental indenture as permitted by
Section 2.01 in conformity with the provisions of this
Indenture;
(b) that the terms of such Debt Securities have been
established by or pursuant to a resolution of the Board of
Directors or by a supplemental indenture as permitted by
Section 2.03 in conformity with the provisions of this
Indenture;
(c) that such Debt Securities, when authenticated and
delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such
opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable in
accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights
generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability;
(d) that the Company has the corporate power to issue
such Debt Securities and has duly taken all necessary
corporate action with respect to such issuance;
(e) that the issuance of such Debt Securities will not
contravene the charter or by-laws of the
<PAGE>
20
Company or result in any material violation of any of the
terms or provisions of any law or regulation or of any
indenture, mortgage or other agreement known to such counsel
by which the Company is bound;
(f) that authentication and delivery of such Debt
Securities and the execution and delivery of any
supplemental indenture will not violate the terms of this
Indenture; and
(g) such other matters as the Trustee may reasonably
request.
Such Opinion of Counsel need express no opinion as to
whether a court in the United States would render a money judgment in
a currency other than that of the United States.
The Trustee shall have the right to decline to authenticate
and deliver any Debt Securities under this Section 2.05 if the
Trustee, being advised by counsel, determines that such action may not
lawfully be taken or if the Trustee in good faith by its board of
directors or trustees, executive committee or a trust committee of
directors, trustees or vice presidents shall determine that such
action would expose the Trustee to personal liability to existing
Holders.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Debt Securities of any
series. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Debt Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, paying
agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for
any series, each Debt Security shall be dated the date of its
authentication.
SECTION 2.06. Denomination of Debt Securities. Unless
otherwise provided in the form of Debt Security for any series, the
Debt Securities of each series shall be issuable only as Registered
Securities in such denominations as shall be specified or contemplated
by Section 2.03. In the absence of any such specification with respect
to the Debt Securities of any series, the Debt Securities of such
series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
<PAGE>
21
SECTION 2.07. Registration of Transfer and Exchange. (a) The
Company shall keep or cause to be kept a register for each series of
Registered Securities issued hereunder (hereinafter collectively
referred to as the "Debt Security Register"), in which, subject to
such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and the transfer
of Registered Securities as in this Article II provided. At all
reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due
presentment for registration of transfer of any Registered Security at
any office or agency to be maintained by the Company in accordance
with the provisions of Section 4.02, the Company shall execute and the
Trustee shall authenticate and deliver in the name of the transferee
or transferees a new Registered Security or Registered Securities of
authorized denominations for a like aggregate principal amount.
Unless and until otherwise determined by the Company by
resolution of the Board of Directors, the register of the Company for
the purpose of registration, exchange or registration of transfer of
the Registered Securities shall be kept at the corporate trust office
of the Trustee and, for this purpose, the Trustee shall be designated
"Registrar".
Registered Securities of any series (other than a Global
Security) may be exchanged for a like aggregate principal amount of
Registered Securities of the same series of other authorized
denominations. Subject to Section 2.15, Registered Securities to be
exchanged shall be surrendered at the office or agency to be
maintained by the Company as provided in Section 4.02, and the Company
shall execute and the Trustee shall authenticate and deliver in
exchange therefor the Registered Security or Registered Securities
which the Holder making the exchange shall be entitled to receive.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by
the Company, the Trustee or the Registrar) be duly endorsed or be
accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Company, the Trustee and the Registrar, duly
executed by the Registered Holder or his attorney duly authorized in
writing.
All Debt Securities issued in exchange for or upon transfer
of Debt Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to
<PAGE>
22
the same benefits under this Indenture as the Debt Securities
surrendered for such exchange or transfer.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities (except as provided by
Section 2.09), but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto, other than those expressly provided in this
Indenture to be made at the Company's own expense or without expense
or without charge to the Holders.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Debt Securities for a period of 15 days
next preceding any mailing of notice of redemption of Debt Securities
of such series or (b) to register the transfer of or exchange any Debt
Securities selected, called or being called for redemption.
Prior to the due presentation for registration of transfer
of any Debt Security, the Company, the Trustee, any paying agent or
any Registrar may deem and treat the Person in whose name a Debt
Security is registered as the absolute owner of such Debt Security for
the purpose of receiving payment of principal of, and premium, if any,
and interest on, such Debt Security and for all other purposes
whatsoever, whether or not such Debt Security is overdue, and none of
the Company, the Trustee, any paying agent or Registrar shall be
affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee,
any paying agent or any Registrar will have any responsibility or
liability for any aspect of the records relating to, or payments made
on account of, beneficial ownership interests of a Global Security or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 2.08. Temporary Debt Securities. Pending the
preparation of definitive Debt Securities of any series, the Company
may execute and the Trustee shall authenticate and deliver temporary
Debt Securities (printed, lithographed, photocopied, typewritten or
otherwise produced) of any authorized denomination, and substantially
in the form of the definitive Debt Securities in lieu of which they
are issued, in registered form and with such omissions, insertions and
variations as may be appropriate for temporary Debt Securities, all as
may be determined by the Company with the concurrence of the Trustee.
Temporary Debt Securities may contain such reference to any provisions
of this Indenture as may be appropriate. Every temporary
<PAGE>
23
Debt Security shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same
manner, and with like effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the
Company will cause definitive Debt Securities of such series to be
prepared without unreasonable delay. After the preparation of
definitive Debt Securities of such series, the temporary Debt
Securities of such series shall be exchangeable for definitive Debt
Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Company at a
Place of Payment for such series, without charge to the Holder
thereof, except as provided in Section 2.07 in connection with a
transfer, and upon surrender for cancelation of any one or more
temporary Debt Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Debt Securities of the same series of
authorized denominations and of like tenor. Until so exchanged,
temporary Debt Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Debt
Securities of such series, except as otherwise specified as
contemplated by Section 2.03(17) with respect to the payment of
interest on Global Securities in temporary form.
Upon any exchange of a portion of a temporary Global
Security for a definitive Global Security or for the individual Debt
Securities represented thereby pursuant to Section 2.07 or this
Section 2.08, the temporary Global Security shall be endorsed by the
Trustee to reflect the reduction of the principal amount evidenced
thereby, whereupon the principal amount of such temporary Global
Security shall be reduced for all purposes by the amount so exchanged
and endorsed.
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Debt
Securities. If (i) any mutilated Debt Security is surrendered to the
Trustee at its corporate trust office (in the case of Registered
Securities) or (ii) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Debt
Security, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them
and any paying agent harmless, and neither the Company nor the Trustee
receives notice that such Debt Security has been acquired by a bona
fide purchaser, then the Company shall execute and, upon a Company
Order, the Trustee shall authenticate and deliver, in exchange for or
<PAGE>
24
in lieu of any such mutilated, destroyed, lost or stolen Debt
Security, a new Debt Security of the same series of like tenor, form,
terms and principal amount, bearing a number not contemporaneously
Outstanding. Upon the issuance of any substituted Debt Security, the
Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debt Security
which has matured or is about to mature or which has been called for
redemption shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substituted Debt Security, pay or
authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) if the applicant for such
payment shall furnish the Company and the Trustee with such security
or indemnity as either may require to save it harmless from all risk,
however remote, and, in case of destruction, loss or theft, evidence
to the satisfaction of the Company and the Trustee of the destruction,
loss or theft of such Debt Security and of the ownership thereof.
Every substituted Debt Security of any series issued
pursuant to the provisions of this Section 2.09 by virtue of the fact
that any Debt Security is destroyed, lost or stolen shall constitute
an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debt Security shall be found at
any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities of
that series duly issued hereunder. All Debt Securities shall be held
and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debt Securities, and shall preclude any and
all other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities
without their surrender.
SECTION 2.10. Cancelation of Surrendered Debt Securities.
All Debt Securities surrendered for payment, redemption, registration
of transfer or exchange shall, if surrendered to the Company or any
paying agent or a Registrar, be delivered to the Trustee for
cancelation by it, or if surrendered to the Trustee, shall be canceled
by it, and no Debt Securities shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Indenture. All
canceled Debt Securities held by the Trustee shall be disposed of by
the Trustee in accordance with its procedures for the disposition of
canceled
<PAGE>
25
securities in effect as of the date of such disposition (subject to
the record retention requirements of the Exchange Act) and
certification of their disposition shall be delivered to the Company.
On request of the Company, the Trustee shall deliver to the Company
canceled Debt Securities held by the Trustee. If the Company shall
acquire any of the Debt Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness
represented thereby unless and until the same are delivered or
surrendered to the Trustee for cancelation. The Company may not issue
new Debt Securities to replace Debt Securities it has redeemed, paid
or delivered to the Trustee for cancelation.
SECTION 2.11. Provisions of the Indenture and Debt
Securities for the Sole Benefit of the Parties and the Holders.
Nothing in this Indenture or in the Debt Securities, expressed or
implied, shall give or be construed to give to any Person, other than
the parties hereto, the Holders or any Registrar or paying agent, any
legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein
contained, all its covenants, conditions and provisions being for the
sole benefit of the parties hereto, the Holders and any Registrar and
paying agents.
SECTION 2.12. Payment of Interest; Rights Preserved. (a)
Interest on any Registered Security that is payable and is punctually
paid or duly provided for on any interest payment date shall be paid
to the Person in whose name such Registered Security is registered at
the close of business on the regular record date for such interest
notwithstanding the cancelation of such Registered Security upon any
transfer or exchange subsequent to the regular record date. Payment of
interest on Registered Securities shall be made at the corporate trust
office of the Trustee (except as otherwise specified pursuant to
Section 2.03), or at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address shall appear in
the Debt Security Register or, if provided pursuant to Section 2.03
and in accordance with arrangements satisfactory to the Trustee, at
the option of the Registered Holder by wire transfer to an account
designated by the Registered Holder.
(b) Subject to the foregoing provisions of this Section 2.12
and Section 2.17, each Debt Security of a particular series delivered
under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security of the same series shall
carry the
<PAGE>
26
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Debt Security.
SECTION 2.13. Securities Denominated in Foreign Currencies.
(a) Except as otherwise specified pursuant to Section 2.03 for
Registered Securities of any series, payment of the principal of, and
premium, if any, and interest on, Registered Securities of such series
will be made in Dollars.
(b) For the purposes of calculating the principal amount of
Debt Securities of any series denominated in a Foreign Currency or in
units of two or more Foreign Currencies for any purpose under this
Indenture, the principal amount of such Debt Securities at any time
Outstanding shall be deemed to be the Dollar Equivalent of such
principal amount as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of
two or more Currencies in which any payment with respect to any series
of Debt Securities may be made ceases to be a freely convertible
Currency on United States Currency markets, for any date thereafter on
which payment of principal of, or premium, if any, or interest on, the
Debt Securities of a series is due, the Company shall select the
Currency of payment for use on such date, all as provided in the Debt
Securities of such series. In such event, the Company shall, as
provided in the Debt Securities of such series, notify the Trustee of
the Currency which it has selected to constitute the funds necessary
to meet the Company's obligations or such payment date and of the
amount of such Currency to be paid. Such amount shall be determined as
provided in the Debt Securities of such series. The payment to the
Trustee with respect to such payment date shall be made by the Company
solely in the Currency so selected.
SECTION 2.14. Wire Transfers. Notwithstanding any other
provision to the contrary in this Indenture, the Company may make any
payment of monies required to be deposited with the Trustee on account
of principal of, or premium, if any, or interest on, the Debt
Securities (whether pursuant to optional or mandatory redemption
payments, interest payments or otherwise) by wire transfer of
immediately available funds to an account designated by the Trustee on
or before the date such moneys are to be paid to the Holders of the
Debt Securities in accordance with the terms hereof.
<PAGE>
27
SECTION 2.15. Securities Issuable in the Form of a Global
Security. (a) If the Company shall establish pursuant to Sections 2.01
and 2.03 that the Debt Securities of a particular series are to be
issued in whole or in part in the form of one or more Global
Securities, then the Company shall execute and the Trustee or its
agent shall, in accordance with Section 2.05, authenticate and
deliver, such Global Security or Securities, which (i) shall
represent, and shall be denominated in an amount equal to the
aggregate principal amount of, the Outstanding Debt Securities of such
series to be represented by such Global Security or Securities, or
such portion thereof as the Company shall specify in an Officers'
Certificate, (ii) shall be registered in the name of the Depositary
for such Global Security or securities or its nominee, (iii) shall be
delivered by the Trustee or its agent to the Depositary or pursuant to
the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is
exchanged in whole or in part for the individual Debt Securities
represented hereby, this Global Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary", or such other
legend as may then be required by the Depositary for such Global
Security or Securities.
(b) Notwithstanding any other provision of this Section 2.15
or of Section 2.07 to the contrary, and subject to the provisions of
paragraph (c) below, unless the terms of a Global Security expressly
permit such Global Security to be exchanged in whole or in part for
definitive Debt Securities in registered form, a Global Security may
be transferred, in whole but not in part and in the manner provided in
Section 2.07, only by the Depositary to a nominee of the Depositary
for such Global Security, or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary, or by the Depositary
or a nominee of the Depositary to a successor Depositary for such
Global Security selected or approved by the Company, or to a nominee
of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security
or Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or Securities or if at
any time the Depositary for the Debt Securities for such series shall
no longer be eligible or in good standing under the Exchange Act or
other applicable statute, rule or regulation, the Company shall
appoint a successor Depositary with respect to
<PAGE>
28
such Global Security or Securities. If a successor Depositary for such
Global Security or Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company shall execute, and the Trustee or its
agent, upon receipt of a Company order for the authentication and
delivery of such individual Debt Securities of such series in exchange
for such Global Security, will authenticate and deliver, individual
Debt Securities of such series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of
the Global Security in exchange for such Global Security or
securities.
(ii) The Company may at any time and in its sole discretion
determine that the Debt Securities of any series or portion thereof
issued or issuable in the form of one or more Global Securities shall
no longer be represented by such Global security or securities. In
such event the Company will execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of individual Debt
Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Debt
Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such
series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 2.01
and 2.03 with respect to Debt Securities issued or issuable in the
form of a Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for
individual Debt Securities of such series of like tenor and terms in
definitive form on such terms as are acceptable to the Company, the
Trustee and such Depositary. Thereupon the Company shall execute, and
the Trustee or its agent upon receipt of a Company Order for the
authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, (1) to
each Person specified by such Depositary a new Debt Security or
Securities of the same series of like tenor and terms and of any
authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security; and (2) to such Depositary a new
Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Debt Securities delivered to Holders thereof.
<PAGE>
29
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its
agent will authenticate and deliver individual Debt Securities. Upon
the exchange of the entire principal amount of a Global Security for
individual Debt Securities, such Global Security shall be canceled by
the Trustee or its agent. Except as provided in the preceding
paragraph, Registered Securities issued in exchange for a Global
Security pursuant to this Section 2.15 shall be registered in such
names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or the
Registrar. The Trustee or the Registrar shall deliver such Registered
Securities to the Persons in whose names such Registered Securities
are so registered.
(v) Payments in respect of the principal of and interest on
any Debt Securities registered in the name of the Depositary or its
nominee will be payable to the Depositary or such nominee in its
capacity as the registered owner of such Global Security. The Company
and the Trustee may treat the Person in whose name the Debt
Securities, including the Global Security, are registered as the owner
thereof for the purpose of receiving such payments and for any and all
other purposes whatsoever. None of the Company, the Trustee, any
Registrar, the paying agent or any agent of the Company or the Trustee
will have any responsibility or liability for (a) any aspect of the
records relating to or payments made on account of the beneficial
ownership interests of the Global Security by the Depositary or its
nominee or any of the Depositary's direct or indirect participants, or
for maintaining, supervising or reviewing any records of the
Depositary, its nominee or any of its direct or indirect participants
relating to the beneficial ownership interests of the Global Security,
(b) the payments to the beneficial owners of the Global Security of
amounts paid to the Depositary or its nominee, or (c) any other matter
relating to the actions and practices of the Depositary, its nominee
or any of its direct or indirect participants. None of the Company,
the Trustee or any such agent will be liable for any delay by the
Depositary, its nominee, or any of its direct or indirect participants
in identifying the beneficial owners of the Debt Securities, and the
Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Depositary or its
nominee for all purposes (including with respect to the registration
and delivery, and the respective principal amounts, of the Debt
Securities to be issued).
<PAGE>
30
SECTION 2.16. Medium Term Securities. Notwithstanding any
contrary provision herein, if all Debt Securities of a series are not
to be originally issued at one time, it shall not be necessary for the
Company to deliver to the Trustee an Officers' Certificate,
resolutions of the Board of Directors, supplemental indenture, Opinion
of Counsel or written order or any other document otherwise required
pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or prior to the time
of authentication of each Debt Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security
of such series to be issued; provided, that any subsequent request by
the Company to the Trustee to authenticate Debt Securities of such
series upon original issuance shall constitute a representation and
warranty by the Company that, as of the date of such request, the
statements made in the Officers' Certificate delivered pursuant to
Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such
time of authentication of an original issuance of Debt Securities
shall specifically state that it shall relate to all subsequent
issuances of Debt Securities of such series that are identical to the
Debt Securities issued in the first issuance of Debt Securities of
such series.
A Company Order delivered by the Company to the Trustee in
the circumstances set forth in the preceding paragraph, may provide
that Debt Securities which are the subject thereof will be
authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of
Persons designated in such written order (any such telephonic
instructions to be promptly confirmed in writing by such Person) and
that such Persons are authorized to determine, consistent with the
Officers' Certificate, supplemental indenture or resolution of the
Board of Directors relating to such written order, such terms and
conditions of such Debt Securities as are specified in such Officers'
Certificate, supplemental indenture or such resolution.
SECTION 2.17. Defaulted Interest. If the Company defaults in a
payment of interest on the Debt Securities, it shall pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on
the defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Debt Securities pursuant
to Section 4.01 hereof. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Debt Security and the
date of the proposed payment. The Company shall fix
<PAGE>
31
or cause to be fixed each such special record date and payment date;
provided that, no such special record date shall be less than 10 days
prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company (or, upon
the written request of the Company delivered to the Trustee at least
five Business Days prior to the date notice is to be mailed, the
Trustee in the name and at the expense of the Company) shall mail or
cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be
paid.
SECTION 2.18. Judgments. The Company may provide pursuant to
Section 2.03 for Debt Securities of any series that (a) the
obligation, if any, of the Company to pay the principal of, and
premium, if any, and interest on, the Debt Securities of any series in
a Foreign Currency or Dollars (the "Designated Currency") as may be
specified pursuant to Section 2.03 is of the essence and agrees that,
to the fullest extent possible under applicable law, judgments in
respect of Debt Securities of such series shall be given in the
Designated Currency; (b) the obligation of the Company to make
payments in the Designated Currency of the principal of, and premium,
if any, and interest on, such Debt Securities shall, notwithstanding
any payment in any other Currency (whether pursuant to a judgment or
otherwise), be discharged only to the extent of the amount in the
Designated Currency that the Holder receiving such payment may, in
accordance with normal banking procedures, purchase with the sum paid
in such other Currency (after any premium and cost exchange) on the
business day in the country of issue of the Designated Currency or in
the international banking community (in the case of a composite
currency) immediately following the day on which such Holder receives
such payment; (c) if the amount in the Designated Currency that may be
so purchased for any reason falls short of the amount originally due,
the Company shall pay such additional amounts as may be necessary to
compensate for such shortfall; and (d) any obligation of the Company
not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall
continue in full force and effect.
SECTION 2.19. CUSIP Numbers. The Company in issuing the Debt
Securities may use "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as
a convenience to Holders; provided that any such notice may state that
no representation is made as to the correctness of such numbers either
as printed on the Debt Securities or as contained in any notice of a
redemption and that reliance may be placed
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only on the other identification numbers printed on the Debt
Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly
notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
Redemption of Debt Securities
SECTION 3.01. Applicability of Article. The provisions of
this Article shall be applicable to the Debt Securities of any series
which are redeemable before their Stated Maturity except as otherwise
specified as contemplated by Section 2.03 for Debt Securities of such
series.
SECTION 3.02. Notice of Redemption; Selection of Debt
Securities. In case the Company shall desire to exercise the right to
redeem all or, as the case may be, any part of the Debt Securities of
any series in accordance with their terms, a resolution of the Board
of Directors of the Company or a supplemental indenture, the Company
shall fix a date for redemption and shall give notice of such
redemption at least 30 and not more than 60 days prior to the date
fixed for redemption to the Holders of Debt Securities of such series
so to be redeemed as a whole or in part, in the manner provided in
Section 13.03. The notice if given in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the
Holder receives such notice. In any case, failure to give such notice
or any defect in the notice to the Holder of any Debt Security of a
series designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other
Debt Security of such series.
Each such notice of redemption shall specify the CUSIP
number, if any, the date fixed for redemption, the redemption price at
which Debt Securities of such series are to be redeemed, the Place or
Places of Payment that payment will be made upon presentation and
surrender of such Debt Securities, that any interest accrued to the
date fixed for redemption will be paid as specified in said notice,
that the redemption is for a sinking fund payment (if applicable),
that, if the Company defaults on making such redemption payment or if
the Debt Securities of that series are subordinated pursuant to the
terms of Article XII the paying agent is prohibited from making such
payment pursuant to the terms of this Indenture, that on and after
said date any interest thereon or on the portions thereof to be
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33
redeemed will cease to accrue, that in the case of Original Issue
Discount Securities original issue discount accrued after the date
fixed for redemption will cease to accrue, the terms of the Debt
Securities of that series pursuant to which the Debt Securities of
that series are being redeemed and that no representation is made as
to the correctness or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Debt Securities of that series. If less
than all the Debt Securities of a series are to be redeemed the notice
of redemption shall specify the CUSIP numbers of the Debt Securities
of that series to be redeemed. In case any Debt Security of a series
is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender
of such Debt Security, a new Debt Security or Debt Securities of that
series in principal amount equal to the unredeemed portion thereof.
At least 60 days before the redemption date unless the
Trustee consents to a shorter period, the Company shall give notice to
the Trustee of the redemption date, the principal amount of Debt
Securities to be redeemed and the series and terms of the Debt
Securities pursuant to which such redemption will occur. Such notice
shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Debt
Securities of a series are to be redeemed, the record date relating to
such redemption shall be selected by the Company and given to the
Trustee, which record date shall be not less than 15 days after the
date of notice to the Trustee.
On or prior to the redemption date for any Registered
Securities, the Company shall deposit with the Trustee or with a
paying agent (or, if the Company is acting as its own paying agent,
segregate and hold in trust) an amount of money in the Currency in
which such Debt Securities are denominated (except as provided
pursuant to Section 2.03) sufficient to pay the redemption price of
such Registered Securities or any portions thereof that are to be
redeemed on that date.
If less than all the Debt Securities of like tenor and terms
of a series are to be redeemed (other than pursuant to mandatory
sinking fund redemptions) the Trustee shall select, in such manner as
in its sole discretion it shall deem appropriate and fair, the Debt
Securities of that series or portions thereof (in multiples of $1,000)
to be redeemed. In any case where more than one Registered
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34
Security of such series is registered in the same name, the Trustee in
its discretion may treat the aggregate principal amount so registered
as if it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt
Securities selected for partial redemption, the principal amount
thereof to be redeemed. If any Debt Security called for redemption
shall not be so paid upon surrender thereof on such redemption date,
the principal, premium, if any, and interest shall bear interest until
paid from the redemption date at the rate borne by the Debt Securities
of that series. If less than all the Debt Securities of unlike tenor
and terms of a series are to be redeemed, the particular Debt
Securities to be redeemed shall be selected by the Company. Provisions
of this Indenture that apply to Debt Securities called for redemption
also apply to portions of Debt Securities called for redemption.
SECTION 3.03. Payment of Debt Securities Called for
Redemption. If notice of redemption has been given as provided in
Section 3.02, the Debt Securities or portions of Debt Securities of
the series with respect to which such notice has been given shall
become due and payable on the date and at the Place or Places of
Payment stated in such notice at the applicable redemption price,
together with any interest accrued to the date fixed for redemption,
and on and after said date (unless the Company shall default in the
payment of such Debt Securities at the applicable redemption price,
together with any interest accrued to said date) any interest on the
Debt Securities or portions of Debt Securities of any series so called
for redemption shall cease to accrue and any original issue discount
in the case of Original Issue Discount Securities shall cease to
accrue. On presentation and surrender of such Debt Securities at the
Place or Places of Payment in said notice specified, the said Debt
Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together
with any interest accrued thereon to the date fixed for redemption.
Any Debt Security that is to be redeemed only in part shall
be surrendered at the corporate trust office or such other office or
agency of the Company as is specified pursuant to Section 2.03, if the
Company, the Registrar or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the
Company, the Registrar and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing, and the Company
shall execute, and the Trustee shall authenticate
<PAGE>
35
and deliver to the Holder of such Debt Security without service
charge, a new Debt Security or Debt Securities of the same series, of
like tenor and form, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Debt Security so
surrendered; except that if a Global Security is so surrendered, the
Company shall execute, and the Trustee shall authenticate and deliver
to the Depositary for such Global Security, without service charge, a
new Global Security in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Global Security so
surrendered. In the case of a Debt Security providing appropriate
space for such notation, at the option of the Holder thereof, the
Trustee, in lieu of delivering a new Debt Security or Debt Securities
as aforesaid, may make a notation on such Debt Security of the payment
of the redeemed portion thereof.
SECTION 3.04. Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms
of Debt Securities of any series, resolution of the Board of Directors
or a supplemental indenture is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Debt Securities of any series,
resolution of the Board of Directors or a supplemental indenture is
herein referred to as an "optional sinking fund payment".
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Debt Securities of a series in cash,
the Company may at its option (a) deliver to the Trustee Debt
Securities of that series theretofore purchased or otherwise acquired
by the Company or (b) receive credit for the principal amount of Debt
Securities of that series which have been redeemed either at the
election of the Company pursuant to the terms of such Debt Securities
or through the application of permitted optional sinking fund payments
pursuant to the terms of such Debt Securities, resolution or
supplemental indenture; provided, that such Debt Securities have not
been previously so credited. Such Debt Securities shall be received
and credited for such purpose by the Trustee at the redemption price
specified in such Debt Securities, resolution or supplemental
Indenture for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 3.05. Redemption of Debt Securities for Sinking
Fund. Not less than 60 days prior to each sinking
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36
fund payment date for any series of Debt Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the amount
of the next ensuing sinking fund payment for that series pursuant to
the terms of that series, any resolution or supplemental indenture,
the portion thereof, if any, which is to be satisfied by payment of
cash in the Currency in which the Debt Securities of such series are
denominated (except as provided pursuant to Section 2.03) and the
portion thereof, if any, which is to be satisfied by delivering and
crediting Debt Securities of that series pursuant to this Section 3.05
(which Debt Securities, if not previously redeemed, will accompany
such certificate) and whether the Company intends to exercise its
right to make any permitted optional sinking fund payment with respect
to such series. Such certificate shall also state that no Event of
Default has occurred and is continuing with respect to such series.
Such certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the next succeeding sinking
fund payment date. Failure of the Company to deliver such certificate
(or to deliver the Debt Securities specified in this paragraph) shall
not constitute a Default, but such failure shall require that the
sinking fund payment due on the next succeeding sinking fund payment
date for that series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of such Debt Securities
subject to a mandatory sinking fund payment without the option to
deliver or credit Debt Securities as provided in this Section 3.05 and
without the right to make any optional sinking fund payment, if any,
with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments
made in cash which shall equal or exceed $100,000 (or a lesser sum if
the Company shall so request) with respect to the Debt Securities of
any particular series shall be applied by the Trustee on the sinking
fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund
payment date following the date of such payment) to the redemption of
such Debt Securities at the redemption price specified in such Debt
Securities, resolution or supplemental indenture for operation of the
sinking fund together with any accrued interest to the date fixed for
redemption. Any sinking fund moneys not so applied or allocated by the
Trustee to the redemption of Debt Securities shall be added to the
next cash sinking fund payment received by the Trustee for such series
and, together with such payment, shall be applied in accordance
<PAGE>
37
with the provisions of this Section 3.05. Any and all sinking fund
moneys with respect to the Debt Securities of any particular series
held by the Trustee on the last sinking fund payment date with respect
to Debt Securities of such series and not held for the payment or
redemption of particular Debt Securities shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited
sufficient for the purpose, to the payment of the principal of the
Debt Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed
upon such sinking fund payment date in the manner specified in the
last paragraph of Section 3.02 and the Company shall cause notice of
the redemption thereof to be given in the manner provided in Section
3.02 except that the notice of redemption shall also state that the
Debt Securities are being redeemed by operation of the sinking fund.
Such notice having been duly given, the redemption of such Debt
Securities shall be made upon the terms and in the manner stated in
Section 3.03.
At least one business day before each sinking fund payment
date, the Company shall pay to the Trustee (or, if the Company is
acting as its own paying agent, the Company shall segregate and hold
in trust) in cash a sum in the Currency in which the Debt Securities
of such series are denominated (except as provided pursuant to Section
2.03) equal to any interest accrued to the date fixed for redemption
of Debt Securities or portions thereof to be redeemed on such sinking
fund payment date pursuant to this Section 3.05.
The Trustee shall not redeem any Debt Securities of a series
with sinking fund moneys or mail any notice of redemption of such Debt
Securities by operation of the sinking fund for such series during the
continuance of a Default in payment of interest on such Debt
Securities or of any Event of Default (other than an Event of Default
occurring as a consequence of this paragraph) with respect to such
Debt Securities, except that if the notice of redemption of any such
Debt Securities shall theretofore have been mailed in accordance with
the provisions hereof, the Trustee shall redeem such Debt Securities
if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article
III. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such Default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall,
during the continuance of such Default or Event of Default, be held as
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38
security for the payment of such Debt Securities; provided, however,
that in case such Event of Default or Default shall have been cured or
waived as provided herein, such moneys shall thereafter be applied on
the next sinking fund payment date for such Debt Securities on which
such moneys may be applied pursuant to the provisions of this Section
3.05.
ARTICLE IV
Particular Covenants of the Company
SECTION 4.01. Payment of Principal of, and Premium, if any,
and Interest on, Debt Securities. The Company, for the benefit of each
series of Debt Securities, will duly and punctually pay or cause to be
paid the principal of, and premium, if any, and interest on, each of
the Debt Securities at the place, at the respective times and in the
manner provided herein and in the Debt Securities. Each installment of
interest on the Debt Securities may at the Company's option be paid by
mailing checks for such interest payable to the Person entitled
thereto to the address of such Person as it appears on the Debt
Security Register maintained pursuant to Section 2.07(a).
Principal, premium and interest of Debt Securities of any
series shall be considered paid on the date due if on such date the
Trustee or any paying agent holds in accordance with this Indenture
money sufficient to pay in the Currency in which the Debt Securities
of such series are denominated (except as provided pursuant to Section
2.03) all principal, premium and interest then due and, in the case of
Debt Securities subordinated pursuant to the terms of Article XII, the
Trustee or such paying agent, as the case may be, is not prohibited
from paying such money to the Holders on that date pursuant to the
terms of the Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Debt Securities and it shall pay
interest on overdue installments of interest at the same rate to the
extent lawful.
SECTION 4.02. Maintenance of Offices or Agencies for
Registration of Transfer, Exchange and Payment of Debt Securities. The
Company will maintain in each Place of Payment for any series of Debt
Securities, an office or agency where Debt Securities of such series
may be presented or surrendered for payment, where Debt Securities of
such series may be surrendered for transfer or exchange and where
notices and demands to or upon the Company in respect of the
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39
Debt Securities of such series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If
at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be
made or served at the corporate trust office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate different
or additional offices or agencies to be maintained for such purposes
(in or outside of such Place of Payment), and may from time to time
rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of
its obligations described in the preceding paragraph. The Company will
give prompt written notice to the Trustee of any such additional
designation or rescission of designation and any change in the
Location of any such different or additional office or agency.
SECTION 4.03. Appointment to Fill a Vacancy in the Office of
Trustee. The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section
7.08, a Trustee, so that there shall at all times be a Trustee
hereunder with respect to each series of Debt Securities.
SECTION 4.04. Duties of Paying Agents, etc. (a) The Company
shall cause each paying agent, if any, other than the Trustee, to
execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this
Section 4.04,
(i) that it will hold all sums held by it as such agent for
the payment of the principal of, and premium, if any, or interest
on, the Debt Securities of any series (whether such sums have
been paid to it by the Company or by any other obligor on the
Debt Securities of such series) in trust for the benefit of the
Holders of the Debt Securities of such series;
(ii) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debt Securities of
such series) to make any payment of the principal of and premium,
if any, or interest on, the Debt Securities of such series when
the same shall be due and payable; and
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40
(iii) that it will at any time during the continuance of an
Event of Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held by it as such
agent.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of, and premium, if
any, or interest on, the Debt Securities if any, of any series, set
aside, segregate and hold in trust for the benefit of the Holders of
the Debt Securities of such series a sum sufficient to pay such
principal, premium, if any, or interest so becoming due. The Company
will promptly notify the Trustee of any failure by the Company to take
such action or the failure by any other obligor on such Debt
Securities to make any payment of the principal of, and premium, if
any, or interest on, such Debt Securities when the same shall be due
and payable.
(c) Anything in this Section 4.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for any
other reason, pay or cause to be paid to the Trustee all sums held in
trust by it or any paying agent, as required by this Section 4.04,
such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by the Company or such paying agent.
(d) Whenever the Company shall have one or more paying
agents with respect to any series of Debt Securities, it will, prior
to each due date of the principal of, and premium, if any, or interest
on, any Debt Securities of such series, deposit with any such paying
agent a sum sufficient to pay the principal, premium or interest so
becoming due, such sum to be held in trust for the benefit of the
Persons entitled thereto, and (unless any such paying agent is the
Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
(e) Anything in this Section 4.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in
this Section 4.04 is subject to the provisions of Section 11.05.
SECTION 4.05. Statement by Officers as to Default. The
Company will deliver to the Trustee, on or before a date not more than
120 days after the end of each fiscal year of the Company (currently
on a calendar year basis) ending after the date hereof, an Officers'
Certificate stating, as to each officer signing such certificate, that
(i) in the course of his performance of his duties as an officer of
the Company he would normally
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41
have knowledge of any Default, (ii) whether or not to the best of his
knowledge any Default occurred during such year and (iii) if to the
best of his knowledge the Company is in Default, specifying all such
Defaults and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section
314(a)(4) of the Trust Indenture Act.
SECTION 4.06. Further Instruments and Acts. The Company
will, upon request of the Trustee, execute and deliver such further
instruments and do such further acts as may reasonably be necessary or
proper to carry out more effectually the purposes of this Indenture.
SECTION 4.07. Existence. Subject to Article X, the Company
will do or cause to be done, all things necessary to preserve and keep
in full force and effect its existence and rights (charter and
statutory); provided, however, that the Company shall not be required
to preserve any such right or franchise if the Company shall determine
that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.08. Maintenance of Properties. The Company will
cause all properties used or useful in the conduct of its business or
the business of any Subsidiary to be maintained and kept in good
condition, repair and working order in all material respects and will
cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on by the
Company and its subsidiaries may be properly and advantageously
conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or a Subsidiary from discontinuing
the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, not materially
detrimental to the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and not disadvantageous in any
material respect to the Holders.
SECTION 4.09. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or
any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien
<PAGE>
42
upon the property of the Company or any Subsidiary, provided, however,
that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Debt
Securities.
SECTION 4.10. Payment of Additional Amounts. (a) All
payments made by the Company under or with respect to the Debt
Securities will be made free and clear of, and without withholding or
deduction for or on account of, any present or future tax, duty, levy,
impost, assessment or other governmental charge imposed or levied by
or on behalf of the Government of Canada or of any province or
territory thereof or by any authority or agency therein or thereof
having power to tax (hereinafter "Taxes"), unless the Company is
required to withhold or deduct Taxes by law or by the interpretation
or administration thereof by the relevant governmental authority or
agency. If the Company is so required to withhold or deduct any amount
for or on account of Taxes from any payment made under or with respect
to the Debt Securities, the Company will pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount
received by each Holder (including Additional Amounts) after such
withholding or deduction will not be less than the amount the Holder
would have received if such Taxes had not been withheld or deducted;
provided that no Additional Amounts will be payable with respect to a
payment made to a Holder (an "Excluded Holder") (i) with which the
Company does not deal at arm's length (within the meaning of the
Income Tax Act (Canada)) at the time of making such payment, or (ii)
which is subject to such Taxes by reason of its being connected with
Canada or any province or territory thereof otherwise than by the mere
acquisition, holding or disposition of Debt Securities or the receipt
of payments thereunder. The Company will also make such withholding or
deduction and remit the full amount deducted or withheld to the
relevant government authority in accordance with applicable law.
(b) The Company will furnish to the Holders, within 30 days
after the date the payment of any Taxes is due pursuant to applicable
law, certified copies of tax receipts evidencing such payment by the
Company. The Company will indemnify and hold harmless each Holder
(other than an Excluded Holder) and upon written request reimburse
each such Holder for the amount of (i) any Taxes so levied or imposed
and paid by such Holder as a result of payments made under or with
respect to the Debt Securities, (ii) any
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43
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, and (iii) any Taxes imposed with
respect to any reimbursement under (i) or (ii), but excluding any such
Taxes on such Holder's net income.
(c) At least 30 days prior to each date on which any payment
under or with respect to the Debt Securities is due and payable, if
the Company will be obligated to pay Additional Amounts with respect
to such payment, the Company will deliver to the Trustee an Officers'
Certificate stating the fact that such Additional Amounts will be
payable, the amounts by country so payable and will set forth such
other information necessary to enable the Trustee to pay such
Additional Amounts to Holders on the payment date. The Trustee may
rely conclusively on any such Officers' Certificate as to the matters
stated therein and may rely conclusively on the absence of any such
Officers' Certificate as evidence that no such Additional Amounts are
due. Whenever in this Indenture there is mentioned, in any context,
the payment of principal, premium, redemption price, interest or any
other amount payable under or with respect to any Debt Security, such
mention shall be deemed to include mention of the payment of
Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof.
ARTICLE V
Holders' Lists and Reports
by the Company And the Trustee
SECTION 5.01. Company to Furnish Trustee Information as to
Names and Addresses of Holders; Preservation of Information. The
Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee with respect to the Registered Securities of
each series:
(a) not more than 15 days after each record date with
respect to the payment of interest, if any, a list, in such form
as the Trustee may reasonably require, of the names and addresses
of the Registered Holders as of such record date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any
such request, a list as of a date not more than 15 days prior to
the time such list is furnished;
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44
provided, however, that so long as the Trustee shall be the Registrar,
such lists shall not be required to be furnished.
The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the Holders (1) contained in the most recent list furnished to it
as provided in this Section 5.01 or (2) received by it in the capacity
of paying agent or Registrar (if so acting) hereunder.
The Trustee may destroy any List furnished to it as provided
in this Section 5.01 upon receipt of a new List so furnished.
SECTION 5.02. Communications to Holders. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with
other Holders with respect to their rights under this Indenture or the
Debt Securities. The Company, the Trustee, the Registrar and anyone
else shall have the protection of Section 312(c) of the Trust
Indenture Act.
SECTION 5.03. Reports by Company. (a) The Company covenants
and agrees, and any obligor hereunder shall covenant and agree, to
file with the Trustee, within 15 days after the Company or such
obligor, as the case may be, is required to file the same with the
Securities and Exchange Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such
portions of any of the foregoing as said Commission may from time to
time by rules and regulations prescribe) which the Company or such
obligor, as the case may be, may be required to file with said
Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company or such obligor, as the case may be, is not
required to file information, documents or reports pursuant to either
of such Sections, then to file with the Trustee and said Commission
(to the extent the Commission accepts such filing), in accordance with
rules and regulations prescribed from time to time by said Commission,
such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange
Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees, and any obligor
hereunder shall covenant and agree, to file with the Trustee and the
Securities and Exchange Commission, in accordance with the rules and
regulations prescribed from
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45
time to time by said Commission, such additional information,
documents, and reports with respect to compliance by the Company or
such obligor, as the case may be, with the conditions and covenants
provided for in this Indenture as may be required from time to time by
such rules and regulations.
SECTION 5.04. Reports by Trustee. The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act
at the time and in the manner provided pursuant thereto.
Reports pursuant to this Section 5.04 shall be transmitted
by mail:
(1) to all Registered Holders, as the names and addresses of
such Holders appear in the Debt Security Register;
(2) except in the cases of reports under Section 313(b)(2)
of the Trust Indenture Act, to each holder of a Debt Security of
any series whose name and address appear in the information
preserved at the time by the Trustee in accordance with Section
5.02.
A copy of each report at the time of its mailing to Holders
shall be filed with the Securities and Exchange Commission and each
stock exchange (if any) on which the Debt Securities of any series are
listed. The Company agrees to notify promptly the Trustee whenever the
Debt Securities of any series become listed on any stock exchange and
of any delisting thereof.
SECTION 5.05. Record Dates for Action by Holders. If the
Company shall solicit from the Holders of Debt Securities of any
series any action (including the making of any demand or request, the
giving of any direction, notice, consent or waiver or the taking of
any other action), the Company may, at its option, by resolution of
the Board of Directors, fix in advance a record date for the
determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such
record date shall be fixed at the Company's discretion. If such a
record date is fixed, such action may be sought or given before or
after the record date, but only the Holders of Debt Securities of
record at the close of business on such record date shall be deemed to
be Holders of Debt Securities for the purpose of determining whether
Holders of the requisite proportion of Debt Securities of such series
Outstanding have authorized or agreed or
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46
consented to such action, and for that purpose the Debt Securities of
such series Outstanding shall be computed as of such record date.
ARTICLE VI
Remedies of the Trustee and Holders in Event of Default
SECTION 6.01. Events of Default. If any one or more of the
following shall have occurred and be continuing with respect to Debt
Securities of any series (each of the following, an "Event of
Default"):
(a) Default in the payment of any installment of interest
upon any Debt Securities of that series as and when the same
shall become due and payable, whether or not such payment shall
be prohibited by Article XII, if applicable, and continuance of
such default for a period of 30 days; or
(b) default in the payment of the principal of or premium,
if any, on any Debt Securities of that series as and when the
same shall become due and payable, whether at maturity, upon
redemption, by declaration, upon required repurchase or
otherwise, whether or not such payment shall be prohibited by
Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with
respect to any Debt Securities of that series as and when the
same shall become due and payable; or
(d) failure on the part of the Company to comply for 30
days, after notice to the Company by the Trustee or the Holders
of at least 25% aggregate principal amount at maturity of the
Debt Securities then outstanding voting as a single class, with
any provision of Article IV or Article X hereof; or
(e) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of
the Company in the Debt Securities of that series, in any
resolution of the Board of Directors authorizing the issuance of
that series of Debt Securities, in this Indenture with respect to
such series or in any supplemental indenture with respect to such
series (other than a covenant a default in the performance of
which is elsewhere in this Section specifically dealt with),
continuing for a
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47
period of 60 days after the date on which written notice
specifying such failure and requiring the Company to remedy the
same shall have been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Debt Securities of that series at the time Outstanding; or
(f) the Company or any of its Significant Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition
seeking relief under bankruptcy, insolvency or similar law, (ii)
consent to the institution of, or fail to controvert within the
time and in the manner prescribed by law, any such proceeding or
the filing of any such petition, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Company or any such Significant
Subsidiary or for a substantial part of its property, (iv) file
an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) admit in writing its inability
or fail generally to pay its debts as they become due, (vii) take
corporate action for the purpose of effecting any of the
foregoing, or (viii) take any comparable action under any foreign
laws relating to insolvency; or
(g) the entry of an order or decree by a court having
competent jurisdiction in the premises for (i) relief in respect
of the Company or any of its Significant Subsidiaries or a
substantial part of any of their property under any bankruptcy,
insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the
Company or any such Significant Subsidiary or for a substantial
part of any of their property (except any decree or order
appointing such official of any Significant Subsidiary pursuant
to a plan under which the assets and operations of such
significant Subsidiary are transferred to or combined with
another Subsidiary or Subsidiaries of the Company or to the
Company) or (iii) the winding-up or liquidation of the Company or
any such Significant Subsidiary (except any decree or order
approving or ordering the winding up or liquidation of the
affairs of a Significant Subsidiary pursuant to a plan under
which the assets and operations of such Significant Subsidiary
are transferred to or combined with another Subsidiary or
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48
Subsidiaries of the Company or to the Company); and such order or
decree shall continue unstayed and in effect for 60 consecutive
days; or any similar relief is granted under any foreign laws and
the order of decree stays in effect for 60 consecutive days; or
(h) any other Event of Default provided under the terms of
the Debt Securities of that series;
then and in each and every case that an Event of Default with respect
to Debt Securities of that series at the time outstanding occurs and
is continuing, unless the principal of and interest on all the Debt
Securities of that series shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Debt Securities of that series then
Outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by Holders), may declare the principal of (or, if the
Debt Securities of that series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified
in the terms of that series) and interest on all the Debt Securities
of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debt Securities of that
series contained to the contrary notwithstanding.
The Holders of a majority in principal amount of the Debt
Securities of a particular series by notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not
conflict with any judgment or decree already rendered and if all
existing Events of Default have been cured or waived except nonpayment
of principal or interest that has become due solely because of
acceleration. Upon any such rescission, the parties hereto shall be
restored respectively to their several positions and rights hereunder,
and all rights, remedies and powers of the parties hereto shall
continue as though no proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to
enforce any right under this Indenture and such proceedings shall have
been discontinued or abandoned because of such rescission or annulment
or for any other reason or shall have been determined adversely to the
Trustee or such Holder, then and in every such case the parties hereto
shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the parties hereto
shall continue as though no such proceeding had been taken.
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49
The foregoing Events of Default shall constitute Events of
Default whatever the reason for any such Event of Default and whether
it is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an
Officers' Certificate of any event which with the giving of notice and
the lapse of time would become an Event of Default under clause (c),
(d), (e), (f), (g) or (h), its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02. Collection of Indebtedness by Trustee, etc. If
an Event of Default occurs and is continuing, the Trustee, in its own
name and as trustee of an express trust, shall be entitled and
empowered to institute any action or proceedings at law or in equity
for the collection of the sums so due and unpaid or enforce the
performance of any provision of the Debt Securities of the affected
series or this Indenture, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor upon
the Debt Securities of such series (and collect in the manner provided
by law out of the property of the Company or any other obligor upon
the Debt Securities of such series wherever situated the moneys
adjudged or decreed to be payable).
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor upon the Debt Securities of any series under any bankruptcy,
insolvency or similar law, or in case a receiver, trustee or other
similar official shall have been appointed for its property, or in
case of any other similar judicial proceedings relative to the Company
or any other obligor upon the Debt Securities of any series, its
creditors or its property, the Trustee, irrespective of whether the
principal of Debt Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 6.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file
and prove a claim or claims for the whole amount of principal,
premium, if any, and interest (or, if the Debt Securities of such
series are Original Issue Discount Debt Securities, such portion of
the principal amount as may be specified in the terms of such series)
owing and unpaid in
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50
respect of the Debt Securities of such series, and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities Incurred, and all
advances made, by the Trustee except as a result of its negligence or
bad faith) and of the Holders thereof allowed in any such judicial
proceedings relative to the Company, or any other obligor upon the
Debt Securities of such series, its creditors or its property, and to
collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of such Holders and of the Trustee on their
behalf, and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of such Holders to make
payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to such Holders, to pay to
the Trustee such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents, attorneys and counsel, and
all other reasonable expenses and liabilities Incurred, and all
advances made, by the Trustee except as a result of its negligence or
bad faith.
All rights of action and of asserting claims under this
Indenture, or under any of the Debt Securities, of any series, may be
enforced by the Trustee without the possession of any such Debt
Securities or the production thereof in any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment (except for any amounts payable to
the Trustee pursuant to Section 7.06) shall be for the ratable benefit
of the Holders of all the Debt Securities in respect of which such
action was taken.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it
by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 6.03. Application of Moneys Collected by Trustee.
Any moneys or other property collected by the
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51
Trustee pursuant to Section 6.02 with respect to Debt Securities of
any series shall be applied, after giving effect to the provisions of
Article XII, if applicable, in the order following, at the date or
dates fixed by the Trustee for the distribution of such moneys or
other property, upon presentation of the several Debt Securities of
such series in respect of which moneys or other property have been
collected, and the notation thereon of the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of all money due the Trustee pursuant
to Section 7.06;
Second: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected
shall not have become due, to the payment of interest on the Debt
Securities of such series in the order of the maturity of the
installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate or Yield to Maturity (in the
case of Original Issue Discount Debt Securities) borne by the
Debt Securities of such series, such payments to be made ratably
to the Persons entitled thereto, without discrimination or
preference;
Third: In case the principal of the Outstanding Debt
Securities in respect of which such moneys have been collected
shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Debt
Securities of such series for principal and premium, if any, and
interest, with interest on the overdue principal and premium, if
any, and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest at the rate or
Yield to Maturity (in the case of Original Issue Discount Debt
Securities) borne by the Debt Securities of such series; and, in
case such moneys shall be insufficient to pay in full the whole
amount so due and unpaid upon the Debt Securities of such series,
then to the payment of such principal and premium, if any, and
interest, without preference or priority of principal and
premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other
installment of interest, or of any Debt Security of such series
over any Debt Security of such series, ratably to the aggregate
of such principal and premium, if any, and interest; and
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52
Fourth: The remainder, if any, shall be paid to the Company,
its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same, or as a court of competent
jurisdiction may direct.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.03.
SECTION 6.04. Limitation on Suits by Holders. No Holder of
any Debt Security of any series shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise, upon or
under or with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless such
Holder previously shall have given to the Trustee written notice of an
Event of Default with respect to Debt Securities of that same series
and of the continuance thereof and unless the Holders of not less than
25% in aggregate principal amount of the Outstanding Debt Securities
of that series shall have made written request upon the Trustee to
institute such action or proceedings in respect of such Event of
Default in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be Incurred therein or thereby, and
the Trustee, for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or
proceedings and no direction inconsistent with such written request
shall have been given to the Trustee pursuant to Section 6.06; it
being understood and intended, and being expressly covenanted by the
Holder of every Debt Security with every other Holder and the Trustee,
that no one or more Holders shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture
to affect, disturb or prejudice the rights of any Holders, or to
obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit
of all such Holders. For the protection and enforcement of the
provisions of this Section 6.04, each and every Holder and the Trustee
shall be entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provision in this Indenture,
however, the right of any Holder of any Debt Security to receive
payment of the principal of, and premium, if any, and (subject to
Section 2.12) interest on, such Debt Security on or after the
respective due dates
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53
expressed in such Debt Security, and to institute suit for the
enforcement of any such payment on or after such respective dates,
shall not be impaired or effected without the consent of such Holder.
SECTION 6.05. Remedies Cumulative; Delay or Omission in
Exercise of Rights Not a Waiver of Default. All powers and remedies
given by this Article VI to the Trustee or to the Holders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of
any thereof or of any other powers and remedies available to the
Trustee or the Holders, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee
or of any Holder to exercise any right or power accruing upon any
Default occurring and continuing as aforesaid, shall impair any such
right or power, or shall be construed to be a waiver of any such
Default or an acquiescence therein; and, subject to the provisions of
Section 6.04, every power and remedy given by this Article VI or by
law to the Trustee or to the Holders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by
the Holders.
SECTION 6.06. Rights of Holders of Majority in Principal
Amount of Debt Securities to Direct Trustee and to Waive Default. The
Holders of a majority in aggregate principal amount of the Debt
Securities of any series at the time Outstanding shall have the right
to direct the time, method, and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of such
series; provided, however, that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture, and
that subject to the provisions of Section 7.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee being
advised by counsel shall determine that the action so directed may not
lawfully be taken, or if the Trustee shall by a responsible officer or
officers determine that the action so directed would involve it in
personal liability or would be unjustly prejudicial to Holders of Debt
Securities of such series not taking part in such direction; and
provided further, however, that nothing in this Indenture contained
shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction by
such Holders. Prior to the acceleration of the maturity of the Debt
Securities of any series, as provided in Section 6.01, the Holders of
a majority in aggregate principal amount of the Debt Securities of
that series at the time Outstanding may on
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54
behalf of the Holders of all the Debt Securities of that series waive
any past Default or Event of Default and its consequences for that
series specified in the terms thereof as contemplated by Section 2.03,
except (i) a Default in the payment of the principal of, and premium,
if any, or interest on, any of the Debt Securities and (ii) a Default
in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected thereby. In case of any
such waiver, such Default shall cease to exist, any Event of Default
arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, and the Company, the Trustee and the Holders of the
Debt Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.07. Trustee To Give Notice of Defaults Known to
It, but May Withhold Such Notice in Certain Circumstances. The Trustee
shall, within 90 days after the occurrence of a Default known to it
with respect to a series of Debt Securities give to the Holders
thereof, in the manner provided in Section 13.03, notice of all
Defaults with respect to such series known to the Trustee, unless such
Defaults shall have been cured or waived before the giving of such
notice; provided that, except in the case of Default in the payment of
the principal of, or premium, if any, or interest on, any of the Debt
Securities of such series or in the making of any sinking fund payment
with respect to the Debt Securities of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or
responsible officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders thereof.
SECTION 6.08. Requirement of an Undertaking To Pay Costs in
Certain Suits under the Indenture or Against the Trustee. All parties
to this Indenture agree, and each Holder of any Debt Security by his
acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the
Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs
of such suit in the manner and to the extent provided in the Trust
Indenture Act, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any
party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party
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55
litigant; but the provisions of this Section 6.08 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than ten
percent in principal amount of the Outstanding Debt Securities of that
series or to any suit instituted by any Holder for the enforcement of
the payment of the principal of, or premium, if any, or interest on,
any Debt Security on or after the due date for such payment expressed
in such Debt Security.
ARTICLE VII
Concerning the Trustee
SECTION 7.01. Certain Duties and Responsibilities. The
Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default
has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(a) this subsection shall not be construed to limit the
effect of the first paragraph of this Section 7.01;
(b) prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing
or waiving of all Events of Default with respect to such series
which may have occurred:
(1) the duties and obligations of the Trustee with
respect to Debt Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of
such duties and obligations with respect to such series as
are specifically set forth in this Indenture, and no implied
covenants or obligations
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56
with respect to such series shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture; but
the Trustee shall examine the evidence furnished to it
pursuant to Section 5.03 to determine whether or not such
evidence conforms to the requirement of this Indenture;
(c) the Trustee shall not be liable for an error of judgment
made in good faith by a responsible officer, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(d) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it with respect to Debt
Securities of any series in good faith in accordance with the
direction of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debt Securities of that
series relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this
Indenture with respect to Debt Securities of such series.
None of the provisions of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
personal financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there
shall be reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it.
Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.
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57
SECTION 7.02. Certain Rights of Trustee. Except as otherwise
provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note or other paper
or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Company
Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel, and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders of Debt
Securities of any series pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be Incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, approval or other paper or document,
unless requested in writing to do so by the Holders of a majority
in aggregate principal amount of the then
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58
outstanding Debt Securities of a series affected by such matter;
provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
Incurred by it in the making of such investigation is not, in the
opinion of the Trustee, reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The
reasonable expense of every such investigation shall be paid by
the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it with due care hereunder; and
(h) if any property other then cash shall at any time be
subject to a Lien in favor of the Holders, the Trustee, if and to
the extent authorized by a receivership or bankruptcy court of
competent jurisdiction or by the supplemental instrument
subjecting such property to such lien, shall be entitled to make
advances for the purpose of preserving such property or of
discharging tax Liens or other prior Liens or encumbrances
thereon.
SECTION 7.03. Trustee Not Liable for Recitals in Indenture
or in Debt Securities. The recitals contained herein and in the Debt
Securities (except the Trustee's certificate of authentication) shall
be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or
of the Debt Securities of any series, except that the Trustee
represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Debt Securities and perform its
obligations hereunder, and that the statements made by it or to be
made by it in a Statement of Eligibility and Qualification on Form T-1
supplied to the Company are true and accurate. The Trustee shall not
be accountable for the use or application by the Company of any of the
Debt Securities or of the proceeds thereof.
SECTION 7.04. Trustee, Paying Agent or Registrar May Own
Debt Securities. The Trustee or any paying agent or
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Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities and subject to the provisions of
the Trust Indenture Act relating to conflicts of interest and
preferential claims may otherwise deal with the Company with the same
rights it would have if it were not Trustee, paying agent or
Registrar.
SECTION 7.05. Moneys Received by Trustee To Be Held in
Trust. Subject to the provisions of Section 11.05, all moneys received
by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any
moneys received by it hereunder. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such
moneys shall be paid from time to time to the Company upon a Company
Order.
SECTION 7.06. Compensation and Reimbursement. The Company
covenants and agrees to pay in Dollars to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation
for all services rendered by it hereunder (which shall not be limited
by any provision of law in regard to the compensation of a trustee of
an express trust), and, except as otherwise expressly provided herein,
the Company will pay or reimburse in Dollars the Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents, attorneys and
counsel and of all Persons not regularly in its employ) except any
such expense, disbursement or advances as may arise from its
negligence or bad faith. The Company also covenants to indemnify in
Dollars the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence, wilful misconduct or
bad faith on the part of the Trustee, arising out of or in connection
with the acceptance or administration of this trust or trusts
hereunder, including the reasonable costs and expenses of defending
itself against any claim of liability in connection with the exercise
or performance of any of its powers or duties hereunder. The
obligations of the Company under this Section 7.06 to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. The Company and the Holders agree that
such additional indebtedness shall be secured by a Lien prior to that
of the Debt Securities upon all property and funds held
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or collected by the Trustee, as such, except funds held in trust for
the payment of principal of, and premium, if any, or interest on,
particular Debt Securities.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(g) or (h) occurs, the
expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy,
insolvency, reorganization or other similar law.
SECTION 7.07. Right of Trustee to Rely on an Officers'
Certificate Where No Other Evidence Specifically Prescribed. Except as
otherwise provided in Section 7.01, whenever in the administration of
the provisions of this Indenture the Trustee shall deem it necessary
or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall
be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 7.08. Separate Trustee; Replacement of Trustee. The
Company may, but need not, appoint a separate Trustee for any one or
more series of Debt Securities. The Trustee may resign with respect to
one or more or all series of Debt Securities at any time by giving
notice to the Company. The Holders of a majority in principal amount
of the Debt Securities of a particular series may remove the Trustee
for such series and only such series by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the
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Debt Securities of a particular series and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company
shall promptly appoint a successor Trustee. No resignation or removal
of the Trustee and no appointment of a successor Trustee shall become
effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon
the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee
shall mail a notice of its succession to Holders of Debt Securities of
each applicable series. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject
to the Lien provided for in Section 7.06.
If a successor Trustee does not take office within 60 days
after the retiring Trustee gives notice of resignation or is removed,
the retiring Trustee or the Holders of 25% in principal amount of the
Debt Securities of any applicable series may petition any court of
competent jurisdiction for the appointment of a successor Trustee for
the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder
of Debt Securities of any applicable series may petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee for the Debt Securities of such
series.
Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.06 shall
continue for the benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or
successor trustee with respect to the Debt Securities of one or more
series, the Company, any retiring Trustee and each successor or
separate Trustee with respect to the Debt Securities of any applicable
series shall execute and deliver an Indenture supplemental hereto (1)
which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of
any retiring Trustee with
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respect to the Debt Securities of any series as to which any such
retiring Trustee is not retiring shall continue to be vested in such
retiring Trustee and (2) that shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of
the same trust and that each such separate, retiring or successor
Trustee shall be Trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other
such Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving
or transferee corporation or banking association without any further
act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Debt Securities shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee,
and deliver such Debt Securities so authenticated; and in case at that
time any of the Debt Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Debt Securities either
in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Debt Securities
or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of Section 310(a) of the
Trust Indenture Act. The Trustee shall have a combined capital and
surplus of at least $50,000,000, as set forth in its most recent
published annual report of condition. No obligor upon the Debt
Securities of a particular series or Person directly or indirectly
controlling, controlled by or under common control with such obligor
shall serve as Trustee upon the Debt Securities of such series. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided, however, that there shall be excluded from the operation of
Section 310(b)(1) of the Trust Indenture Act this Indenture or any
indenture or indentures under which other securities
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63
or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set
forth in Section 310(b)(1) of the Trust Indenture Act are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship listed in Section
311(b) of the Trust Indenture Act. A Trustee who had resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act
to the extent indicated therein.
ARTICLE VIII
Concerning the Holders
SECTION 8.01. Evidence of Action by Holders. Whenever in
this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Debt Securities of any
or all series may take action (including the making of any demand or
request, the giving of any direction, notice, consent or waiver or the
taking of any other action) the fact that at the time of taking any
such action the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Holders in person or by agent
or proxy appointed in writing, (b) by the record of the Holders voting
in favor thereof at any meeting of Holders duly called and held in
accordance with the provisions of Section 5.02 or (c) by a combination
of such instrument or instruments and any such record of such a
meeting of Holders.
SECTION 8.02. Proof of Execution of Instruments and of
Holding of Debt Securities. Subject to the provisions of Sections
7.01, 7.02 and 13.09, proof of the execution of any instrument by a
Holder or his agent or proxy shall be sufficient if made in accordance
with such reasonable rules and regulations as may be prescribed by the
Trustee or in such manner as shall be satisfactory to the Trustee.
The ownership of Registered Securities of any series shall
be proved by the Debt Security Register or by a certificate of the
Registrar for such series.
The Trustee may require such additional proof of any matter
referred to in this Section 8.02 as it shall deem necessary.
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SECTION 8.03. Who May Be Deemed Owner of Debt Securities.
Prior to due presentment for registration of transfer of any
Registered Security, the Company, the Trustee, any paying agent and
any Registrar may deem and treat the Person in whose name any
Registered Security shall be registered upon the books of the Company
as the absolute owner of such Registered Security (whether or not such
Registered Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and premium, if any, and
(subject to Section 2.03) interest on such Registered Security and for
all other purposes, and neither the Company nor the Trustee nor any
paying agent nor any Registrar shall be affected by any notice to the
contrary; and all such payments so made to any such Holder for the
time being, or upon his order, shall be valid and, to the extent of
the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Registered Security.
None of the Company, the Trustee, any paying agent or the
Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial
ownership interests in a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial
ownership interests.
SECTION 8.04. Instruments Executed by Holders Bind Future
Holders. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any action by
the Holders of the percentage in aggregate principal amount of the
Debt Securities of any series specified in this Indenture in
connection with such action and subject to the following paragraph,
any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to
such action may, by filing written notice with the Trustee at its
corporate trust office and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Debt
Security. Except as aforesaid any such action taken by the Holder of
any Debt Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Debt Security and of any
Debt Security issued upon transfer thereof or in exchange or
substitution therefor, irrespective of whether or not any notation in
regard thereto is made upon such Debt Security or such other Debt
Securities. Any action taken by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series
specified in this Indenture in connection with such action shall be
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65
conclusively binding upon the Company, the Trustee and the Holders of
all the Debt Securities of such series.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders of Registered
Securities entitled to give their consent or take any other action
required or permitted to be taken pursuant to this Indenture. If a
record date is fixed, then notwithstanding the immediately preceding
paragraph, those Persons who were Holders of Registered Securities at
such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not
such Persons continue to be Holders of Registered Securities after
such record date. No such consent shall be valid or effective for more
than 120 days after such record date unless the consent of the Holders
of the percentage in aggregate principal amount of the Debt Securities
of such series specified in this Indenture shall have been received
within such 120-day period.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Purposes for Which Supplemental Indenture May
Be Entered into Without Consent of Holders. The Company, when
authorized by a resolution of the Board of Directors, and the Trustee
may from time to time and at any time, without the consent of Holders,
enter into an Indenture or Indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at
the date of the execution thereof) for one or more of the following
purposes:
(a) to evidence the succession pursuant to Article X of
another Person to the Company, or successive successions, and the
assumption by the Successor Company (as defined in Section 10.01)
of the covenants, agreements and obligations of the Company in
this Indenture and in the Debt Securities;
(b) to surrender any right or power herein conferred upon
the Company, to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the
protection of the Holders of all or any series of Debt Securities
(and if such covenants are to be for the benefit of less than all
series of Debt Securities, stating that such covenants are
expressly being included solely for the
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benefit of such series) as the Board of Directors shall consider
to be for the protection of the Holders of such Debt Securities,
and to make the occurrence, or the occurrence and continuance, of
a Default in any of such additional covenants, restrictions,
conditions or provisions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture; provided, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of
grace after Default (which period may be shorter or longer than
that allowed in the case of other Defaults) or may provide for an
immediate enforcement upon such Default or may limit the remedies
available to the Trustee upon such Default or may limit the right
of the Holders of a majority in aggregate principal amount of any
or all series of Debt Securities to waive such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein, in any supplemental indenture or in
any Debt Securities of any series that may be defective or
inconsistent with any other provision contained herein, in any
supplemental indenture or in the Debt Securities of such series;
to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee, or to make such other provisions in regard
to matters or questions arising under this Indenture as shall not
adversely affect the interests of any Holders of Debt Securities
of any series;
(d) to modify or amend this Indenture in such a manner as to
permit the qualification of this Indenture or any Indenture
supplemental hereto under the Trust Indenture Act as then in
effect, except that nothing herein contained shall permit or
authorize the inclusion in any Indenture supplemental hereto of
the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act;
(e) to add to or change any of the provisions of this
Indenture to change or eliminate any restrictions on the payment
of principal of, or premium, if any, or interest on, Registered
Securities; provided, that any such action shall not adversely
affect the interests of the Holders of Debt Securities of any
series in any material respect;
(f) to comply with Article X;
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(g) in the case of any Debt Securities, if any, subordinated
pursuant to Article XII, to make any change in Article XII that
would limit or terminate the benefits applicable to any holder of
Senior Indebtedness (or Representatives therefor) under Article
XII;
(h) to add Guarantees with respect to the Debt Securities or
to secure the Debt Securities;
(i) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Debt
Securities; provided, however, that any such addition, change or
elimination not otherwise permitted under this Section 9.01 shall
(i) neither (A) apply to any Debt Security of any series created
prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Debt Security with respect to
such provision or (ii) shall become effective only when there is
no such Debt Security outstanding;
(j) to evidence and provide for the acceptance of
appointment hereunder by a successor or separate Trustee with
respect to the Debt Securities of one or more series and to add
to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; and
(k) to establish the form or terms of Debt Securities of any
series as permitted by Sections 2.01 and 2.03.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer, assignment, mortgage or pledge
of any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the Trustee
without the consent of the Holders of any of the Debt Securities at
the time outstanding, notwithstanding any of the provisions of Section
9.02.
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In the case of any Debt Securities subordinated pursuant to
Article XII, an amendment under this Section 9.01 may not make any
change that adversely affects the rights under Article XII of any
holder of such Senior Indebtedness then Outstanding unless the holders
of such Senior Indebtedness (or any group or Representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.01 becomes
effective, the Company shall mail to Holders of Debt Securities of
each series affected thereby a notice briefly describing such
amendment. The failure to give such notice to all such Holders, or any
defect therein, shall not impair or affect the validity of an
amendment under this Section 9.01.
SECTION 9.02. Modification of Indenture with Consent of
Holders of Debt Securities. Without notice to any Holder but with the
consent (evidenced as provided in Section 8.01) of the Holders of not
less than a majority in aggregate principal amount of the outstanding
Debt Securities of each series affected by such supplemental
Indenture, the Company, when authorized by a resolution of the Board
of Directors, and the Trustee may from time to time and at any time
enter into an Indenture or Indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at
the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debt
Securities of such series; provided, that no such supplemental
Indenture, without the consent of the Holders of each Debt Security so
affected, shall (i) reduce the percentage in principal amount of Debt
Securities of any series whose Holders must consent to an amendment;
(ii) reduce the rate of or extend the time for payment of interest on
any Debt Security; (iii) reduce the principal of or extend the Stated
Maturity of any Debt Security; (iv) reduce the premium payable upon
the redemption of any Debt Security or change the time at which any
Debt Security may or shall be redeemed in accordance with Article III;
(v) make any Debt Security payable in Currency other than that stated
in the Debt Security; (vi) in the case of any Debt Security
subordinated pursuant to Article XII, make any change in Article XII
that adversely affects the rights of any Holder under Article XII;
(vii) release any security that may have been granted in respect of
the Debt Securities; or (viii) make any change in Section 6.06 or this
Section 9.02.
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A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has been expressly
included solely for the benefit of one or more particular series of
Debt Securities or which modifies the rights of the Holders of Debt
Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Company, accompanied by a copy of a
resolution of the Board of Directors authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter
into such supplemental indenture.
It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
In the case of any Debt Securities subordinated pursuant to
Article XII, an amendment under this Section 9.02 may not make any
change that adversely affects the rights under Article XII of any
holder of such Senior Indebtedness then Outstanding unless the holders
of such Senior Indebtedness (or any group or Representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.02 becomes
effective, the Company shall mail to Holders of Debt Securities of
each series affected thereby a notice briefly describing such
amendment. The failure to give such notice to all such Holders, or any
defect therein, shall not impair or affect the validity of an
amendment under this Section 9.02.
SECTION 9.03. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture pursuant to the provisions of
this Article IX, this Indenture shall be and be deemed to be modified
and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders shall thereafter
be
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determined, exercised and enforced hereunder subject in all respects
to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
The Trustee, subject to the provisions of Sections 7.01 and
7.02, may receive an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that any such supplemental indenture complies
with the provisions of this Article IX.
SECTION 9.04. Debt Securities May Bear Notation of Changes
by Supplemental Indentures. Debt Securities of any series
authenticated and delivered after the execution of any supplemental
Indenture pursuant to the provisions of this Article IX may, and shall
if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.
New Debt Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification
of this Indenture contained in any such supplemental indenture may be
prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Debt Securities of such series then
outstanding. Failure to make the appropriate notation or to issue a
new Debt Security of such series shall not affect the validity of such
amendment.
ARTICLE X
Amalgamation, Consolidation, Merger, Sale or Conveyance
SECTION 10.01. Amalgamations,Consolidations and Mergers of
the Company. The Company shall not amalgamate or consolidate with or
merge with or into any Person, or convey, transfer or lease all or
substantially all its assets, unless: (i) either (a) the Company shall
be the continuing Person in the case of a merger or (b) the resulting,
surviving or transferee Person if other than the Company (the
"Successor Company") shall be a corporation organized and existing
under the laws of Canada, any province thereof, the United States, any
State thereof or the District of Columbia and the Successor Company
shall expressly assume, by an Indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Debt Securities according to
their tenor, and this Indenture; (ii) immediately after giving effect
to such transaction (and treating any Indebtedness which becomes an
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obligation of the Successor Company or any Subsidiary of the Company
as a result of such transaction as having been Incurred by the
Successor Company or such Subsidiary at the time of such transaction),
no Default would occur or be continuing; and (iii) the Company shall
have delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that such amalgamation, consolidation, merger
or transfer and such supplemental indenture (if any) comply with this
Indenture.
SECTION 10.02. Rights and Duties of Successor Corporation.
In case of any amalgamation, consolidation or merger, or conveyance or
transfer of the assets of the Company as an entirety or virtually as
an entirety in accordance with Section 10.01, the Successor Company
shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part,
and the predecessor corporation shall be relieved of any further
obligation under the Indenture and the Debt Securities. The Successor
Company thereupon may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all the Debt Securities
issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of the
Successor Company, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Debt Securities which
previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Debt Securities
which the Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Debt Securities so
issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debt Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all
such Debt Securities had been issued at the date of the execution
hereof.
In case of any such amalgamation, consolidation, merger,
sale or conveyance such changes in phraseology and form (but not in
substance) may be made in the Debt Securities appertaining thereto
thereafter to be issued as may be appropriate.
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ARTICLE XI
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
SECTION 11.01. Applicability of Article. If, pursuant to
Section 2.03, provision is made for the defeasance of Debt Securities
of a series, then the provisions of this Article XI relating to
defeasance of Debt Securities shall be applicable except as otherwise
specified pursuant to Section 2.03 for Debt Securities of such series.
SECTION 11.02. Satisfaction and Discharge of Indenture:
Defeasance. (a) If at any time (i) the Company shall have delivered to
the Trustee for cancelation all Debt Securities of any series
theretofore authenticated and delivered (other than (1) any Debt
Securities of such series which shall have been destroyed, lost or
stolen and which shall have been replaced or paid as provided in
Section 2.09 and (2) Debt Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the
Company as provided in Section 11.05) or (ii) all Debt Securities of
such series not theretofore delivered to the Trustee for cancelation
shall have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and the Company shall deposit with the
Trustee as trust funds the entire amount in the Currency in which such
Debt Securities are denominated (except as otherwise provided pursuant
to Section 2.03) sufficient to pay at maturity or upon redemption all
Debt Securities of such series not theretofore delivered to the
Trustee for cancelation, including principal and premium, if any, and
interest due or to become due on such date of maturity or redemption
date, as the case may be, and if in either case the Company shall also
pay or cause to be paid all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect
(except as to any surviving rights of registration of transfer or
exchange of such Debt Securities herein expressly provided for and
rights to receive payments of principal of, and premium, if any, and
interest on, such Debt Securities) with respect to the Debt Securities
of such series, and the Trustee, on demand of the Company accompanied
by an Officers' Certificate and an opinion of counsel and at the cost
and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture.
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(b) Subject to Sections 11.02(c), 11.03 and 11.07, the
Company at any time may terminate, with respect to Debt Securities of
a particular series, (i) all its obligations under the Debt Securities
of such series and this Indenture with respect to the Debt Securities
of such series ("legal defeasance option") or (ii) its obligations
with respect to the Debt Securities of such series under clause (ii)
of Section 10.01 and the related operation of Section 6.01(d) and the
operation of Sections 6.01(e), (f) and (i) ("covenant defeasance
option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option,
payment of the Debt Securities of the defeased series may not be
accelerated because of an Event of Default. If the Company exercises
its covenant defeasance option, payment of the Debt Securities of the
defeased series may not be accelerated because of an Event of Default
specified in Sections 6.01(d), (e), (f) and (i) (except to the extent
covenants or agreements referenced in such Sections remain
applicable).
Upon satisfaction of the conditions set forth herein and
upon request of the Company, the Trustee shall acknowledge in writing
the discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10,
11.05, 11.06 and 11.07 shall survive until the Debt Securities of the
defeased series have been paid in full. Thereafter, the Company's
obligations in Sections 7.06, 11.05 and 11.06 shall survive.
SECTION 11.03. Conditions of Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option
with respect to Debt Securities of a particular series only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of
principal of, and premium, if any, and interest on, the Debt
Securities of such series to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government
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Obligations plus any deposited money without investment will
provide cash at such times and in such amounts as will be
sufficient to pay the principal, premium and interest when due on
all the Debt Securities of such series to maturity or redemption,
as the case may be;
(3) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 6.01(g) or (h) with
respect to the Company occurs which is continuing at the end of
the period;
(4) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any
other agreement binding on the Company and, if the Debt
Securities of such series are subordinated pursuant to Article
XII, is not prohibited by Article XII;
(6) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit
does not constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940;
(7) in the event of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating
that (i) the Company has received from the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in
either case of the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of Debt Securities of
such series will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(8) in the event of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of Debt Securities of such series
will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have
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been the case if such covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Debt
Securities of such series as contemplated by this Article XI have
been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Debt Securities of
such series at a future date in accordance with Article III.
SECTION 11.04. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article XI. It shall apply the deposited money and
the money from U.S. Government Obligations through any paying agent
and in accordance with this Indenture to the payment of principal of,
and premium, if any, and interest on, the Debt Securities of the
defeased series. In the event the Debt Securities of the defeased
series are subordinated pursuant to Article XII, money and securities
so held in trust are not subject to Article XII.
SECTION 11.05. Repayment to Company. The Trustee and any
paying agent shall promptly turn over to the Company upon request any
excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the
Trustee and any paying agent shall pay to the Company upon request any
money held by them for the payment of principal, premium or interest
that remains unclaimed for two years, and, thereafter, Holders
entitled to such money must look to the Company for payment as general
creditors.
SECTION 11.06. Indemnity for U.S. Government Obligations.
The Company shall pay and shall indemnify the Trustee and the Holders
against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and interest
received on such U.S. Government Obligations.
SECTION 11.07. Reinstatement. If the Trustee or any paying
agent is unable to apply any money or U.S. Government Obligations in
accordance with this Article XI by reason of any legal proceeding or
by reason of any order or judgment of any court or government
authority enjoining,
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76
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Debt Securities of the
defeased series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article XI until such time as the
Trustee or any paying agent is permitted to apply all such money or
U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
Subordination of Debt Securities
SECTION 12.01. Applicability of Article; Agreement To
Subordinate. The provisions of this Article XII shall be applicable to
the Debt Securities of any series (Debt Securities of such series
referred to in this Article XII as "Subordinated Debt Securities")
designated, pursuant to Section 2.03, as subordinated to Senior
Indebtedness. Each Holder by accepting a Subordinated Debt Security
agrees that the Indebtedness evidenced by such Subordinated Debt
Security is subordinated in right of payment, to the extent and in the
manner provided in this Article XII, to the prior payment of all
Senior Indebtedness and that the subordination is for the benefit of
and enforceable by the holders of Senior Indebtedness. All provisions
of this Article XII shall be subject to Section 12.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon
any payment or distribution of the assets of the Company to creditors
upon a total or partial liquidation or a total or partial 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 Senior Indebtedness
(including interest (if any), accruing on or after the
commencement of a proceeding in bankruptcy, whether or not
allowed as a claim against the Company in such bankruptcy
proceeding) before Holders of Subordinated Debt Securities shall
be entitled to receive any payment of principal of, or premium,
if any, or interest on, the Subordinated Debt Securities; and
(2) until the Senior Indebtedness is paid in full, any
distribution to which Holders of Subordinated Debt Securities
would be entitled but for this Article XII
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77
shall be made to holders of Senior Indebtedness as their
interests may appear, except that such Holders may receive shares
of stock and any debt securities that are subordinated to Senior
Indebtedness to at least the same extent as the Subordinated Debt
Securities.
SECTION 12.03. Default on Senior Indebtedness. The Company
may not pay the principal of, or premium, if any, or interest on, the
Subordinated Debt Securities or make any deposit pursuant to Article
XI and may not repurchase, redeem or otherwise retire (except, in the
case of Subordinated Debt Securities that provide for a mandatory
sinking fund pursuant to Section 3.04, by the delivery of Subordinated
Debt Securities by the Company to the Trustee pursuant to the first
paragraph of Section 3.05) any Debt Securities (collectively, "pay the
Subordinated Debt Securities") if (i) any principal, premium or
interest in respect of Senior Indebtedness is not paid within any
applicable grace period (including at maturity) or (ii) any other
default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Senior Indebtedness has
been paid in full in cash; provided, however, that the Company may pay
the Subordinated Debt Securities without regard to the foregoing if
the Company and the Trustee receive written notice approving such
payment from the Representative of each issue of Designated Senior
Indebtedness. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence)
with respect to any Senior Indebtedness pursuant to which the maturity
thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay
the Subordinated Debt Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Company and the Trustee of
written notice of such default from the Representative of any
Designated Senior Indebtedness specifying an election to effect a
Payment Blockage Period (a "Blockage Notice") and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated
(i) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice, (ii) by repayment in full in
cash of such Designated Senior Indebtedness or (iii) because the
default giving rise to such Blockage Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding
sentence (but subject to the provisions contained
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in the first sentence of this Section 12.03), unless the holders of
such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Subordinated Debt
Securities after such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to any number of
issues of Senior Indebtedness during such period; provided, however,
that if any Blockage Notice within such 360-day period is given by or
on behalf of any holders of Designated Senior Indebtedness (other than
the Bank Indebtedness), the Representative of the Bank Indebtedness
may give another Blockage Notice within such period; provided further,
however, that in no event may the total number of days during which
any Payment Blockage Period or Periods is in effect exceed 179 days in
the aggregate during any 360 consecutive day period. For purposes of
this Section 12.03, no default or event of default which existed or
was continuing on the date of the commencement of any Payment Blockage
Period with respect to the Senior Indebtedness initiating such Payment
Blockage Period shall be, or be made, the basis of the commencement of
a subsequent Payment Blockage Period by the Representative of such
Senior Indebtedness, whether or not within a period of 360 consecutive
days, unless such default or event of default shall have been cured or
waived for a period of not less than 90 consecutive days.
SECTION 12.04. Acceleration of Payment of Debt Securities.
If payment of the Subordinated Debt Securities is accelerated because
of an Event of Default, the Company or the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness (or their
Representatives) of the acceleration.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Holders of Subordinated Debt Securities that
because of this Article XII should not have been made to them, the
Holders who receive such distribution shall hold it in trust for
holders of Senior Indebtedness and pay it over to them as their
interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness is
paid in full and until the Subordinated Debt Securities are paid in
full, Holders thereof shall be subrogated to the rights of holders of
Senior Indebtedness to receive distributions applicable to Senior
Indebtedness. A distribution made under this Article XII to holders of
Senior Indebtedness which otherwise would have been made to
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Holders of Subordinated Debt Securities is not, as between the Company
and such Holders, a payment by the Company on Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article XII defines the
relative rights of Holders of Subordinated Debt Securities and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of either
Subordinated Debt Securities or Debt Securities, the obligation
of the Company, which is absolute and unconditional, to pay
principal of, and premium, if any, and interest on, the
Subordinated Debt Securities and the Debt Securities in
accordance with their terms; or
(2) prevent the Trustee or any Holder of either Subordinated
Debt Securities or Debt Securities from exercising its available
remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Holders of Subordinated Debt Securities.
SECTION 12.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Subordinated Debt
Securities shall be impaired by any act or failure to act by the
Company or by its failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or any paying agent may
continue to make payments on Subordinated Debt Securities and shall
not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two
business days prior to the date of such payment, a responsible officer
of the Trustee receives notice satisfactory to it that payments may
not be made under this Article XII. The Company, the Registrar, any
paying agent, a Representative or a holder of Senior Indebtedness may
give the notice; provided, however, that, if an issue of Senior
Indebtedness has a Representative, only the Representative may give
the notice.
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. The Registrar and any paying agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in
this Article XII with respect to any Senior Indebtedness which
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may at any time be held by it, to the same extent as any other holder
of Senior Indebtedness; and nothing in Article VII shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article
XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.06.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given
to their Representative (if any).
SECTION 12.11. Article XII Not to Prevent Defaults or Limit
Right to Accelerate. The failure to make a payment pursuant to the
Debt Securities by reason of any provision in this Article XII shall
not be construed as preventing the occurrence of a Default. Nothing in
this Article XII shall have any effect on the right of the Holders or
the Trustee to accelerate the maturity of either the Subordinated Debt
Securities or the Debt Securities, as the case may be.
SECTION 12.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article XI by the Trustee
for the payment of principal of, and premium, if any, and interest on, the
Subordinated Debt Securities or the Debt Securities shall not be subordinated
to the prior payment of any Senior Indebtedness or subject to the restrictions
set forth in this Article XII, and none of the Holders thereof shall be
obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness of the Company or any other creditor of the Company.
SECTION 12.13. Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Holders
shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred
to in Section 12.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to such Holders or (iii) upon the
Representatives for the holders of Senior Indebtedness for the purpose
of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the 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 XII. In the
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event that the Trustee determines, in good faith, that 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 XII, 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 other facts pertinent to the rights of such Person under this
Article XII, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment. The provisions of
Sections 7.01 and 7.02 shall be applicable to all actions or omissions
of actions by the Trustee pursuant to this Article XII.
SECTION 12.14. Trustee to Effectuate Subordination. Each
Holder by accepting a Subordinated Debt Security authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the
subordination between the Holders of Subordinated Debt Securities and
the holders of Senior Indebtedness as provided in this Article XII and
appoints the Trustee as attorney-in-fact for any and all such
purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to
Holders of Subordinated Debt Securities or the Company or any other
Person, money or assets to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article XII or otherwise.
SECTION 12.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Subordinated Debt
Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the
issuance of the Subordinated Debt Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.
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ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. Successors and Assigns of Company Bound by
Indenture. All the covenants, stipulations, promises and agreements in
this Indenture contained by or in behalf of the Company or the Trustee
shall bind its successors and assigns, whether so expressed or not.
SECTION 13.02. Acts of Board, Committee or Officer of
Successor Company Valid. Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by any
board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee or
officer of any Successor Company.
SECTION 13.03. Required Notices or Demands. Except as
otherwise expressly provided in this Indenture, any notice or demand
which by any provision of this Indenture is required or permitted to
be given or served by the Trustee or by the Holders to or on the
Company may be given or served by being deposited postage prepaid in a
post office letter box in the United States addressed (until another
address is filed by the Company with the Trustee) as follows:
Chieftain International, Inc., 1201 TD Tower, 10088-102 Avenue,
Edmonton, Alberta, T5J 2Z1, Canada, Attention: Chief Financial
Officer. Except as otherwise expressly provided in this Indenture, any
notice, direction, request or demand by the Company or by any Holder
to or upon the Trustee may be given or made, for all purposes, by
being deposited, postage prepaid, in a post office letter box in the
United States addressed to the corporate trust office of the Trustee
initially at _______________, ________________________, Attention:
_______________________. The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent
notices or communications.
Any notice required or permitted to a Registered Holder by
the Company or the Trustee pursuant to the provisions of this
Indenture shall be deemed to be properly mailed by being deposited
postage prepaid in a post office letter box in the United States
addressed to such Holder at the address of such Holder as shown on the
Debt Security Register. Any report pursuant to Section 313 of the
Trust Indenture Act shall be transmitted in compliance with subsection
(c) therein.
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83
In the event of suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by
mail, then such notification as shall be given with the approval of
the Trustee shall constitute sufficient notice for every purpose
thereunder.
In the event of suspension of publication of any Authorized
Newspaper or by reason of any other cause it shall be impracticable to
give notice by publication, then such notification as shall be given
with the approval of the Trustee shall constitute sufficient notice
for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any
defect in it or any defect in any notice by publication as to a Holder
shall not affect the sufficiency of such notice with respect to other
Holders. If a notice or communication is mailed or published in the
manner provided above, it is conclusively presumed duly given.
SECTION 13.04. Indenture and Debt Securities to Be Construed
in Accordance with the Laws of the State of New York. This Indenture
and each Debt Security shall be deemed to be New York contracts, and
for all purposes shall be construed in accordance with the laws of
said State (without reference to principles of conflicts of law).
SECTION 13.05. Officers' Certificate and Opinion of Counsel
to Be Furnished upon Application or Demand by the Company. Upon any
application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to
such particular application or demand, no additional certificate or
opinion need be furnished.
Each certificate or opinion provided for in this Indenture
and delivered to the Trustee 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
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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 13.06. Payments Due on Legal Holidays. In any case
where the date of maturity of interest on or principal of and premium,
if any, on the Debt Securities of a series or the date fixed for
redemption or repayment of any Debt Security or the making of any
sinking fund payment shall not be a business day at any Place of
Payment for the Debt Securities of such series, then payment of
interest or principal and premium, if any, or the making of such
sinking fund payment need not be made on such date at such Place of
Payment, but may be made on the next succeeding business day at such
Place of Payment with the same force and effect as if made on the date
of maturity or the date fixed for redemption, and no interest shall
accrue for the period after such date. If a record date is not a
business day, the record date shall not be affected.
SECTION 13.07. Provisions Required by Trust Indenture Act to
Control. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this
Indenture which is required to be included in this Indenture by any of
Sections 310 to 318, inclusive, of the Trust Indenture Act, such
required provision shall control.
SECTION 13.08. Computation of Interest on Debt Securities.
Interest, if any, on the Debt Securities shall be computed on the
basis of a 360-day year of twelve 30-day months, except as may
otherwise be provided pursuant to Section 2.03.
SECTION 13.09. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar and any paying agent may make reasonable rules
for their functions.
SECTION 13.10. No Recourse Against Others. An incorporator
or any past, present or future director, officer, employee or
stockholder, as such, of the Company shall not have any liability for
any obligations of the Company under the Debt Securities or this
Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Debt Security, each
Holder shall waive and release all such
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liability. The waiver and release shall be part of the consideration
for the issue of the Debt Securities.
SECTION 13.11. Consent to Jurisdiction and Service of
Process. (a) The Company irrevocably consents to the nonexclusive
jurisdiction of any court of the State of New York or any United
States Federal court sitting, in each case, in the Borough of
Manhattan, The City of New York, New York, United States of America,
and any appellate court from any thereof, and waive any immunity from
the jurisdiction of such courts over any suit, action or proceeding
that may be brought in connection with this Indenture and the Debt
Securities. The Company irrevocably waives, to the fullest extent
permitted by law, any objection to any suit, action or proceeding that
may be brought in connection with this Indenture or the Debt
Securities in such courts whether on the grounds of venue, residence
or domicile or on the ground that any such suit, action or proceeding
has been brought in an inconvenient forum. The Company agrees that
final judgment in any such suit, action or proceeding brought in such
court shall be conclusive and binding upon the Company and may be
enforced in any court to the jurisdiction of which the Company is
subject by a suit upon such judgment; provided that service of process
is effected upon the Company in the manner provided by this Indenture.
(b) The Company agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in connection
with this Indenture or the Debt Securities against the Company in any
court of the State of New York or any United States Federal court
sitting, in each case, in the Borough of Manhattan, The City of New
York, may be made upon CT Corporation System at 1633 Broadway, New
York, New York 10019, whom the Company irrevocably appoints as its
authorized agent for service of process. The Company represents and
warrants that CT Corporation System has agreed to act as its agent for
service of process. The Company agrees that such appointment shall be
irrevocable until the irrevocable appointment by the Company of a
successor as its authorized agent for such purpose and the acceptance
of such appointment by such successor. The Company further agrees to
take any and all action, including the filing of any and all documents
and instruments, that may be necessary to continue such appointment in
full force and effect as aforesaid. If CT Corporation System shall
cease to act as the agent for service of process for the Company, the
Company shall appoint without delay another such agent and provide
prompt written notice to the Trustee of such appointment. With respect
to any such action in any court of the State of New York or any United
States Federal
<PAGE>
86
court, in each case, in the Borough of Manhattan, The City of New
York, service of process upon John L. Roach, Inc., as the authorized
agent of the Company for service of process, and written notice of
such service to the Company shall be deemed, in every respect,
effective service of process upon the Company.
(c) Nothing in this Section shall affect the right of any
party to serve legal process in any other manner permitted by law or
affect the right of any party to bring any action or proceeding
against any other party or its property in the courts of other
jurisdictions.
SECTION 13.12. Severability. In case any provision in this
Indenture, the Debt Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 13.13. Effect of Headings. The article and section
headings herein and in the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 13.14. Indenture May Be Executed in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
<PAGE>
87
The Trustee hereby accepts the trusts in this Indenture upon
the terms and conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly signed as of the date first written above.
CHIEFTAIN INTERNATIONAL, INC.,
by------------------------------
Name:
Title:
--------------------,
by-------------------------------
Name:
Title:
[Letterhead of]
Bennett Jones
Exhibit 5.1
John S. Burns, Q.C.
Direct Line: (403) 298-3451
e-mail: [email protected]
Our File No.: 26880-68
October 8, 1999
Chieftain International, Inc.
1201 TD Tower
10088 - 102 Avenue
Edmonton, Alberta T5J 2Z1
Dear Sirs:
Re: Chieftain International, Inc.
Registration Statement on Form S-3
We have acted as counsel for Chieftain International, Inc., a
corporation organized under the laws of the Province of Alberta (the
"Company"), in connection with the filing by the Company with the Securities
and Exchange Commission (the "Commission") of a Registration Statement on Form
S-3 (the "Registration Statement") relating to (i) Common Shares, (ii)
Preferred Shares, (iii) Debt Securities, and (iv) Warrants. The Common Shares,
Preferred Shares, Debt Securities and Warrants are referred to herein,
collectively, as the "Offered Securities". The Offered Securities being
registered under the Registration Statement will be offered on a continued or
delayed basis pursuant to the provisions of Rule 415 under the Securities Act
of 1933, (the "Securities Act").
Unless otherwise provided in any prospectus supplement forming a
part of the Registration Statement relating to a particular series of Debt
Securities, the Debt Securities will be issued under an Indenture in the form
of Exhibit 4.1 to the Registration Statement (the "Indenture") to be executed
by the Company and an institution as identified in such Indenture, as Trustee
(the "Trustee"). The Preferred Shares will be issued pursuant to a resolution
of the Board of Directors of the Company relating to a particular series of
Preferred Shares. The Warrants will be issued under one or more warrant
agreements (each, a "Warrant Agreement"), each to be entered into between the
Company and one or more institutions as identified in the applicable Warrant
Agreement.
In connection with the foregoing, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
for the purposes of this opinion, including without limitation the following:
(a) the Articles of Incorporation, as amended, of the Company; (b) the By-laws
of the Company; (c) the form of Indenture attached to the Registration
Statement as Exhibit 4.1; and (d) the minutes of the Board of Directors of the
Company.
<PAGE>
Chieftain International, Inc. 2 October 8, 1999
Based upon and subject to the foregoing and assuming that (i) the
Registration Statement and any amendments thereto (including post-effective
amendments) will have become effective and comply with all applicable laws;
(ii) the Registration Statement will be effective and will comply with all
applicable laws at the time the Offered Securities are offered or issued as
contemplated by the Registration Statement; (iii) a prospectus supplement will
have been prepared and filed with the Commission describing the Offered
Securities offered thereby and will comply with all applicable laws; (iv) all
Offered Securities will be issued and sold in compliance with the applicable
federal and state securities laws and the laws of such other jurisdictions in
which the Offered Securities are offered or issued and in the manner stated in
the Registration Statement and the appropriate prospectus supplement; (v) a
definitive purchase, underwriting or similar agreement and any other necessary
agreement with respect to any Offered Securities offered or issued will have
been duly authorized and validly executed and delivered by the Company and the
other parties thereto; and (vi) any Offered Securities issuable upon
conversion, exchange or exercise of any Offered Security being offered or
issued will be duly authorized , created and, if appropriate, reserved for
issuance upon such conversion, exchange or exercise, we are of the opinion as
follows:
The Company is duly incorporated and is a validly existing
corporation under the laws of the Province of Alberta.
With respect to Debt Securities to be issued under the Indenture,
when (A) the Trustee is qualified to act as Trustee under the Indenture, (B)
the Trustee has duly executed and delivered the Indenture, (C) the Indenture
has been duly authorized and validly executed and delivered by the Company to
the Trustee, (D) the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, (E) the Board of Directors of the Company
or a duly constituted and acting committee thereof (such Board of Directors or
committee being hereinafter referred to as the "Board") has taken all
necessary corporate action to approve the issuance and terms of such Debt
Securities, the terms of the offering thereof and related matters, and (F)
such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Indenture, and the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor provided for therein,
such Debt Securities will be validly issued and will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect and subject
to general principles of equity regardless of whether considered in a
proceeding in equity or at law).
With respect to Preferred Shares, when both (A) the Board has taken
all necessary corporate action to approve the issuance and terms of the
Preferred Shares, the terms of the offering thereof and related matters,
including the adoption of a resolution of the Board relating to such Preferred
Shares and the filing of the resolution of the Board with the Registrar of
Corporations of the Province of Alberta, and (B) certificates representing the
Preferred Shares have been duly executed, countersigned, registered and
delivered either (i) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment of the
consideration therefor provided for therein or (ii) upon conversion or
exercise of any other Offered Security, in accordance with the terms of such
Offered Security or the instrument governing such Offered Security providing
for such conversion or exercise as approved by the Board, for the
consideration approved by the Board, then the Preferred Shares will be validly
issued, fully paid and nonassessable.
<PAGE>
Chieftain International, Inc. 3 October 8, 1999
With respect to Common Shares, when both (A) the Board has taken all
necessary corporate action to approve the issuance of and the terms of the
offering of the Common Shares and related matters and (B) certificates
representing the Common Shares have been duly executed, countersigned,
registered and delivered either (i) in accordance with the applicable
definitive purchase, underwriting or similar agreement approved by the Board
upon payment of the consideration therefor provided for therein or (ii) upon
conversion or exercise of any other Offered Security, in accordance with the
terms of such Offered Security or the instrument governing such Offered
Security providing for such conversion or exercise as approved by the Board,
for the consideration approved by the Board, then the Common Shares will be
validly issued, fully paid and nonassessable.
With respect to the Warrants, when (A) the Board has taken all
necessary corporate action to approve the creation of and the issuance and
terms of the Warrants, the terms of the offering thereof and related matters,
(B) the Warrant Agreement or Agreements relating to the Warrants have been
duly authorized and validly executed and delivered by the Company and the
warrant agent appointed by the Company and (C) the Warrants or certificates
representing the Warrants have been duly executed, countersigned, registered
and delivered in accordance with the appropriate Warrant Agreement or
Agreements and the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration therefor
provided for therein, the Warrants will be validly issued.
We are aware that we are referred to under the heading "Legal
Matters" in the prospectus forming a part of the Registration Statement, and
we hereby consent to such use of our name therein and to the use of this
opinion for filing with the Registration Statement as Exhibit 5.1 thereto. In
giving this consent, we do not hereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act or the
Rules and Regulations of the Commission promulgated thereunder.
Yours truly,
BENNETT JONES
By: /s/ John S. Burns
----------------------------
John S. Burns, Q.C.
Exhibit 5.2
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
(212) 474-1000
October 8, 1999
Chieftain International, Inc.
Ladies and Gentlemen:
We have acted as United States counsel to Chieftain International,
Inc., an Alberta, Canada, corporation (the "Company") in connection with the
registration under the Securities Act of 1933, as amended, of (i) debt
securities of the Company ("Debt Securities"), (ii) preferred shares of the
Company ("Preferred Shares"), (iii) Common Shares ("Common Shares") and (iv)
warrants ("Warrants") to purchase Debt Securities, Preferred Shares and Common
Shares of the Company, for an aggregate offering price not to exceed U.S.
$300,000,000, pursuant to the Registration Statement (the "Registration
Statement") filed with the Securities and Exchange Commission on the date
hereof on Form S-3.
In that connection, we have examined originals, or copies certified
or otherwise identified to our satisfaction, of such documents,corporate
records and other instruments as we have deemed necessary for the purposes of
this opinion, including the indenture (as defined in the Registration
Statement).
Based on the foregoing, we are of opinion as follows:
1. With respect to the indenture, assuming it has been duly
authorized, executed and delivered by the Company and the trustee and has been
duly qualified under the Trust Indenture Act of 1939, such indenture
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws affecting
<PAGE>
2
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered
in a proceeding at law or in equity).
2. With respect to Debt Securities, assuming the Debt Securities
have been duly authorized, executed and authenticated in accordance with the
provisions of the indenture, duly issued and delivered to and paid for in
accordance with the provisions of the indenture and the applicable definitive
purchase, underwriting or similar agreement and are in the forms filed as
exhibits to the Registration Statement, the Debt Securities will constitute
the legal, valid and binding obligations of the Company entitled to the
benefits of the indenture, enforceable against the Company in accordance with
their terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting creditors'
rights generally from time to time in effect to general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether considered in a proceeding at
law or in equity).
We are admitted to practice in the State of New York, and we express
no opinion as to matters governed by any laws other than the laws of the State
of New York and the federal laws of the United States of America. In
particular, we do not purport to pass on any matter governed by the laws of
Canada or any province thereof.
We are aware that we are referred to under the heading "Legal
Matters" in the Registration Statement, and we hereby consent (i) to the use
of our name in the
<PAGE>
3
Registration Statement and (ii) to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Cravath, Swaine & Moore
Chieftain International, Inc.
1201 TD Tower
10088 - 102 Avenue
Edmonton, Alberta T5J 2Z1
CANADA
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 4, 1999 relating to the
financial statements, which appears in Chieftain International, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1998. We also
consent to the references to us under the headings "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
------------------------------
Edmonton, Alberta, Canada PricewaterhouseCoopers LLP
October 8, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS
---------------------------------------------------------
We hereby consent to the use of the name Netherland, Sewell &
Associates, Inc. and references to Netherland, Sewell & Associates, Inc. and
to the inclusion or incorporation by reference of and references to our report,
or information contained therein, dated March 3, 1999, prepared for Chieftain
International, Inc. in this Registration Statement on Form S-3 of Chieftain
International, Inc.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ Frederic D. Sewell
----------------------
Frederic D. Sewell
President
Dallas, Texas
October 8, 1999
