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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of Earliest Event Reported)
DECEMBER 23, 1996
NUEVO ENERGY COMPANY NUEVO FINANCING I
(Exact name of registrant (Exact name of registrant as specified in its
as specified in its charter)
charter)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation) incorporation)
0-10537 N/A
(Commission File Number) (Commission File Number)
75-0304436 TO BE APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
331 LAMAR, SUITE 1650 1331 LAMAR, SUITE 1650
HOUSTON, TEXAS 77010 HOUSTON, TEXAS 77010
(Address of principal (Address of principal executive offices,
executive offices, including zip code)
including zip code)
(713) 652-0706 (713) 652-0706
(Registrant's telephone (Registrant's telephone number,
number, including area including area code)
code)
N/A N/A
(former name or former (former name or former address,
address, if changed from if changed from last report)
last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
Not applicable
ITEM 5. OTHER EVENTS
On November 15, 1996, Nuevo Energy Company, a Delaware corporation (the
"Company"), and Nuevo Financing I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), filed a Registration Statement on
Form S-3 (Registration No. 333-16231) with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), relating to, among other things, the registration under the Act of (a)
2,300,000 $2.875 Term Convertible Securities, Series A (the "TECONS"), of the
Trust to be sold by the Trust in a public offering, (b) the Company's 5.75%
Convertible Subordinated Debentures due December 15, 2026 (the "Convertible
Debentures") to be issued to the Trust, (c) the Company's guarantee of certain
obligations of the Trust to make distributions on the TECONS (the "Guarantee")
and (d) 2,138,605 shares of common stock, $.01 par value per share ("Common
Stock"), of the Company to be sold by United Investors Management Company
("United") and The 1818 Fund, L.P. (the "1818 Fund" and, together with United,
the "Selling Stockholders") in a public offering (such Registration Statement,
as amended and supplemented from time to time, is hereinafter referred to as the
"Registration Statement").
On December 23, 1996, the Company and the Trust closed the offering of
2,300,000 TECONS on behalf of the Trust (the "TECONS Offering") and the Company
and the Selling Stockholders closed the offering of 2,138,605 shares of Common
Stock (the "Shares") on behalf of the Selling Stockholders (the "Common Stock
Offering"). The TECONS were sold pursuant to an Underwriting Agreement dated
December 18, 1996 (the "TECONS Underwriting Agreement") between the Company, the
Trust and J.P. Morgan Securities Inc. and Salomon Brothers Inc (the "TECONS
Underwriters"). The Shares were sold pursuant to an Underwriting Agreement dated
December 18, 1996 (the "Common Stock Underwriting Agreement") between the
Company, the Selling Stockholders, J.P. Morgan Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation, Morgan Keegan & Company, Inc. and
PaineWebber Incorporated, as representatives of the several Common Stock
Underwriters (the "Common Stock Underwriters").
The Price to Public of the TECONS was $50.00 per TECONS and, pursuant to
the TECONS Underwriting Agreement, the Company paid the TECONS Underwriters, as
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compensation for their services, $1.375 per TECONS for an aggregate underwriting
compensation of $3,162,500. The TECONS were issued pursuant to the Trust's
Amended and Restated Declaration of Trust dated December 23, 1996, among the
Company, as Sponsor, Wilmington Trust Company, as Institutional Trustee and
Delaware Trustee, and Michael D. Watford, Robert L. Gerry, III and Robert M.
King, as Regular Trustees. Distributions on the TECONS ("Distributions") will
accumulate from December 23, 1996 and will be payable at an annual rate of
$2.875 per TECONS. Subject to the Distribution deferral provisions described in
the Registration Statement, Distributions will be payable quarterly in arrears
on each March 15, June 15, September 15 and December 15, commencing March 15,
1997.
Unless subject to prior redemption, each TECONS is convertible at any time
prior to the close of business on December 15, 2026 at the option of the holder
into shares of Common Stock at the rate of 0.8421 shares of Common Stock for
each TECONS (equivalent to a conversion price of $59.375 per share of Common
Stock), subject to adjustment in certain circumstances. In the event of any
liquidation of the Trust, holders will be entitled to receive $50 per TECONS
plus an amount equal to any accumulated and unpaid Distributions thereon to the
date of payment.
The sole assets of the Trust consist of $118,556,700 in original principal
amount of Convertible Debentures. The Convertible Debentures were issued
pursuant to a Subordinated Indenture dated as of November 25, 1996, between the
Company and Wilmington Trust Company, as Indenture Trustee, as supplemented by
the First Supplemental Indenture dated December 23, 1996. The ability of the
Trust to pay Distributions on the TECONS is solely dependent on the receipt of
interest payments from the Company on the Convertible Debentures. The
Convertible Debentures will mature on December 15, 2026, and will bear interest
at the rate of 5.75 % per annum, payable quarterly in arrears. So long as the
Company shall not be in default in the payment of interest on the Convertible
Debentures, the Company has the right to defer payments of interest on the
Convertible Debentures from time to time for successive periods not exceeding 20
consecutive quarters for each such period; provided, that no such period shall
extend beyond the stated maturity date of the Convertible Debentures. The
payment of principal and interest on the Convertible Debentures is subordinated
in right of payment to all Senior Indebtedness (as defined in the Registration
Statement) of the Company.
The Convertible Debentures are redeemable for cash, at the option of the
Company, in whole or in part, from time to time on or after December 15, 1999,
at the prices specified in the Registration Statement. Upon any redemption of
the Convertible Debentures, the TECONS will be redeemed.
The Guarantee was established by the Preferred Securities Guarantee
Agreement dated as of December 23, 1996, between the Company and Wilmington
Trust Company, as Guarantee Trustee. Pursuant to the Guarantee, the Company
irrevocably and unconditionally guaranteed, on a subordinated basis and to the
extent set forth in the Registration Statement, the payment in full of (i)
Distributions on the TECONS to the extent the Trust has funds available
therefor, (ii) the amount payable upon redemption of the TECONS to the extent
the Trust has funds available therefor and (iii) generally, the liquidation
preference of the TECONS to the extent the Trust has assets available for
distribution to holders of TECONS. The Guarantee is unsecured and is subordinate
and junior in right of payment to all other liabilities of the Company and ranks
pari passu in
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right of payment with the most senior preferred stock issued, from time to time,
if any, by the Company.
Pursuant to the Common Stock Offering, United sold 1,275,000 Shares and the
1818 Fund sold 863,605 Shares. The Price to Public of the Shares was $47.50
per share and the Underwriting Discount paid to the Common Stock Underwriters
was $2.375 per share, for an aggregate underwriting discount of $5,079,187. All
of the 1,275,000 Shares sold by United were outstanding and 112 of the Shares
sold by the 1818 Fund were outstanding prior to the Common Stock Offering. The
remaining 863,493 of the Shares sold by the 1818 Fund were issued upon
conversion of 11,220 shares of 7% Cumulative Convertible Preferred Stock, Series
A ("Preferred Stock"), of the Company. As a result of this conversion by United
of its shares Preferred Stock, there are no longer any shares of Preferred Stock
outstanding.
ITEM 6. REGISTRATION OF REGISTRANT'S DIRECTORS
Not applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable
(b) Pro forma Financial Information
Not applicable
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
1. Underwriting Agreement
1.1. Underwriting Agreement dated December 18, 1996, by and among the
Company, United Investors Management Company, The 1818 Fund, L.P., and
J.P. Morgan Securities Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Keegan & Company, Inc., and PaineWebber
Incorporated, as representatives of the several underwriters in the
Common Stock Offering.
1.2. Underwriting Agreement dated December 18, 1996, by and among the
Company, the Trust and J.P. Morgan Securities Inc. and Salomon
Brothers Inc.
2. Plan of acquisition, reorganization, arrangement, liquidation or
succession*
4. Instruments defining the rights of security holders, including
indentures
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4.1. Form of Amended and Restated Declaration of Trust dated December
23, 1996, among the Company, as Sponsor, Wilmington Trust Company, as
Institutional Trustee and Delaware Trustee, and Michael D. Watford,
Robert L. Gerry, III and Robert M. King, as Regular Trustees.
4.2. Form of Subordinated Indenture dated as of November 25, 1996,
between the Company and Wilmington Trust Company, as Indenture Trustee
4.3. Form of First Supplemental Indenture dated December 23, 1996,
between the Company and Wilmington Trust Company, as Indenture Trustee
4.4. Form of Preferred Securities Guarantee Agreement dated as of
December 23, 1996, between the Company and Wilmington Trust Company,
as Guarantee Trustee.
4.5. Form of Certificate representing TECONS (included as Exhibit A-1
to Exhibit 4.1 above).
16. Letter re change in certifying accountant*
17. Letter re director resignation*
20. Other documents or statements to security holders*
23. Consents of experts and counsel*
24. Power of attorney*
27. Financial Data Schedule*
99. Additional exhibits
99.1 Opinion of Butler & Binion, L.L.P.
________
* Inapplicable to this filing
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Not applicable
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, each registrant has duly caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.
Date: January 6, 1997
NUEVO ENERGY COMPANY, a Delaware corporation
By: /s/ Michael D. Watford
------------------------------------------------
Name: Michael D. Watford
Title: President, Chief Executive Officer
and Chief Operating Officer of
Nuevo Energy Company
Date: January 6, 1997
NUEVO FINANCING I, a Delaware business trust
By: NUEVO ENERGY COMPANY, as Sponsor
By: /s/ Michael D. Watford
------------------------------------------------
Name: Michael D. Watford
Title: President, Chief Executive Officer
and Chief Operating Officer of
Nuevo Energy Company
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EXHIBIT 1.1
NUEVO ENERGY COMPANY
1,860,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
December 18, 1996
J.P. Morgan Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Keegan & Company, Inc.
PaineWebber Incorporated
As Representatives of the several underwriters
listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
The selling stockholders named in Schedule II hereto (the "Selling
Stockholders"), propose to sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 1,860,000 shares of Common Stock, par value
$.01 per share ("Stock"), of Nuevo Energy Company, a Delaware corporation (the
"Company") (the "Underwritten Shares") and, for the sole purpose of covering
over-allotments in connection with the sale of the Underwritten Shares, at the
option of the Underwriters, up to an additional 278,605 shares of Stock (the
"Option Shares"). The Underwritten Shares and the Option Shares are herein
referred to as the "Shares".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a base prospectus, relating to the Shares and certain other
securities. The registration statement as amended at the time when it became
effective on November 25, 1996, including information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act, is referred to in this Agreement as the "Registration
Statement", and the base prospectus dated November 25, 1996, as supplemented by
the prospectus supplement relating to the Shares, in the
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form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Any reference
in this Agreement to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the effective date of the Registration Statement or the
date of such preliminary prospectus or the Prospectus, as the case may be, and
any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
The Selling Stockholders hereby agree with the Underwriters as follows:
1. The Selling Stockholders severally agree to sell the Underwritten
Shares to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Selling Stockholders the respective number
of Underwritten Shares set forth opposite such Underwriter's name in Schedule I
hereto at a purchase price per share (the "Purchase Price") of $45.125.
In addition, the Selling Stockholders severally agree to sell the Option
Shares to the several Underwriters as hereinafter provided, and the Underwriters
on the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from United Investors Management Company ("United")
up to 103,605 Option Shares and from The 1818 Fund, L.P. (the "1818 Fund") up to
175,000 Option Shares, in each case at the Purchase Price and for the sole
purpose of covering over-allotments (if any) in the sale of Underwritten Shares
by the several Underwriters; provided, however, that the Underwriters may
exercise such option granted by the 1818 Fund only if the Underwriters have
exercised in full such option granted by United.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggre gate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 9 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Selling Stockholders by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters may exercise the options to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by
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written notice from the Representatives to the Company and the Selling
Stockholders. Such notice shall identify which option is being exercised and
shall set forth the aggregate number of Option Shares as to which the option is
being exercised and the date and time when the Option Shares are to be delivered
and paid for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of such
notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Any such notice shall be given at least two
Business Days (as defined below) prior to the date and time of delivery
specified therein. If both of the options are exercised, they must provide for
the same delivery date.
2. The Selling Stockholders and the Company understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
the parties hereto have executed and delivered this Agreement, as in the
judgment of the Representatives is advisable, and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds, in the case of the Underwritten Shares, on December 23, 1996,
or at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives and the Selling Stockholders may
agree upon in writing or, in the case of the Option Shares, on the date and time
specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares, such payments to be made to the
accounts specified, no later than noon on the Business Day prior to the Closing
Date or the Additional Closing Date (each as defined below), by the Selling
Stockholders to the Representatives. The time and date of such payment for the
Underwritten Shares is referred to herein as the "Closing Date" and the time and
date for such payment for the Option Shares, if other than the Closing Date, are
herein referred to as the "Additional Closing Date." As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City or Houston, Texas.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Selling Stockholders. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of J.P. Morgan Securities Inc. set forth
above not later than 1:00 P.M., New York City time, on the Business Day prior to
the Closing Date or the Additional Closing Date, as the case may be.
4. (a) The Company represents and warrants to each Underwriter and the
Selling Stockholders that:
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(i) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information relating to (a)
any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives or (b) any Selling Stockholder furnished to the
Company in writing by such Selling Stockholder, in either case expressly
for use therein;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended
or supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to (a) any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives or (b) any Selling
Stockholder furnished to the Company in writing by such Selling
Stockholder, in either case expressly for use therein;
(iii) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and as of such time none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of
the Exchange Act, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
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(iv) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations and changes in their consolidated cash flows
for the periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein; and the pro forma financial information, and
the related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus has been prepared in accordance
with the applicable requirements of the Securities Act and the Exchange
Act, as applicable and is based upon good faith estimates and assumptions
believed by the Company to be reasonable, and the adjustments used therein
are appropriate to give pro forma effect to the transactions referenced
therein; such pro forma information has been prepared on a basis consistent
with such historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical transactions included or
incorporated by reference in the Registration Statement and the Prospectus;
the other financial and statistical information and data included or
incorporated by reference in the Registration Statement and the Prospectus,
historical and pro forma, are, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company;
(v) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth, incorporated by reference or
contemplated in the Prospectus; and except as set forth, incorporated by
reference or contemplated in the Prospectus, neither the Company nor any of
its subsidiaries has entered into any transaction or agreement (whether or
not in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(vi) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
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(vii) each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its jurisdiction
of incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the Company
and its subsidiaries taken as a whole; and all the outstanding shares of
capital stock of each corporate subsidiary of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable, and,
except for 20%, 50% and 27.88% of the outstanding shares of common stock of
Bright Star Gathering, Inc., Sepulveda Oil & Gas Company and The Los
Angeles Oil Company, respectively, and as otherwise set forth or
incorporated by reference in the Prospectus, are owned by the Company,
directly or indirectly, free and clear of all liens, encumbrances, security
interests and claims;
(viii) this Agreement has been duly authorized, executed and
delivered by the Company;
(ix) the Company has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal
matters to the description thereof set forth in the Prospectus, and all of
the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable and are
not subject to any preemptive or similar rights; and, except as described
or incorporated by reference in or contemplated by the Prospectus, there
are no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights, warrants or
options;
(x) at the Closing Date, the Shares to be sold to the Underwriters
hereunder will have been duly authorized, issued and are fully paid and
non-assessable and conform to the descriptions thereof in the Prospectus;
and the Shares are not subject to any preemptive or similar rights;
(xi) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its respective certificate of incorporation or by-laws or
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them or any of their respective properties is bound,
except for violations and defaults which individually and in the aggregate
are not
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<PAGE>
material to the Company and its subsidiaries taken as a whole; the
performance by the Company of its obligations under this Agreement and the
consummation of the transactions contemplated herein will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or the By-
laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company, its subsidiaries or any of their respective properties;
and no consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Shares or the consummation by the Company of
the transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(xii) other than as set forth, incorporated by reference or
contemplated in the Prospectus, there are no legal or governmental
investigations, actions, suits or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its
subsidiaries or any of their respective properties or to which the Company
or any of its subsidiaries is or may be a party or to which any property of
the Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries could,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xiii) the Company and its subsidiaries have good and indefeasible
title in fee simple to all items of real property and good and marketable
title to all personal property owned by them, in each case free and clear
of all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made or proposed to be
made of such property by the Company and its subsidiaries; and any property
held under lease by the Company and its subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made of
such property by the Company or its subsidiaries;
(xiv) no relationship, direct or indirect, exists between or among
the Company or any or its subsidiaries on the one hand, and the directors,
officers, stockholders,
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<PAGE>
customers or suppliers of the Company or any of its subsidiaries on the
other hand, which is required by the Securities Act to be described in the
Registration Statement and the Prospectus which is not so described or
incorporated by reference therein;
(xv) no person (other than the Selling Stockholders) has the right
to require the Company to register any securities for offering and sale
under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issue and sale of the Shares;
(xvi) the Company is not an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(xvii) the Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba;
(xviii) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act;
(xix) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been or
might reasonably be expected to be asserted or threatened against the
Company or any subsidiary;
(xx) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Common Stock;
(xxi) each of the Company and its subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, and neither the Company
nor any such subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance with all laws and regulations
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<PAGE>
relating to the conduct of its business as conducted as of the date hereof,
except where noncompliance with such laws and regulations would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(xxii) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or any
of its subsidiaries which are likely to have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(xxiii) the Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(xxiv) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xxv) each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company
or any of its affiliates for employees or former employees of the Company
and its affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended, ("Code"). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code has occurred with respect
to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan which is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA no
"accumulated funding deficiency" as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the
assets of
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<PAGE>
each such plan (excluding for these purposes accrued but unpaid
contributions) exceeded the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions;
(xxvi) the Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(xxvii) there is no document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed
as required. All such contracts to which the Company or any subsidiary is
a party have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the Company or
such subsidiary and are enforceable against the Company or such subsidiary
in accordance with the terms thereof, except as may be limited by
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting creditors' rights generally or the availability of
equitable remedies, regardless of whether such enforcement is considered in
a proceeding in equity or at law;
(xxviii) the Company maintains insurance policies currently in effect,
including levels of deductibles, that are customary in the oil and gas
industry. Such policies provide coverage for operations of the Company and
its subsidiaries in amounts and covering such risks as the Company believes
is necessary to conduct its business;
(xxix) neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any subsidiary
has made any payment of funds of the Company or any subsidiary or received
or retained any funds in violation of any law, rule or regulation;
(xxx) except as described or incorporated by reference in the
Prospectus, as of the date hereof, (i) all royalties, rentals, deposits and
other amounts due on the oil and gas properties of the Company have been
properly and timely paid, and no proceeds from the sale or production
attributable to the oil and gas properties of the Company are currently
being held in suspense by any purchaser thereof, except where such amounts
due could not, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole, and (ii) there are
no claims under take-or-pay contracts pursuant to which natural gas
purchasers have any make-up rights affecting the interests of the Company
in its oil and gas properties, except where such claims could not, singly
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<PAGE>
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(xxxi) except as described or incorporated by reference in the
Prospectus, as of the date hereof, the aggregate undiscounted monetary
liability of the Company for petroleum taken or received under any
operating or gas balancing and storage agreement relating to its oil and
gas properties that permits any person to receive any portion of the
interest of the Company in any petroleum or to receive cash or other
payments to balance any disproportionate allocation of petroleum could not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and
(xxxii) neither the Company nor any subsidiary of the Company is a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(b) Each Selling Stockholder represents and warrants to, and agrees
with, the Underwriters and the Company that:
(i) except as required by the Act or state securities or Blue sky
laws, all consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and
for the sale and delivery of the Shares to be sold by such Selling
Stockholder have been obtained; such Selling Stockholder has full power and
authority to enter into this Agreement and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholders hereunder; and
this Agreement has been duly authorized, executed and delivered by such
Selling Stockholder;
(ii) the execution, delivery and performance of this Agreement by
such Selling Stockholder, the sale of the Shares and the consummation by
such Selling Stockholder of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is
bound, or to which any of the property or assets of such Selling
Stockholder is subject, or any statute or any order, rule or regulation of
any court or governmental agency having jurisdiction over such Selling
Stockholder or its property;
(iii) at the time of delivery of the Shares, such Selling Stockholder
will have good and valid title to the Shares to be sold by such Selling
Stockholder on the Closing Date or the Additional Closing Date, as the case
may be, free and clear of all liens, encumbrances, equities or claims
(other than the interests of the Underwriters under this Agreement); and,
upon delivery of such Shares and payment therefor pursuant hereto, good and
valid title to such Shares, free and clear of all liens, encumbrances,
equities or
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<PAGE>
claims, will pass to the Underwriters;
(iv) for a period of 90 days after the date hereof, such Selling
Stockholder shall not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer,
dispose of, directly or indirectly, any shares of Stock or any securities
convertible into or exercisable or exchangeable for stock, without the
prior written consent of J.P. Morgan Securities Inc.;
(v) such Selling Stockholder does not have any knowledge without
independent investigation that the Registration Statement or the Prospectus
(or any amendment or supplement thereto) contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(vi) such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price or any security of the Company
to facilitate the sale or resale of the Shares.
5. The Company covenants and agrees with each of the several Underwriters
as follows:
(a) to use its best efforts, if required, to file the final
Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act and to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares; and to furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 a.m., New
York City time, on the Business Day next succeeding the date of this
Agreement in such quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives
five signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a
conformed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case without exhibits but including the
documents incorporated by reference therein and, during the period
mentioned in paragraph 5(e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements thereto)
and documents incorporated by refer ence therein as the Representatives may
reasonably request;
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<PAGE>
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the Representatives
a copy of the proposed amendment or supplement for review and not to file
any such proposed amendment or supplement to which the Representatives
reasonably object;
(d) to advise the Representatives promptly, and to confirm such
advice in writing (i) when any amendment to the Registration Statement has
been filed or becomes effective, (ii) when any supplement to the Prospectus
or any amended Prospectus has been filed and to furnish the Representatives
with copies thereof, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus or the Prospectus or the initiation or
threatening of any proceeding for that purpose, (v) of the occurrence of
any event, within the period referenced in paragraph 5(e) below, as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, and (vi) of the receipt by the Company of any notification
with respect to any suspension of the qualification of the Shares for offer
and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order, or of any order preventing or suspending
the use of any preliminary prospectus or the Prospectus, or of any order
suspending any such qualification of the Shares, or notification of any
such order thereof and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Representatives will furnish to the Company) to which Shares may have
been sold by the Representatives on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representatives
shall reasonably request and to
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<PAGE>
continue such qualification in effect so long as reasonably required for
distribution of the Shares; provided that the Company shall not be required
to file a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
(h) for five years following the Closing Date, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) for a period of 90 days after the date hereof, not to (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, without the prior written consent of J.P.
Morgan Securities Inc.; provided that, notwithstanding the foregoing,
during such period (A) the Company may issue the $2.875 Term Convertible
Securities, Series A ("TECONS"), the 5.75% Convertible Subordinated
Debentures due December 15, 2026 (the "Convertible Debentures") and the
Guarantee of the TECONS, (B) the Company may issue Stock upon conversion of
any TECONS or Convertible Debentures, (C) the Company may issue Stock
pursuant to existing stock incentive plans, (D) the Company may issue Stock
upon conversion of the 7% Cumulative Convertible Preferred Stock and (E)
the Company may issue Stock or other rights to acquire Stock as
consideration for acquired businesses, provided any such shares or rights
are subject to resale restrictions equivalent to those held by directors of
the Company;
(j) to use its best efforts to maintain the listing of the Shares on
the New York Stock Exchange (the "Exchange");
(k) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, issuance, execution and
delivery of the Shares, (ii) incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all
exhibits,
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<PAGE>
amendments and supplements thereto), (iii) incurred in connection with the
registration or qualification of the Shares under the laws of such
jurisdictions as the Representatives may designate (including fees of
counsel for the Underwriters and its disbursements), (iv) in connection
with the listing of the Shares on the Exchange, (v) related to the filing
with, and clearance of the offering by, the National Association of
Securities Dealers, Inc., (vi) in connection with the printing (including
word processing and duplication costs) and delivery of this Agreement, the
preliminary and supplemental blue sky memoranda and the furnishing to the
Underwriters and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided, (vii) the
cost of preparing stock certificates, (ix) the cost and charges of any
transfer agent and any registrar and (x) the fees and expenses of the
Company's accountants, engineers and counsel to the Company and the Selling
Stockholders.
6. The several obligations of the Underwriters hereunder to purchase the
Shares on the Closing Date or the Additional Closing Date, as the case may be,
are subject to the performance by the Company and the Selling Stockholders of
their respective obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall be effective on the date hereof
(or if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become effective
not later than 5:00 p.m., New York City time, on the date hereof); and no
stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment shall be in effect, and no proceedings for
such purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall have
been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company and the Selling
Stockholders contained herein are true and correct on and as of the Closing
Date or the Additional Closing Date, as the case may be, as if made on and
as of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied with all agreements and all conditions
on its part to be performed or satisfied hereunder at or prior to the
Closing Date or the Additional Closing Date, as the case may be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of or guaranteed by
the Company by any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
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<PAGE>
(d) since the respective dates as of which information is given in
the Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus, the effect of which in
the judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus; and neither the
Company nor any of its subsidiaries has sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of
an executive officer of the Company, with specific knowledge about the
Company's financial matters, satisfactory to the Representatives to the
effect set forth in subsections (a) through (d) (with respect to the
respective representations, warranties, agreements and conditions of the
Company) of this Section and to the further effect that there has not
occurred any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, from that set forth or contemplated in the Registration Statement;
(f) Butler & Binion, L.L.P., counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material adverse effect on the Company
and its
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<PAGE>
subsidiaries, taken as a whole;
(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorpora tion with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in
good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and the Company is the sole
record owner, directly or indirectly, of all of the capital stock or
equity interest, as the case may be, of each of its subsidiaries,
other than Bright Star Gathering, Inc., of which the Company owns 80%
of the outstanding shares of common stock;
(iv) other than as set forth or contemplated in the Prospectus,
to the best of such counsel's knowledge, there are no legal or
governmental investigations, actions, suits or proceedings pending or
threatened against or affecting the Company or any of its subsidiaries
or any of their respective properties or to which the Company or any
of its subsidiaries is or may be a party or to which any property of
the Company or its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole; to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threat ened
by others; and such counsel does not know of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement that are not described or
filed as required;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof
contained in the Prospectus;
(vii) all of the issued shares of capital stock of the Company
(including the Shares being delivered to the Underwriters on the
Closing Date or the Additional Closing Date, as the case may be,
against payment therefor in accordance with the Agreement) have been
duly authorized and are validly issued,
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fully paid and non-assessable;
(viii) the statements in the Prospectus under "Description of
Capital Stock," "Certain Anti-Takeover Provisions" and "Underwriting,"
and in the Registration Statement in Item 15, insofar as such
statements constitute a summary of the terms of the Stock, legal
matters or documents or proceedings referred to therein, when taken
together with information incorporated by reference therein, fairly
present the information called for with respect to such terms, legal
matters, documents or proceedings in all material respects;
(ix) the Registration Statement and the Prospectus and any
amendments and supplements thereto (other than the financial
statements and related schedules therein and other financial and
statistical data, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Securities Act and nothing has come to such counsel's attention
that would cause them to believe that (other than the financial
statements and related schedules therein and other financial and
statistical data, as to which such counsel need express no belief) the
Registration Statement did not contain any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus, as amended or supplemented, if
applicable, does not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(x) the performance by the Company of its obligations under
this Agreement and the consummation of the transactions contemplated
herein will not result in a breach of or a default under, any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or, to the best of such counsel's knowledge, any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their respec
tive properties (except that such counsel need express no opinion as
to securities or anti-fraud laws);
(xi) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the sale of the Shares or the
consummation of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the
Securities
-18-
<PAGE>
Act and as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(xii) the Company is not an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act;
(xiii) the documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to the Closing Date or the Additional Closing Date, as the case
may be, (other than the financial statements and related schedules
therein and other financial and statistical data, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe that any of
such documents, when such documents became effective or were so filed,
as the case may be contained, in the case of a registration statement
which became effective under the Securities Act, an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xiv) the Registration Statement has become effective under the
Securities Act, and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending under the Securities Act.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of Texas, Delaware and New York, to the extent such counsel
deems proper and to the extent speci fied in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (B) as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon.
-19-
<PAGE>
With respect to the matters to be covered in subparagraphs (ix) and (xiii)
above counsel may state their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto (other than the
documents incorporated by reference therein) and review and discussion of
the contents thereof (including the documents incorporated by reference
therein) but is without independent check or verification except as
specified.
The opinion of Butler & Binion, L.L.P. described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(g) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the 1818
Fund, shall have furnished to the Representatives their written opinion
dated the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Representatives, to the effect
that:
(i) this Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and compliance with all of the
provisions of this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound
or to which any of the property or assets of such Selling Stockholder
is subject, or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder,
except for any such breach, violation or default which would not,
individually or in the aggregate, have a material adverse effect on
the business, assets, or financial condition of such Selling
Stockholder or the ability of such Selling Stockholder to consummate
the sales of the Shares;
(ii) no consent, approval, authorization or order of any court
or governmental agency or body of the U.S., State of New York or the
Delaware Revised Uniform Limited Partnership Act is required for the
consummation of the transactions contemplated by this Agreement in
connection with the sale of the Shares hereunder except (A) the
registration of the Shares under the Securities Act, (B) such as may
be required under state or foreign securities or blue sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters and (C) such approval of the underwriting arrangements as
may be required under the rules of the NASD;
(iii) such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver such Shares hereunder;
and
(iv) upon delivery of the Shares on behalf of the Selling
Stockholder
-20-
<PAGE>
and upon payment therefor by the Underwriters pursuant to this
Agreement, good and valid title to the Shares to be sold by such
Selling Stockholders, free and clear of all liens, encumbrances,
equities or claims, will be transferred to the Underwriters to the
extent the Underwriters have purchased such Shares in good faith and
without notice of any such lien, encumbrance, equity or claim or any
other adverse claim within the meaning of the Uniform Commercial Code;
(h) Carol A. McCoy, Associate Counsel of Torchmark Corporation, the
parent of United, shall have furnished to the Representatives her written
opinion dated the Closing Date or the Additional Closing Date, as the case
may be, in form and substance satisfactory to the Representatives, to the
effect that:
(i) this Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and compliance with all of the
provisions of this Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound
or to which any of the property or assets of such Selling Stockholder
is subject, or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder,
except for any such breach, violation or default which would not,
individually or in the aggregate, have a material adverse effect on
the business, assets, or financial condition of such Selling
Stockholder or the ability of such Selling Stockholder to consummate
the sales of the Shares;
(ii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
sale of the Shares hereunder except such as have been obtained under
the Securities Act and such as may be required under state or foreign
securities or blue sky laws in connection with the purchase and
distribution of such Shares by the Underwriter and such approval of
the underwriting arrangements as may be required under the rules of
the NASD;
(iii) such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver such Shares hereunder;
and
(iv) upon delivery of the Shares on behalf of the Selling
Stockholder and upon payment therefor by the Underwriters pursuant to
the Underwriting Agreement, good and valid title to the Shares to be
sold by such Selling Stockholders, free and clear of all liens,
encumbrances, equities or claims, will be transferred to the
Underwriters to the extent the Underwriters have purchased such
-21-
<PAGE>
Shares in good faith and without notice of any such lien, encumbrance,
equity or claim or any other adverse claim within the meaning of the
Uniform Commercial Code;
(i) on the date of the Prospectus and the effective date of the most
recently filed post-effective amendment to the Registration Statement and
also on the Closing Date or Additional Closing Date, as the case may be,
KPMG Peat Marwick LLP shall have furnished to the Representatives letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(j) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Vinson &
Elkins L.L.P., counsel to the Underwriters, with respect to the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(k) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall be listed on the New York Stock
Exchange;
(l) on or prior to the Closing Date or Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives
such further certificates and documents as the Representatives shall
reasonably request; and
(m) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between the Representatives and certain executive
officers and directors of the Company relating to sales and certain other
dispositions of shares of Stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date or Additional Closing Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Shares and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or
-22-
<PAGE>
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to (a) any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives or (b) any Selling Stockholder furnished
to the Company in writing by such Selling Stockholder, in either case expressly
for use therein; provided, that if any preliminary prospectus or the Prospectus
contained any alleged untrue statement of a material fact or allegedly omitted
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and such statement or omission shall have been corrected in
a revised preliminary prospectus or in the Prospectus (as amended or
supplemented), the Company shall not be liable to any Underwriter pursuant to
this paragraph with respect to such alleged untrue statement or alleged omission
to the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the revised preliminary prospectus or the Prospectus as so
amended or supplemented, as the case may be, containing a correction that cures
such alleged misstatement or omission, if the Company has timely provided copies
of such corrected preliminary prospectus or Prospectus to the Underwriters in
accordance with Section 5(b) hereof.
Each Selling Stockholder agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists such Underwriter in
the distribution of the Shares and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any preliminary
prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly for use therein.
Notwithstanding the foregoing, in no event shall such Selling Stockholder be
required to pay an amount in indemnification under this paragraph 7 in excess of
the net proceeds before deducting expenses at which the Shares sold by such
Selling Stockholder were offered to the public.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and each Selling
Stockholder to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment
-23-
<PAGE>
or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to any of the three
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceed ing,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such control persons of Underwriters shall be designated in writing by J.P.
Morgan Securities Inc. Any such separate firm for the Company, its directors,
its officers who sign the Registration Statement and such control persons of the
Company and for the Selling Stockholders shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first, second or third
paragraphs of this Section
-24-
<PAGE>
7 is unavailable to an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by the Selling
Stockholders and the total underwriting discounts and the commissions received
by the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Shares. The
relative fault of the Company and the Selling Stockholders on the one hand and
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall
an Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section ll(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
-25-
<PAGE>
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company and the Selling Stockholders
set forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any other person
controlling the Company and the Selling Stockholders and (iii) acceptance of and
payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Stockholders, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of any post-effective amendment to the Registration Statement by
the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to
-26-
<PAGE>
purchase Shares which it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares with respect to which such default occurs is
more than one-tenth of the aggre gate number of Shares to be purchased on such
date, and arrangements satisfactory to the Representatives, the Company and the
Selling Stockholders for the purchase of such Shares are not made within 36
hours after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Shares, as the case may be) shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
any Selling Stockholder. In any such case either you or the Selling Stockholders
shall have the right to postpone the Closing Date (or, in the case of the Option
Shares, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company or the Selling Stockholders shall be unable to perform
their respective obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Company agrees to reimburse
the Under writers or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and expenses of its counsel) reason ably incurred by the Underwriter in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters and the Selling Stockholders, any controlling persons
of the Company referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Shares from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260 (telefax: (212) 648-5705); Attention: Syndicate Department. Notices
to the Company shall be given to it at 1331 Lamar, Suite 1650, Houston, Texas
77010 (telefax: (713) 756-1744), Attention: Michael D. Watford. Notices to The
1818 Fund, L.P. shall be given to it at c/o Brown Brothers Harriman, 59 Wall
Street, New York, New York 10005 (telefax: (212) 493-8429), Attention: Walter
Grist, and notices to United Investors Management Company shall be given to it
at c/o Torchmark
-27-
<PAGE>
Corporation, 2001 Third Avenue, South, Birmingham, Alabama 85233 (telefax: (205)
325-4198), Attention: Duncan Hamilton.
-28-
<PAGE>
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
NUEVO ENERGY COMPANY
By: /s/ Michael D. Watford
----------------------
Name: Michael D. Watford
Title: President & Chief Executive Officer
THE SELLING STOCKHOLDERS:
THE 1818 FUND, L.P.
By: /s/ Lawrence C. Tucker
----------------------
Name: Lawrence C. Tucker
Title: Partner, Brown Brothers Harriman & Co.
as General Partner of The 1818 Fund,
L.P.
UNITED INVESTORS MANAGEMENT
COMPANY
By: /s/ Carol A. McCoy
------------------
Name: Carol A. McCoy
Title: Assistant Secretary
-29-
<PAGE>
Accepted: December 18, 1996
J.P. MORGAN SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN KEEGAN & COMPANY, INC.
PAINEWEBBER INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters listed in
Schedule I hereto
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto
By: /s/ Ferrell P. McLean
----------------------------
Name: Ferrell P. McClean
Title: Managing Director
-30-
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
- ----------- -------------------
UNDERWRITER NUMBER OF
UNDERWRITTEN SHARES
TO BE PURCHASED
<S> <C>
J.P. Morgan Securities Inc.............. 340,000
Donaldson, Lufkin & Jenrette Securities 340,000
Corporation.............................
Morgan Keegan & Company, Inc............ 340,000
PaineWebber Incorporated................ 340,000
BT Securities Corporation............... 50,000
A.G. Edwards & Sons, Inc................ 50,000
Lehman Brothers Inc..................... 50,000
Smith Barney Inc........................ 50,000
Howard, Weil, Labouisse, Friedrichs Inc. 50,000
Jefferies & Company, Inc................ 50,000
Johnson Rice & Company L.L.C............ 50,000
Petrie Parkman & Co., Inc............... 50,000
Principal Financial Securities, Inc..... 50,000
Rauscher Pierce Refsnes, Inc............ 50,000
-------------------
Total......................... 1,860,000
===================
</TABLE>
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
- ------------------- ------------
SELLING STOCKHOLDER NUMBER OF
UNDERWRITTEN
SHARES TO BE
SOLD
<S> <C>
United Investors Management Company............................ 1,171,395
The 1818 Fund, L.P............................................. 688,605
---------
Total................................................ 1,860,000
- --------------------------------------------------------------------=========
</TABLE>
<PAGE>
EXHIBIT A
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LOCK-UP AGREEMENT
December ___, 1996
J.P. Morgan Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Keegan & Company, Inc.
PaineWebber Incorporated
As Representatives of the several Underwriters
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
J.P. Morgan Securities Inc.
Salomon Brothers Inc
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Ladies and Gentlemen:
The undersigned understands that certain of you propose to enter into (i)
an Underwriting Agreement (the "TECONS Underwriting Agreement") with Nuevo
Financing I, a statutory business trust created under the laws of the State of
Delaware (the "Trust") and Nuevo Energy Company, a Delaware corporation (the
"Company"), providing for the public offering (the "TECONS Public Offering") by
you of 2,000,000 of the Trust's $_____ Term Convertible Securities, Series A and
up to an additional 300,000 of the Trust's $_____ Term Convertible Securities,
Series A, solely to cover over-allotments (collectively, the "TECONS") and (ii)
an Underwriting Agreement (the "Common Stock Underwriting Agreement" and,
together with the TECONS Underwriting Agreement, the "Underwriting Agreements")
with the Company, The 1818 Fund, L.P. and United Investors Management Company
(the "Selling Stockholders") providing for the public offering (the "Common
Stock Public Offering" and, together with the TECONS Public Offering, the
"Public Offerings") by you of 1,860,000 shares of the common stock $.01 par
value, of the Company (the "Nuevo Common Stock"), and up to an aggregate of
278,605 additional shares of Common Stock, solely to cover over-allotments.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreements.
In consideration of your agreement to purchase and make the Public
Offerings, and for other good and valuable consideration receipt of which is
hereby acknowledged, the undersigned
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hereby agrees that, without the prior written consent of J.P. Morgan Securities
Inc. on your behalf, the undersigned will not, during the period ending 90 days
after the date of the prospectus supplement relating either to the TECONS or the
Common Stock (the "Prospectus"), (1) offer, pledge to sell, file a registration
statement relating to, announce the intention to sell, sell, issue, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any Nuevo Common Stock or any securities
convertible into or exercisable or exchangeable for Nuevo Common Stock
(including, without limitation, Nuevo Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant), or (2) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Nuevo Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Nuevo Common Stock or such other securities, in cash or otherwise.
Notwithstanding the preceding paragraph, this lock-up agreement shall not
prohibit any transfer or other disposition by the undersigned involving any of
the following: (1) a transfer or disposition of shares of Nuevo Common Stock to
his or her spouse, siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which such family members or the
undersigned retains the entire beneficial interest; (2) a transfer or
disposition of shares of Nuevo Common Stock on his or her death to the
undersigned's estate, executor, administrator or personal representative or to
the undersigned's beneficiaries pursuant to a devise or bequest or by the laws
of descent and distribution; (3) a transfer or disposition of shares of Nuevo
Common Stock as a bona fide gift; and (4) a pledge of Nuevo Common Stock as
collateral, to a banking institution; provided, in each case, that the
transferee, pledgee or other person receiving such shares shall agree to all of
the restrictions set forth in this lock-up agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this lock-up agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred to or agreed to be conferred and any obligations of the undersigned
shall be binding upon the successors and assigns of the undersigned.
In furtherance of the foregoing, the Company, the Trust, and any duly
appointed transfer agent for the registration or transfer of the securities
described herein, are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this lock-
up agreement.
The undersigned understands that, if both Underwriting Agreements do not
become effective, or if both Underwriting Agreements (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the TECONS and the Common Stock, the undersigned
shall be released from all obligations to you under this lock-up agreement.
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This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreements and proceeding with the Public Offerings in reliance
upon this letter agreement. The undersigned agrees that the provisions of this
letter agreement shall also be binding upon the successors, assigns, heirs or
personal representatives of the undersigned, as the case may be.
Very truly yours,
By_________________________________
Name:
Title:
Accepted as of the date first set forth above:
J.P. MORGAN SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN KEEGAN & COMPANY, INC.
PAINEWEBBER INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters
By:__________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters
By:____________________________
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Name:
Title:
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EXHIBIT 1.2
UNDERWRITING AGREEMENT
NUEVO FINANCING I
2,000,000 TRUST PREFERRED SECURITIES
December 18, 1996
J.P. Morgan Securities Inc.
Salomon Brothers Inc
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Nuevo Financing I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), proposes to issue and sell to the several
Underwriters listed in Schedule I hereto (the "Underwriters") an aggregate of
2,000,000 of its $2.875 Term Convertible Securities, Series A (the "Underwritten
Trust Preferred Securities") and, for the sole purpose of covering over-
allotments in connection with the sale of the Underwritten Trust Preferred
Securities, up to an additional 300,000 of its $2.875 Term Convertible
Securities, Series A (the "Option Trust Preferred Securities"). The
Underwritten Trust Preferred Securities and the Option Trust Preferred
Securities are herein referred to as the "Trust Preferred Securities."
The Trust Preferred Securities will be guaranteed (the "Guarantee") by
Nuevo Energy Company, a Delaware corporation (the "Company"), to the extent
described in a Preferred Securities Guarantee Agreement to be dated as of the
Closing Date and will be convertible into the common shares, $.01 par value, of
the Company ("Nuevo Common Stock"). The Company will also be the holder of one
hundred percent of the common securities representing undivided beneficial
interests in the assets of the Trust (the "Trust Common Securities," and
together with the Trust Preferred Securities, the "Trust Securities"). The
Trust will use the proceeds from the sale of the Trust Securities to purchase
from the Company an equal aggregate principal amount of its 5.75% Convertible
Subordinated Debentures due December 15, 2026 (the "Convertible Debentures") to
be issued under a subordinated debenture (the "Base Indenture") dated as of
November 25, 1996 between the Company and Wilmington Trust Company, as trustee
(the "Indenture Trustee"), as supplemented by the First Supplemental Indenture
to be dated as of the Closing Date (the "Supplemental Indenture," and together
with the Base Indenture, the "Indenture"). The Trust has been created and
continued under Delaware law pursuant to an Amended and Restated Declaration of
Trust (the "Declaration") to be executed by the Company
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and by the trustees of the Trust (the "Nuevo Trustees"), all of whom have been
appointed by the Company, as holder of one hundred percent of the Trust Common
Securities. A majority of the Nuevo Trustees (the "Regular Trustees") are
persons who are employees or officers of or affiliated with the Company. One
Nuevo Trustee, Wilmington Trust Company, is unaffiliated with the Company and
shall act as institutional trustee ("Institutional Trustee") and as Indenture
Trustee for the purposes of the Trust Indenture Act of 1939 (the "Trust
Indenture Act").
The Company and the Trust have prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a base prospectus, relating to the Trust Preferred
Securities. The registration statement as amended at the time when it became
effective on November 25, 1996, including information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act, is referred to in this Agreement as the "Registration
Statement," and the base prospectus dated November 25, 1996, as supplemented by
the prospectus supplement relating to the Trust Preferred Securities, in the
form first used to confirm sales of Securities is referred to in this Agreement
as the "Prospectus." If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such preliminary prospectus or the Prospectus, as the case may
be, and any reference to "amend," "amendment" or "supplement" with respect to
the Registration Statement, any preliminary prospectus or the Prospectus shall
be deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
Each of the Trust and the Company hereby agree with the Underwriters as
follows:
1. The Trust agrees to issue and sell the Underwritten Trust Preferred
Securities to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties of the Trust
and the Company herein contained, but subject to the conditions hereinafter
stated, agrees to purchase, severally and not jointly, from the Trust the
respective number of Underwritten Trust Preferred Securities set forth opposite
such Underwriter's name in Schedule I hereto, at a purchase price per
Underwritten Trust Preferred Security (the "Purchase Price") of $50.00.
In addition, the Trust agrees to issue and sell the Option Trust Preferred
Securities to the several Underwriters as hereinafter provided, and each
Underwriter, on the basis of the representations and warranties of the Trust and
the Company herein contained, but subject to the conditions hereinafter stated,
shall have the option to purchase, severally and not jointly, from
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the Trust up to an aggregate of 300,000 Option Trust Preferred Securities at the
Purchase Price plus accumulated Distributions, if any, from December 23, 1996,
for the sole purpose of covering over-allotments (if any) in the sale of the
Underwritten Trust Preferred Securities by the several Underwriters.
If the Option Trust Preferred Securities are to be purchased, the number of
Option Trust Preferred Securities to be purchased by each Underwriter shall be
the number of Option Trust Preferred Securities which bears the same ratio to
the aggregate number of Option Trust Preferred Securities being purchased as the
number of Underwritten Trust Preferred Securities set forth opposite the name of
such Underwriter in Schedule I hereto bears to the aggregate number of
Underwritten Trust Preferred Securities being purchased from the Trust by the
several Underwriters, subject, however, to such adjustments to eliminate any
fractional Trust Preferred Securities as the Underwriters in their sole
discretion shall make.
The Underwriters may exercise the option to purchase the Option Trust
Preferred Securities at any time (but not more than once) on or before the
thirtieth day following the date of this Agreement, by written notice from the
Underwriters to the Trust. Such notice shall set forth the aggregate number of
Option Trust Preferred Securities as to which the Option is being exercised and
the date and time when the Option Trust Preferred Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of such
notice. Any such notice shall be given at least two Business Days prior to the
date and time of delivery specified therein.
2. The Trust and the Company understand that the Underwriters intend (i)
to make a public offering of the Trust Preferred Securities as soon after the
parties hereto have executed and delivered this Agreement, as in the judgment of
the Underwriters is advisable, and (ii) initially to offer the Trust Preferred
Securities upon the terms set forth in the Prospectus.
3. Payment for the Trust Preferred Securities shall be made by wire
transfer in immediately available funds, to the account specified by the Trust
to the Underwriters no later than noon the Business Day (as defined below) prior
to the Closing Date (as defined below), in the case of the Underwritten Trust
Preferred Securities, on December 23, 1996, or at such other time on the same or
such other date, not later than the fifth Business Day thereafter, as the
Underwriters and the Trust may agree upon in writing or, in the case of the
Option Trust Preferred Securities, on the date and time specified by the
Underwriters in the written notice of the Underwriters' election to purchase
such Option Trust Preferred Securities. The time and date of such payment for
the Underwritten Trust Preferred Securities is referred to herein as the
"Closing Date," and the time and date of such payment for the Option Trust
Preferred Securities, if other than the Closing Date, is referred to herein as
the "Additional Closing Date." As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City or Houston, Texas.
Payment for the Trust Preferred Securities to be purchased on the Closing
Date or the
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Additional Closing Date, as the case may be, shall be made against delivery to
the Underwriters for the respective accounts of the several Underwriters of the
Trust Preferred Securities to be purchased on such date registered in such names
and in such denominations as the Underwriters shall request in writing not later
than two full Business Days prior to the Closing Date or the Additional Closing
Date, as the case may be, with any transfer taxes payable in connection with the
transfer to the Underwriters of the Trust Preferred Securities duly paid by the
Company. The certificates for the Trust Preferred Securities will be made
available for inspection and packaging by the Underwriters at the office of J.P.
Morgan Securities Inc. set forth above not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date or the Additional Closing
Date, as the case may be.
As compensation to the Underwriters for their commitments hereunder, the
Company on the Closing Date or the Additional Closing Date, as the case may be,
will pay, or cause to be paid, to J.P. Morgan Securities Inc., for the accounts
of the several Underwriters, an amount equal to $1.375 per Trust Preferred
Security for the Trust Preferred Securities to be delivered by the Trust
hereunder on the Closing Date or the Additional Closing Date, as the case may
be. The Company will pay or cause to be paid such commission payable to the
order of J.P. Morgan Securities Inc. in immediately available funds to the
account specified by J.P. Morgan Securities Inc. no later than noon the Business
Day prior to the Closing Date or the Additional Closing Date, as the case may
be.
4. Each of the Trust and the Company jointly and severally represent and
warrant to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Trust and the Company in writing by such
Underwriter expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of each of the Trust and the Company,
threatened by the Commission; and the Registration Statement and Prospectus
(as amended or supplemented if the Trust or the Company shall have
furnished any amendments or supplements thereto) comply, or will comply, as
the case may be, in all material respects with the Securities Act and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto, contain any untrue
statement of a material fact or omit to state any
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material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, as of the date of the Prospectus and any
amendments or supplements thereto and at the Closing Date or the Additional
Closing Date, as the case may be, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing representations
and warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Trust or the Company in writing by such Underwriter expressly for use
therein;
(c) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and as of such time none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of
the Exchange Act, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(d) the financial statements, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly, the consolidated financial position of the
Company and the Company's consolidated subsidiaries as of the dates
indicated and the results of their operations and changes in their
consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly, the information required to be stated therein;
and the pro forma financial information, and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable requirements
of the Securities Act and the Exchange Act, as applicable, and is based
upon good faith estimates and assumptions believed by each of the Trust and
the Company to be reasonable, and the adjustments used therein are
appropriate to give pro forma effect to the transactions referenced
therein; such pro forma information has been prepared on a basis consistent
with such historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical transactions included or
incorporated by reference in the Registration Statement and the Prospectus;
the other financial and statistical information and data included or
incorporated by reference in the Registration Statement and the Prospectus,
historical and pro forma, are, in all material respects, accurately
presented and prepared on a basis
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consistent with such financial statements and the books and records of the
Company;
(e) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material change in the capital stock or long-term debt of the Company or
any of the Company's subsidiaries, or any material adverse change, or any
development reasonably likely to involve a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and the Company's subsidiaries taken as a whole,
otherwise than as set forth, incorporated by reference or contemplated in
the Prospectus; and except as set forth, incorporated by reference or
contemplated in the Prospectus, neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or not
in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(f) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(g) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which its
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and all of the outstanding shares of
capital stock of each corporate subsidiary of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and, except
for 20%, 50% and 27.88% of the outstanding common stock of Bright Star
Gathering, Inc., Sepulveda Oil & Gas Company and The Los Angeles Oil
Company, respectively, and as otherwise set forth or incorporated by
reference in the Prospectus, are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security interests
and claims;
(h) the Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, has the
trust power and authority to conduct its affairs as presently conducted and
as described in the Registration Statement and the Prospectus, and is not
required to be authorized to do business in any
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other jurisdiction; the Trust has not conducted any business, entered into
any agreements or incurred any debt or obligations other than the execution
of this Agreement and the consummation of the transactions contemplated
hereby;
(i) this Agreement has been duly authorized, executed and delivered
by the Trust and the Company;
(j) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company
and, assuming due authorization, execution and delivery thereof by the
Indenture Trustee, will be as of the Closing Date, a valid and binding
agreement of the Company, enforceable in accordance with its terms, subject
to bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity and public policy;
(k) the Declaration has been duly qualified under the Trust Indenture
Act and has been duly authorized by the Company and, upon execution and
delivery thereof by the Company, and assuming due authorization, execution
and delivery thereof by the Nuevo Trustees and the Institutional Trustee,
the Declaration will, as of the Closing Date or the Additional Closing
Date, as the case may be, be a valid and binding agreement of the Company,
the Nuevo Trustees and the Institutional Trustee, in each case enforceable
in accordance with its terms, subject to bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of
equity and public policy;
(l) the Guarantee has been duly qualified under the Trust Indenture
Act and has been duly authorized by the Company, and upon execution and
delivery thereof by the Company and assuming the due authorization,
execution and delivery thereof by the trustee under the Guarantee, the
Guarantee will, as of the Closing Date or the Additional Closing Date, as
the case may be, be a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to bankruptcy, insolvency
or similar laws affecting creditors' rights generally and to general
principles of equity and public policy;
(m) the Convertible Debentures have been duly authorized and, when
executed by the Company, authenticated by the Indenture Trustee, issued in
accordance with the Indenture and delivered to the Trust against payment
therefor as described in the Registration Statement and the Prospectus,
will constitute valid and binding obligations of the Company, enforceable
in accordance with their terms, subject to bankruptcy, insolvency or
similar laws affecting creditors' rights generally and to general
principles of equity and public policy;
(n) the Trust Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered in accordance with the terms of
this Agreement and the Declaration, will be validly issued undivided
beneficial interests in the assets of the Trust, and the issuance of such
Trust Preferred Securities will not be
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subject to any preemptive or similar rights. The Trust Common Securities to
be issued to the Company will be authorized by the Declaration and, when
executed in accordance with the terms of the Declaration and delivered to
the Company against payment therefor as described in the Registration
Statement and the Prospectus, will represent validly issued undivided
beneficial interests in the assets of the Trust;
(o) the shares of Nuevo Common Stock initially issuable upon the
conversion of the Convertible Debentures and the Trust Preferred Securities
have been duly authorized and reserved for issuance upon such conversion
and, when issued upon such conversion, will be duly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar rights;
(p) the Company has an authorized capitalization as set forth in the
Prospectus and the authorized capital stock conforms as to legal matters to
the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are not
subject to any preemptive or similar rights; and, except as described or
incorporated by reference in or contemplated by the Prospectus, there are
no outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights, warrants or
options;
(q) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its respective certificate of incorporation or by-laws or
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them or any of their respective properties is bound,
except for violations and defaults which individually and in the aggregate
are not material to the Company and the Company's subsidiaries, taken as a
whole; the issue and sale of the Trust Securities and the performance by
the Company of its obligations under this Agreement, the Declaration, the
Guarantee and the Indenture, the issuance and sale of the Convertible
Debentures, and the conversion of the Convertible Debentures and the Trust
Preferred Securities into Nuevo Common Stock, and the consummation of the
transactions contemplated herein will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over
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the Company, its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Trust Securities or the consummation
by the Company of the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses, registrations
or qualifications as have been obtained under the Securities Act and as may
be required under state securities or blue sky laws in connection with the
purchase and distribution of the Trust Securities by the Underwriters;
(r) the Trust is not, nor with the giving of notice or lapse of time
or both would it be, in violation of or in default under, the Declaration
or any other agreement or instrument to which the Trust is a party; the
issue and sale of the Trust Preferred Securities and the performance by the
Trust of its obligations under this Agreement, the Declaration and the
Guarantee and the consummation of the transactions contemplated herein will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any agreement or instrument to which the
Trust is a party or by which the Trust is bound, nor will any such action
result in any violation of the provisions of the Declaration or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of
its properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Trust Preferred
Securities or the consummation by the Trust of the transactions
contemplated by this Agreement, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as have
been obtained under the Securities Act and as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Trust Preferred Securities by the Underwriters;
(s) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceeds
pending or, to the knowledge of the Company, threatened against or
affecting the Trust, the Company or any of its subsidiaries or any of their
respective properties or to which the Trust, the Company or any of its
subsidiaries is or may be a party or to which any property of the Trust,
the Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Trust, the Company or any of the Company's
subsidiaries, could individually or in the aggregate reasonably be expected
to have a material adverse effect on the Trust or on the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(t) the Company and its subsidiaries have good and indefeasible title
in fee simple to all items of real property and good and marketable title
to all personal property
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<PAGE>
owned by them, in each case free and clear of all liens, encumbrances and
defects except such as are described or referred to in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any property held under lease by the
Company and its subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property by the
Company or its subsidiaries;
(u) no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus which is not
so described or incorporated by reference therein;
(v) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and
sale of the Trust Securities other than the Selling Stockholders described
in the Prospectus;
(w) the Trust is not, and after giving effect to the offering and
sale of the Trust Preferred Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the Company is not, and after giving
effect to the issuance of the Convertible Debentures and the application of
the proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company Act;
(x) the Company is not an "investment company" or entity "controlled"
by an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(y) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act;
(z) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate
located in Cuba;
(aa) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been
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<PAGE>
or might reasonably be expected to be asserted or threatened against the
Company or any subsidiary;
(bb) each of the Company and its subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, and neither the Company
nor any such subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date hereof,
except where noncompliance with such laws and regulations would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(cc) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(dd) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ee) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and
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<PAGE>
its subsidiaries, taken as a whole;
(ff) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, ("ERISA")
that is maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended, ("Code"). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code has occurred with respect
to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan which is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA no
"accumulated funding deficiency" as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeded the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions;
(gg) the Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(hh) there is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any subsidiary is a
party have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the Company or
such subsidiary and are enforceable against the Company or such subsidiary
in accordance with the terms thereof, except as may be limited by
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting creditors' rights generally or the availability of
equitable remedies, regardless of whether such enforcement is considered in
a proceeding in equity or at law;
(ii) the Company maintains insurance policies currently in effect,
including levels of deductibles, that are customary in the oil and gas
industry. Such policies provide coverage for operations of the Company and
its subsidiaries in amounts and covering such risks as the Company believes
is necessary to conduct its business;
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<PAGE>
(jj) neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any subsidiary
has made any payment of funds of the Company or any subsidiary or received
or retained any funds in violation of any law, rule or regulation;
(kk) except as described or incorporated by reference in the
Prospectus, as of the date hereof, (i) all royalties, rentals, deposits and
other amounts due on the oil and gas properties of the Company have been
properly and timely paid, and no proceeds from the sale or production
attributable to the oil and gas properties of the Company are currently
being held in suspense by any purchaser thereof, except where such amounts
due could not, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole, and (ii) there are
no claims under take-or-pay contracts pursuant to which natural gas
purchasers have any make-up rights affecting the interests of the Company
in its oil and gas properties, except where such claims could not, singly
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ll) except as described or incorporated by reference in the
Prospectus, as of the date hereof, the aggregate undiscounted monetary
liability of the Company for petroleum taken or received under any
operating or gas balancing and storage agreement relating to its oil and
gas properties that permits any person to receive any portion of the
interest of the Company in any petroleum or to receive cash or other
payments to balance any disproportionate allocation of petroleum could not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(mm) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Nuevo Common Stock; and
(nn) neither the Company nor any subsidiary of the Company is a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5. Each of the Trust and the Company covenants and agrees with each of
the several Underwriters as follows:
(a) to use its best efforts, if required, to file the final
Prospectus with the Commission within the time periods specified by Rule
424(b) and Rule 430A under the Securities Act and to timely file all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Trust Preferred Securities; and to furnish
copies of the Prospectus to the
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<PAGE>
Underwriters in New York City prior to 10:00 a.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such
quantities as the Underwriters may reasonably request;
(b) to deliver, at the expense of the Company, to the Underwriters
three (3) signed copies of the Registration Statement (as originally filed)
and each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a
conformed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case without exhibits but including the
documents incorporated by reference therein, and, during the period
mentioned in paragraph 5(e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements thereto)
and documents incorporated by reference therein as the Underwriters may
reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the Underwriters a
copy of the proposed amendment or supplement for review and not to file any
such proposed amendment or supplement to which the Underwriters reasonably
object;
(d) to advise the Underwriters promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration Statement has been
filed or becomes effective, (ii) when any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the Underwriters with
copies thereof, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus
or for any additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus or the initiation or threatening
of any proceeding for that purpose, (v) of the occurrence of any event,
within the period referenced in paragraph 5(e) below, as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, and (vi)
of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Trust Preferred Securities for offer
and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order, or of any order preventing or suspending
the use of any preliminary prospectus or the Prospectus, or of any order
suspending any such qualification of the Trust Preferred Securities, or
notification of any such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Trust Preferred Securities as in the opinion of counsel for
the Underwriters a
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<PAGE>
prospectus relating to the Trust Preferred Securities is required by law to
be delivered in connection with sales by the Underwriters or any dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Underwriters will furnish to the Company) to which Trust Preferred
Securities may have been sold by the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to endeavor to qualify the Trust Preferred Securities, the
Guarantee, the Convertible Debentures and the Nuevo Common Stock for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Underwriters shall reasonably request and to continue such qualification in
effect so long as reasonably required for distribution of the Trust
Preferred Securities; provided that neither the Company nor the Trust shall
be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Underwriters as soon as practicable an earnings statement of the Company
covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) for five years following the date hereof, to furnish to the
Underwriters copies of all reports or other communications (financial or
other) furnished to holders of the Trust Securities, and copies of any
reports and financial statements furnished to or filed with the Commission
or any national securities exchange;
(i) for a period of 90 days after the date hereof not to (x) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly,
any Nuevo Common Stock ("Stock") or any securities convertible into or
exercisable or exchangeable for Stock or (y) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction
described in clause (x) or (y) above is settled by delivery of Stock or
such other securities, in cash or otherwise, without the prior written
consent of J.P. Morgan Securities Inc.; provided that, notwithstanding the
foregoing, during such period (i) the Trust may sell the Trust Preferred
Securities to the Underwriters as contemplated hereunder, (ii) the Company
may sell the Convertible Debentures to the Trust as contemplated hereunder,
(iii) the Company may issue Stock upon conversion of any Convertible
Debentures, (iv) the Company may issue Stock
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<PAGE>
pursuant to existing stock incentive plans, (v) the Company may issue Stock
upon conversion of the 7% Cumulative Convertible Preferred Stock, and (vi)
the Company may issue Stock or other rights to acquire Stock as
consideration for acquired businesses, provided such shares or rights are
subject to resale restrictions equivalent to those held by directors of the
Company;
(j) to use its best efforts to list, subject to notice of issuance,
the Trust Preferred Securities on the New York Stock Exchange (the
"Exchange");
(k) to reserve and keep available at all times, free of preemptive
rights, Nuevo Common Stock for the purpose of enabling the Company to
satisfy any obligations to issue Nuevo Common Stock upon the conversion of
the Convertible Debentures and the Trust Preferred Securities; and
(l) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all costs and expenses incident to the performance of its obligations
hereunder, including, without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, issuance, execution and
delivery of the Trust Preferred Securities and the Convertible Debentures,
including any transfer taxes payable in connection with the transfer of
Trust Preferred Securities to the Underwriters, (ii) of the Company, its
counsel and its accountants incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification of the Trust Preferred Securities,
the Guarantee, the Convertible Debentures and the Nuevo Common Stock under
the laws of such jurisdictions as the Underwriters may designate (including
reasonable fees of counsel for the Underwriters and its disbursements),
(iv) in connection with the listing of the Trust Preferred Securities on
the Exchange, (v) related to the filing with, and clearance of the offering
by, the National Association of Securities Dealers, Inc., (vi) in
connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the preliminary and supplemental
blue sky memoranda and the furnishing to the Underwriters and dealers of
copies of the Registration Statement and the Prospectus, including mailing
and shipping, as herein provided, (vii) the cost of preparing security
certificates, (viii) the cost and charges of any transfer agent and any
registrar, (ix) the fees and expenses of the Trustee and the reasonable
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Convertible Debentures, and (x) the fees and expenses
associated with obtaining ratings for the Trust Preferred Securities from
nationally recognized statistical rating organizations.
6. The several obligations of the Underwriters hereunder to purchase the
Trust Preferred Securities on the Closing Date or the Additional Closing Date,
as the case may be, are subject to the performance by the Company and the Trust
of their respective obligations
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<PAGE>
hereunder and to the following additional conditions:
(a) the Registration Statement shall be effective on the date hereof
(if a post-effective amendment is required to be filed by the Securities
Act, such post-effective amendment shall have become effective not later
than 5:00 p.m., New York City time, on the date hereof) and no stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the Commission; the Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and
regulations under the Securities Act and in accordance with Section 5(a)
hereof; and all requests for additional information shall have been
complied with to the satisfaction of the Underwriters;
(b) the representations and warranties of the Trust and the Company
contained herein are true and correct on and as of the Closing Date or the
Additional Closing Date, as the case may be, as if made on and as of the
Closing Date or the Additional Closing Date, as the case may be, and the
Trust and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date or the Additional Closing Date, as the case may be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of or guaranteed by
the Company or the Trust by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(d) since the respective dates as of which information is given in
the Prospectus there shall not have been any material change in the capital
stock or long-term debt of the Trust, the Company or any of the Company's
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management financial position, stockholders' equity or
results of operations of the Trust or the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the reasonable judgment of the
Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Trust Preferred Securities on the
Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus; and neither the
Trust, the Company nor any of its subsidiaries has sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
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<PAGE>
Prospectus;
(e) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, certificates of an
executive officer of the Company and of a Regular Trustee of the Trust,
with specific knowledge about the Company's and the Trust's financial
matters, satisfactory to the Underwriters to the effect set forth in
subsections 6(a) through 6(c) (with respect to the respective
representations, warranties, agreements and conditions of the Company or
the Trust) hereof and to the further effect that there has not occurred any
material adverse change, or any development reasonably likely to involve a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management financial position, stockholders' equity or
results of operations of the Trust or the Company and its subsidiaries,
taken as a whole, from that set forth or contemplated in the Registration
Statement;
(f) Richards, Layton & Finger, special Delaware counsel for the Trust
and the Company shall have given to the Underwriters their written opinion
dated the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Underwriters, to the effect that:
(i) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust
Act, and all filings required under the laws of the State of Delaware
with respect to the creation and valid existence of the Trust as a
business trust have been made;
(ii) under the Declaration and the Delaware Business Trust Act,
the Trust has the trust power and authority (i) to own property and
conduct its business, all as described in the Prospectus and the
Prospectus Supplement, (ii) to issue and sell the Trust Securities in
accordance with the Declaration, and as described in the Prospectus
and Prospectus Supplement, and to perform its other obligations under
the Declaration, this Agreement and the Trust Securities, (iii) to
deliver this Agreement, and (iv) to consummate the transactions
contemplated by this Agreement;
(iii) the Declaration constitutes a valid and binding obligation
of the Company and the Nuevo Trustees, and is enforceable against the
Company and the Nuevo Trustees, in accordance with its terms, subject
to the effect upon the Declaration of (x) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting
the rights and remedies of creditors generally, (y) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in
equity or at law), and (z) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution;
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<PAGE>
(iv) the Trust Common Securities have been authorized by the
Declaration and are duly and validly issued and undivided beneficial
interests in the assets of the Trust;
(v) the Trust Preferred Securities have been duly authorized by
the Declaration and are duly and validly issued and, subject to the
qualifications set forth in paragraph 6(f)(vi) below, fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust;
(vi) the holders of the Trust Preferred Securities, as
beneficial owners of the Trust will be entitled to the same limitation
of personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; provided that the holders of Trust Preferred Securities may
be obligated, pursuant to the Declaration, (i) to provide indemnity
and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Trust Preferred
Securities Certificates and the issuance of replacement Trust
Preferred Securities Certificates, and (ii) to provide security or
indemnity in connection with requests of or directions to the
Institutional Trustee to exercise its rights and powers under the
Declaration;
(vii) under the Declaration and the Delaware Business Trust Act,
the issuance of the Trust Securities is not subject to preemptive
rights;
(viii) the issuance and sale by the Trust of the Trust
Securities and the delivery and performance by the Trust and the
consummation of the transactions contemplated by this Agreement do not
violate (i) the Declaration, or (ii) any applicable Delaware law, rule
or regulation;
(ix) under the Declaration and the Delaware Business Trust Act,
(i) issuance and sale by the trust of the Trust Securities and the
delivery by the Trust of this Agreement, and the performance by the
Trust of its obligations hereunder, have been duly authorized by all
necessary trust action on the part of the Trust, and (ii) assuming the
due authorization, execution and delivery of (x) this Agreement by the
Company as depositor under the Declaration on behalf of the Trust, and
(y) the Trust Preferred Securities Certificates for the Trust
Preferred Securities by a Regular Trustee on behalf of the Trust and
assuming the due authentication of the Trust Preferred Securities
Certificates by the Institutional Trustee, this Agreement has been
duly delivered by the Trust and the Trust Preferred Securities
Certificates have been duly executed and delivered by the Trust;
(x) no authorization, approval, consent or order of any Delaware
court
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<PAGE>
or Delaware governmental authority or Delaware agency is required to
be obtained by the Trust solely as a result of the issuance and sale
of the Trust Preferred Securities, the consummation by the Trust of
the transactions contemplated by this Agreement or the compliance by
the Trust of its obligations under this Agreement;
(xi) the holders of Trust Preferred Securities (other than those
holders who reside or are domiciled in the State of Delaware) will
have no liability for income taxes imposed by the State of Delaware
solely as a result of their participation in the Trust, and the Trust
will not be liable for any income tax imposed by the State of
Delaware; and
(xii) after due inquiry on December ___, 1996, limited to, and
solely to the extent disclosed thereupon, court dockets for active
cases of the Court of Chancery of the State of Delaware in and for New
Castle County, Delaware, of the Superior Court of the State of
Delaware in and for New Castle County, Delaware, and of the United
States Federal District Court sitting in the State of Delaware, such
counsel is not aware of any legal or governmental proceeding, pending
against the Trust;
(g) Butler & Binion, L.L.P., counsel for the Company and the Trust,
shall have furnished to the Underwriters their written opinion dated the
Closing Date or the Additional Closing Date, as the case may be, in form
and substance reasonably satisfactory to the Underwriters, to the effect
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the
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<PAGE>
failure to be so qualified and in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole; and the Company is the sole record owner, directly or
indirectly, of all of the capital stock or equity interest, as the
case may be, of each of its subsidiaries, other than Bright Star
Gathering, Inc., of which the Company owns 80% of the outstanding
common stock;
(iv) other than as set forth or contemplated in the Prospectus,
to the best of such counsel's knowledge, there are no legal or
governmental investigations, actions, suits or proceedings pending or
threatened against or affecting the Company or any of its subsidiaries
or any of their respective properties or to which the Company or any
of its subsidiaries is or may be a party or to which any property of
the Company or its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole; to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threat ened
by others; and such counsel does not know of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement that are not described or
filed as required;
(v) the authorized capital stock of the Company conforms as to
legal matters, in all material respects, to the description thereof
contained in the Prospectus;
(vi) the shares of Nuevo Common Stock initially issuable upon
the conversion of the Convertible Debentures and the Trust Preferred
Securities have been duly authorized and reserved for issuance upon
such conversion and, when issued upon such conversion, will be duly
authorized, validly issued, fully paid and nonassessable and are not
subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Guarantee has been duly authorized, executed and
delivered by the Company and the Guarantee is a valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject to (x) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance or
transfer and other similar laws relating to or affecting the rights
and remedies of creditors generally, (y) principles of equity,
including applicable law relating to fiduciary duties (regardless of
whether considered and
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<PAGE>
applied in a proceeding in equity or at law), and (z) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification or contribution;
(ix) the Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
subject to (x) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws relating to or affecting the rights and remedies of
creditors generally, (y) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and
applied in a proceeding in equity or at law), and (z) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification or contribution;
(x) the Convertible Debentures have been duly authorized,
executed and delivered by the Company in accordance with the
provisions of the Indenture and, assuming they have been duly
authenticated in accordance with the provisions of the Indenture,
constitute valid and binding obligations of the Company enforceable in
accordance with their terms, subject to (x) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting
the rights and remedies of creditors generally, (y) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in
equity or at law), and (z) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution;
(xi) the Registration Statement and the Prospectus and any
amendments and supplements thereto (other than the financial
statements and related schedules and other financial and statistical
data therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the
Securities Act and nothing has come to such counsel's attention that
would cause them to believe that (other than the financial statements
and related schedules and other financial and statistical data
therein, as to which such counsel need express no belief) the
Registration Statement and the prospectus included therein at the time
the Registration Statement became effective contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as amended or
supplemented, if applicable, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(xii) the statements in the Prospectus under the captions "Risk
Factors," "Nuevo's Financing I," "Description of the TECONS,"
"Description of the
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<PAGE>
Guarantee," "Description of the Convertible Debentures," "Effect of
Obligations under the Convertible Debentures and the Guarantee,"
"Description of Debt Securities," "Description of the Capital Stock,"
"Certain Anti-Takeover Provisions," "Description of Warrants,"
"Description of Trust Preferred Securities," "Description of Trust
Preferred Securities Guarantee," "Description of Existing
Indebtedness" and "Plan of Distribution," in each case insofar as they
describe legal documents or refer to statements of law or legal
conclusions, are accurate in all material respects and present fairly
the information required to be shown;
(xiii) the execution and delivery by the Company of this
Agreement, the Declaration, the Guarantee and the Indenture and the
performance by the Company of its obligations hereunder and
thereunder, the issuance and sale of the Convertible Debentures by the
Company and the consummation by the Company of the other transactions
contemplated by this Agreement will not constitute a breach of or
default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any applicable law or statute or, to the best of such
counsel's knowledge, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or blue sky laws of the various states in
connection with the offer and sale of the Convertible Debentures, the
Trust Preferred Securities and the Guarantee;
(xiv) to the best of such counsel's knowledge, other than this
Agreement, the Declaration and the Trust Securities, there are no
agreements or instruments binding on the Trust that are material to
the Trust, and, to the best of such counsel's knowledge, there is no
judgement, order or decree of any governmental body, agency or court
having jurisdiction over the Trust;
(xv) the documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to the Closing Date or the Additional Closing Date, as the case
may be, (other than the financial statements and related schedules
therein and other financial and statistical data, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Securities
-23-
<PAGE>
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and they have no reason to believe that
any of such documents, when such documents became effective or were so
filed, as the case may be contained, in the case of a registration
statement which became effective under the Securities Act, an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading;
(xvi) although the discussion set forth in the Prospectus under
the heading "Certain Federal Tax Consequences" does not purport to
discuss all possible United States federal income tax consequences of
the purchase, ownership and disposition of the Trust Preferred
Securities, in such counsel's opinion such discussion constitutes, in
all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Trust Preferred Securities under current law; and
(xvii) the Registration Statement has become effective under the
Securities Act, and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending under the Securities Act.
In rendering such opinions, Butler & Binion, L.L.P. may rely as to
matters involving the application of laws other than the laws of the United
States and the State of Delaware and New York, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws. Such counsel may
rely as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Trust and of the Company and
certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence,
qualification or good standing of the Trust and of the Company and its
subsidiaries. The opinion of such counsel shall state that the opinion of
any such other counsel upon which they relied is in form satisfactory to
such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraphs (xi) and (xv) above counsel may state their opinion and
belief is based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendment or supplement
thereto (other than the documents incorporated by reference therein) and
review and discussion of the contents thereof (including the documents
incorporated by reference therein) but is without independent
-24-
<PAGE>
check or verification except as specified.
The opinion of Butler & Binion, L.L.P. described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(h) Richards, Layton & Finger, special Delaware counsel for the
Delaware Trustee shall have given to the Underwriters their written opinion
dated the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Underwriters, to the effect that:
(i) Wilmington Trust Company is a Delaware banking corporation,
duly incorporated, validly existing and in good standing, with full
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration, the
Indenture and the Guarantee;
(ii) Wilmington Trust Company has been authorized to perform its
obligations under the Certificate of Trust, the Declaration, the
Indenture and the Guarantee; the Declaration under Delaware law
constitutes a legal, valid and binding obligation of Wilmington Trust
Company, enforceable against it in accordance with its terms, subject
to the effect upon the Declaration of (x) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting
the rights and remedies of creditors generally, (y) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in
equity or at law), and (z) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution;
(iii) no consent, approval of authorization of, or registration
with or notice to, any Delaware banking authority is required for the
execution, delivery or performance by Wilmington Trust Company of the
Declaration, the Indenture or the Guarantee; and
(iv) Wilmington Trust Company has it principal place of business
in the State of Delaware; Wilmington Trust Company satisfies for the
Trust the requirements set forth in Section 3807(a) of the Business
Trust Act.
The opinion of Richards, Layton & Finger described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(i) on the date of the Prospectus and the effective date of the most
recently filed post-effective amendment to the Registration Statement and
also on the Closing Date or the Additional Closing Date, as the case may
be, KPMG Peat Marwick L.L.P. shall have furnished to the Underwriters
letters, dated the respective dates of delivery
-25-
<PAGE>
thereof, in form and substance reasonably satisfactory to the Underwriters,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
(j) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, an opinion of
Vinson & Elkins L.L.P., counsel to the Underwriters, with respect to the
due authorization and valid issuance of the Trust Preferred Securities, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters;
(k) the Trust Preferred Securities to be delivered on the Closing
Date or the Additional Closing Date, as the case may be, shall have been
approved for listing on the Exchange, subject to official notice of
issuance;
(l) on or prior to the Closing Date or the Additional Closing Date,
as the case may be, each of the Trust and the Company shall have furnished
to the Underwriters such further certificates and documents as the
Underwriters shall reasonably request; and
(m) the "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between the Underwriters and each of the executive
officers and directors of the Company, relating to sales and certain other
dispositions of Nuevo Common Stock or certain other securities, delivered
to you or before the date hereof, shall be in full force and effect on the
Closing Date or the Additional Closing Date, as the case may be.
7. Each of the Trust and the Company jointly and severally agree to
indemnify and hold harmless each Underwriter, each affiliate of any Underwriter
which assists such Underwriter in the distribution of the Trust Preferred
Securities and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Trust or the Company shall have furnished any amendments or supplements thereto)
or any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
-26-
<PAGE>
to make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities arise out of or are based on any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Trust or the Company in writing by
any Underwriter expressly for use therein; provided, that if any preliminary
prospectus or the Prospectus contained any alleged untrue statement of a
material fact or allegedly omitted to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and such statement or
omission shall have been corrected in a revised preliminary prospectus or in the
Prospectus (as amended or supplemented), the Company and the Trust shall not be
liable to any Underwriter pursuant to this paragraph with respect to such
alleged untrue statement or alleged omission to the extent that any such loss,
claim, damage or liability of such Underwriter results from the fact that such
Underwriter sold Trust Preferred Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the revised preliminary prospectus or the Prospectus as so amended or
supplemented, as the case may be, containing a correction that cures such
alleged misstatement or omission, if the Company has timely provided copies of
such corrected preliminary prospectus or Prospectus to the Underwriters in
accordance with Section 5(b) hereof.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Trust, the Nuevo Trustees, the Company, its directors, its officers
who sign the Registration Statement and each person who controls the Trust or
the Company within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Trust and the Company to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Trust or the Company
in writing by such Underwriter expressly for use in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any preliminary
prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect or which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such control persons of Underwriters shall be designated in writing by J.P.
Morgan Securities Inc. Any such separate firm for the Trust, the Regular
Trustees, the Company, its directors, its officers who sign the Registration
Statement and such control persons of the Company shall be designated in
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<PAGE>
writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Trust and the Company on the one hand and the Underwriters on the other hand
from the offering of the Trust Preferred Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law or if the
Indemnified Person fails to give the notice referred to in the immediately
preceding paragraph, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Trust and the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the Company on
the one hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Trust and the Company and the total underwriting
compensation received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering
price of the Trust Preferred Securities. The relative fault of the Trust and
the Company on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Trust or the Company by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Trust, the Company and the Underwriters agree that it would not be just
and
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<PAGE>
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Trust Preferred Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has other wise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Trust Preferred Securities set forth opposite their
names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusively and shall
not limit any rights or remedies which may otherwise by available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in Section 7 and the
representations and warranties of the Trust and the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Trust or the Company, its officers or directors or any other person
controlling the Trust or the Company and (iii) acceptance of and payment for any
of the Trust Preferred Securities.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Trust
Preferred Securities) may be terminated in the absolute discretion of the
Underwriters, by notice given to the Company, if after the execution and
delivery of this Agreement and prior to the Closing Date (or, in the case of the
Option Trust Preferred Securities, prior to the Additional Closing Date) (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange or the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (ii) trading of any securities of or guaranteed by the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Underwriters, is material and adverse and which, in the judgment of the
Underwriters, makes it impracticable to market the Trust Preferred Securities
being delivered at
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<PAGE>
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of any post-effective amendment to the Registration Statement by
the Commission.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Trust or the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Trust or the Company shall be unable to perform its
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company agrees to reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and expenses of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Trust, the Company, the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Trust Preferred Securities,
any controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Trust Preferred Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Underwriters jointly or by J.P. Morgan Securities Inc. on behalf of the
Underwriters, and any such action taken by J.P. Morgan Securities Inc. shall be
binding upon the Underwriters. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed by
certified or registered mail postage prepaid or by overnight delivery by a
nationally recognized delivery service or if transmitted by any standard form of
telecommunication. Notices shall be deemed effective upon receipt. Notices to
the Underwriters shall be given to the Underwriters, c/o J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260 (telefax: 212/648-5705);
Attention: Syndicate Department. Notices to the Company or the Trust shall be
given to it at Nuevo Energy Company, 1331 Lamar, Suite 1650, Houston, Texas
77010; Attention: Michael D. Watford, or at such other address as the Company or
the Trust shall deliver to the Underwriters.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
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<PAGE>
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
NUEVO FINANCING I
By: NUEVO ENERGY COMPANY, as Sponsor
By: /s/ Michael D. Watford
------------------------
Name: Michael D. Watford
Title: President and Chief Executive
Officer
NUEVO ENERGY COMPANY
By: /s/ Michael D. Watford
------------------------
Name: Michael D. Watford
Title: President and Chief Executive
Officer
Accepted: December 18, 1996
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
By: J. P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By: /s/ Ferrell P. McClean
------------------------
Name: Ferrell P. McClean
Title: Managing Director
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<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
- ----------- ----------------------
UNDERWRITER NUMBER OF
UNDERWRITTEN TRUST
PREFERRED SECURITIES
TO BE PURCHASED
<S> <C>
J.P. Morgan Securities Inc........................................... 1,000,000
Salomon Brothers Inc................................................. 1,000,000
---------
Total...................................................... 2,000,000
=========
</TABLE>
<PAGE>
EXHIBIT A
---------
LOCK-UP AGREEMENT
December ___, 1996
J.P. Morgan Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Keegan & Company, Inc.
PaineWebber Incorporated
As Representatives of the several Underwriters
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
J.P. Morgan Securities Inc.
Salomon Brothers Inc
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Ladies and Gentlemen:
The undersigned understands that certain of you propose to enter into (i)
an Underwriting Agreement (the "TECONS Underwriting Agreement") with Nuevo
Financing I, a statutory business trust created under the laws of the State of
Delaware (the "Trust") and Nuevo Energy Company, a Delaware corporation (the
"Company"), providing for the public offering (the "TECONS Public Offering") by
you of 2,000,000 of the Trust's $_____ Term Convertible Securities, Series A and
up to an additional 300,000 of the Trust's $_____ Term Convertible Securities,
Series A, solely to cover over-allotments (collectively, the "TECONS") and (ii)
an Underwriting Agreement (the "Common Stock Underwriting Agreement" and,
together with the TECONS Underwriting Agreement, the "Underwriting Agreements")
with the Company, The 1818 Fund, L.P. and United Investors Management Company
(the "Selling Stockholders") providing for the public offering (the "Common
Stock Public Offering" and, together with the TECONS Public Offering, the
"Public Offerings") by you of 1,860,000 shares of the common stock $.01 par
value, of the Company (the "Nuevo Common Stock"), and up to an aggregate of
278,605 additional shares of Common Stock, solely to cover over-allotments.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreements.
In consideration of your agreement to purchase and make the Public
Offerings, and for other good and valuable consideration receipt of which is
hereby acknowledged, the undersigned
A-1
<PAGE>
hereby agrees that, without the prior written consent of J.P. Morgan Securities
Inc. on your behalf, the undersigned will not, during the period ending 90 days
after the date of the prospectus supplement relating either to the TECONS or the
Common Stock (the "Prospectus"), (1) offer, pledge to sell, file a registration
statement relating to, announce the intention to sell, sell, issue, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any Nuevo Common Stock or any securities
convertible into or exercisable or exchangeable for Nuevo Common Stock
(including, without limitation, Nuevo Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant), or (2) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Nuevo Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Nuevo Common Stock or such other securities, in cash or otherwise.
Notwithstanding the preceding paragraph, this lock-up agreement shall not
prohibit any transfer or other disposition by the undersigned involving any of
the following: (1) a transfer or disposition of shares of Nuevo Common Stock to
his or her spouse, siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which such family members or the
undersigned retains the entire beneficial interest; (2) a transfer or
disposition of shares of Nuevo Common Stock on his or her death to the
undersigned's estate, executor, administrator or personal representative or to
the undersigned's beneficiaries pursuant to a devise or bequest or by the laws
of descent and distribution; (3) a transfer or disposition of shares of Nuevo
Common Stock as a bona fide gift; and (4) a pledge of Nuevo Common Stock as
collateral, to a banking institution; provided, in each case, that the
transferee, pledgee or other person receiving such shares shall agree to all of
the restrictions set forth in this lock-up agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this lock-up agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred to or agreed to be conferred and any obligations of the undersigned
shall be binding upon the successors and assigns of the undersigned.
In furtherance of the foregoing, the Company, the Trust, and any duly
appointed transfer agent for the registration or transfer of the securities
described herein, are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this lock-
up agreement.
The undersigned understands that, if both Underwriting Agreements do not
become effective, or if both Underwriting Agreements (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the TECONS and the Common Stock, the undersigned
shall be released from all obligations to you under this lock-up agreement.
A-2
<PAGE>
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreements and proceeding with the Public Offerings in reliance
upon this letter agreement. The undersigned agrees that the provisions of this
letter agreement shall also be binding upon the successors, assigns, heirs or
personal representatives of the undersigned, as the case may be.
Very truly yours,
By_________________________________
Name:
Title:
Accepted as of the date first set forth above:
J.P. MORGAN SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN KEEGAN & COMPANY, INC.
PAINEWEBBER INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters
By:__________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters
By:____________________________
Name:
Title:
A-3
<PAGE>
EXHIBIT 4.1
================================================================================
NUEVO FINANCING I
________________
AMENDED AND RESTATED DECLARATION
OF TRUST
________________
Dated as of December 23, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 INTERPRETATION AND DEFINITION.......................................1
Section 1.01. Definitions...................................................1
ARTICLE 2 TRUST INDENTURE ACT.................................................7
Section 2.01. Trust Indenture Act; Application..............................7
Section 2.02. List of Holders of Securities.................................8
Section 2.03. Reports by the Institutional Trustee..........................8
Section 2.04. Periodic Reports to Institutional Trustee.....................8
Section 2.05. Evidence of Compliance with Conditions Precedent..............8
Section 2.06. Events of Default; Waiver.....................................9
Section 2.07. Event of Default; Notice.....................................10
ARTICLE 3 ORGANIZATION 11
Section 3.01. Name.........................................................11
Section 3.02. Office.......................................................11
Section 3.03. Purpose......................................................11
Section 3.04. Authority....................................................11
Section 3.05. Title to Property of the Trust...............................12
Section 3.06. Powers and Duties of the Regular Trustees....................12
Section 3.07. Prohibition of Actions by the Trust and the Trustees.........14
Section 3.08. Legal Title to the Debentures................................15
Section 3.09. Certain Duties and Responsibilities of the Institutional
Trustee..................................................................17
Section 3.10. Certain Rights of Institutional Trustee......................19
Section 3.11. Delaware Trustee.............................................21
Section 3.12. Execution of Documents.......................................21
Section 3.13. Not Responsible for Recitals or Issuance of Securities.......21
Section 3.14. Duration of Trust............................................21
Section 3.15. Mergers......................................................21
ARTICLE 4 SPONSOR............................................................23
Section 4.01. Sponsor's Purchase of Common Securities......................23
Section 4.02. Responsibilities of the Sponsor..............................23
ARTICLE 5 TRUSTEES...........................................................24
Section 5.01. Number of Trustees...........................................24
Section 5.02. Delaware Trustee.............................................24
Section 5.03. Institutional Trustee; Eligibility...........................25
Section 5.04. Certain Qualifications of Regular Trustees and Delaware Trustee
Generally................................................................25
Section 5.05. Regular Trustees.............................................26
Section 5.06. Delaware Trustee.............................................26
Section 5.07. Appointment, Removal and Resignation of Trustees.............26
Section 5.08. Vacancies among Trustees.....................................28
Section 5.09. Effect of Vacancies..........................................28
Section 5.10. Meetings.....................................................28
Section 5.11. Delegation of Power..........................................28
Section 5.12. Merger, Conversion, Consolidation or Succession to Business..29
ARTICLE 6 DISTRIBUTIONS......................................................29
Section 6.01. Distributions................................................29
ARTICLE 7 ISSUANCE OF SECURITIES.............................................29
Section 7.01. General Provisions Regarding Securities......................29
Section 7.02. Execution and Authentication.................................30
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 7.03. Form and Dating..............................................31
Section 7.04. Paying Agent and Conversion Agent............................31
ARTICLE 8 TERMINATION OF TRUST...............................................32
Section 8.01. Termination of Trust.........................................32
ARTICLE 9 TRANSFER OF INTEREST...............................................33
Section 9.01. Transfer of Securities.......................................33
Section 9.02. Transfer of Certificates.....................................33
Section 9.03. Deemed Security Holders......................................34
Section 9.04. Book Entry Interests.........................................34
Section 9.05. Notices to Clearing Agency...................................35
Section 9.06. Appointment of Successor Clearing Agency.....................35
Section 9.07. Definitive Trust Preferred Security Certificates.............35
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates............36
ARTICLE 10 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS..........................................................36
Section 10.01. Liability...................................................36
Section 10.02. Exculpation.................................................37
Section 10.03. Fiduciary Duty..............................................37
Section 10.04. Indemnification.............................................38
Section 10.05. Outside Business............................................41
ARTICLE 11 ACCOUNTING.........................................................41
Section 11.01. Fiscal Year.................................................41
Section 11.02. Certain Accounting Matters..................................41
Section 11.03. Banking.....................................................42
Section 11.04. Withholding.................................................42
ARTICLE 12 AMENDMENTS AND MEETINGS............................................43
Section 12.01. Amendments..................................................43
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent..................................................................44
ARTICLE 13 REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE......46
Section 13.01. Representations and Warranties of Institutional Trustee.....46
Section 13.02. Representations and Warranties of Delaware Trustee..........46
ARTICLE 14 MISCELLANEOUS......................................................47
Section 14.01. Notices.....................................................47
Section 14.02. Governing Law...............................................48
Section 14.03. Intention of the Parties....................................48
Section 14.04. Headings....................................................48
Section 14.05. Successors and Assigns......................................48
Section 14.06. Partial Enforceability......................................49
Section 14.07. Counterparts................................................49
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ANNEX I TERMS OF SECURITIES I-1
EXHIBIT A-1 FORM OF TRUST PREFERRED SECURITY
CERTIFICATE A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE A2-1
EXHIBIT B SPECIMEN OF DEBENTURE B-1
EXHIBIT C UNDERWRITING AGREEMENT C-1
</TABLE>
iii
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
<S> <C>
310(a)..................................................... 5.03(a)
310(b)..................................................... 5.03(c)
310(c)..................................................... Inapplicable
311(c)..................................................... Inapplicable
312(a)..................................................... 2.02(a)
312(b)..................................................... 2.02(b)
313........................................................ 2.03
314(a)..................................................... 2.04; 3.06(j)
314(b)..................................................... Inapplicable
314(c)..................................................... 2.05
314(d)..................................................... Inapplicable
314(f)..................................................... Inapplicable
315(a)..................................................... 3.09(b)
315(c)..................................................... 3.09(a)
315(d)..................................................... 3.09(a)
316(a)..................................................... 2.06
316(c)..................................................... 3.06(e)
317(a)..................................................... 3.08(h)
317(b)..................................................... 3.08(h)
318(a)..................................................... 3.08(h)
</TABLE>
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NUEVO FINANCING I
December 23, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of December 23, 1996, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established Nuevo
Financing I (the "Trust"), a trust under the Business Trust Act (as defined
herein) pursuant to a Trust Agreement, dated as of November 15, 1996 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 15, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Sponsor;
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITION
Section 1.01. DEFINITIONS.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
<PAGE>
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Base Indenture" means the Subordinated Indenture dated as of November 25,
1996, between the Sponsor and the Debenture Trustee.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York or Houston, Texas are
permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Trust Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Trust Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Trust Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means December 23, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
2
<PAGE>
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.01 .
"Common Securities Guarantee" means the guarantee agreement to be dated as
of December 23, 1996 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Conversion Agent" has the meaning specified in Section 7.04.
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Preferred Guarantee Trustee (as
defined in the Preferred Securities Guarantee Agreement dated as of December 23,
1996 between the Sponsor and Wilmington Trust Company) shall, at any particular
time, be principally administered, which office at the date of execution of this
Declaration is located at c/o Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, New Castle County, Delaware 19890-0001,
Attention: Corporate Trust Administration.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Trustee" means Wilmington Trust Company, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the series of Debentures to be issued by the Sponsor
under the Indenture to be held by the Institutional Trustee, a specimen
certificate for such series of Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.02.
"Definitive Trust Preferred Security Certificates" has the meaning set
forth in Section 9.04.
"Direct Action" has the meaning specified in Section 3.07.(e).
"Dissolution Tax Opinion" has the meaning set forth in Annex 1 hereto.
"Distribution" has the meaning set forth in Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
3
<PAGE>
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.04(b).
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Base Indenture as supplemented by the Supplemental
Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Institutional Trustee Account" has the meaning set forth in Section
3.08(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Majority in liquidation amount" of the Securities means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Trust Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"No Recognition Opinion" has the meaning set forth in Annex 1 hereto.
4
<PAGE>
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Sections 3.08(h) and 7.04.
"Payment Amount" has the meaning set forth in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Redemption Tax Opinion" has the meaning set forth in Annex 1 hereto.
"Regular Trustee" has the meaning set forth in Section 5.01(b).
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
5
<PAGE>
"Securities" means the Common Securities and the Trust Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the Trust
Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Nuevo Energy Company ("Nuevo"), a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.07(b).
"Successor Entity" has the meaning set forth in Section 3.15.
"Successor Institutional Trustee" has the meaning set forth in Section
5.07(b).
"Successor Securities" has the meaning set forth in Section 3.15.
"Super Majority" has the meaning set forth in Section 2.06(a)(ii).
"Supplemental Indenture" means the First Supplemental Indenture dated as of
December 23, 1996 between the Sponsor and the Debenture Trustee pursuant to
which the Debentures are to be issued.
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided in
the terms of the Trust Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Trust Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Preferred Securities Guarantee" means the guarantee agreement to be
dated as of December 23, 1996, of the Sponsor in respect of the Trust Preferred
Securities.
"Trust Preferred Security" has the meaning specified in Section 7.01.
6
<PAGE>
"Trust Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate representing a
Trust Preferred Security substantially in the form of Exhibit A-1.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the offering
and sale of Trust Preferred Securities in the form of Exhibit C.
ARTICLE 2
TRUST INDENTURE ACT
Section 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. LIST OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such
7
<PAGE>
record date, provided that neither the Sponsor nor the Regular Trustees on
behalf of the Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Institutional Trustee. The
Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity)
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.03. REPORTS BY THE INSTITUTIONAL TRUSTEE.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Trust Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.04. PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
may be required by Section 314 of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Sponsor's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.06. EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities,
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waive any past Event of Default in respect of the Trust Preferred Securities and
its consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Trust Preferred Securities that the relevant
Super Majority represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Trust Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Trust
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of the Trust Preferred Securities of an Event of Default with respect to
the Trust Preferred Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Event of Default with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.06(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.06(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Trust Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee will
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be deemed to be acting solely on behalf of the Holders of the Trust Preferred
Securities and only the Holders of the Trust Preferred Securities will have the
right to direct the Institutional Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.06(b) shall be in lieu of
Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.06(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Trust Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.06(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
Section 2.07. EVENT OF DEFAULT; NOTICE.
(a) The Institutional Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.07(a) being hereby defined to be
an Event of Default as defined in the Indenture, not including any periods of
grace provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures or in the payment of any
sinking fund installment established for the Debentures, the Institutional
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Institutional Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1), 501(2) and 501(3) of the
Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
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ARTICLE 3
ORGANIZATION
Section 3.01. NAME.
The Trust is named "Nuevo Financing I" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities and the other Trustees. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.02. OFFICE.
The address of the principal office of the Trust is c/o Nuevo Energy
Company, 1331 Lamar, Suite 1650, Houston, Texas 77010. On ten Business Days'
written notice to the Holders of Securities and the other Trustees, the Regular
Trustees may designate another principal office.
Section 3.03. PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, and
(b) except as otherwise limited herein, to engage in only those other activities
necessary, or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
Section 3.04. AUTHORITY.
Subject to the limitations provided in this Declaration and to the specific
duties of the Institutional Trustee, the Regular Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action taken
by the Regular Trustees in accordance with their powers shall constitute the act
of and serve to bind the Trust and an action taken by the Institutional Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.05. TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.08 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
Section 3.06. POWERS AND DUTIES OF THE REGULAR TRUSTEES.
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The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Trust Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Trust Preferred Securities and
no more than one series of Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to a simultaneous issuance of both
Trust Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Trust Preferred
Securities, at the direction of the Sponsor, to:
(i) file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Trust Preferred Securities;
(ii) file any documents prepared by the Sponsor, or take any
acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Trust Preferred Securities in any State
in which the Sponsor has determined to qualify or register such Trust
Preferred Securities for sale;
(iii) file an application, prepared by the Sponsor, to the New
York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Trust Preferred Securities;
(iv) file with the Commission a registration statement on Form
8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Trust Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act; and
(v) enter into the Underwriting Agreement providing for the
sale of the Trust Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Trust Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be
held of record in the name of the Institutional Trustee for the benefit of
the Holders of the Trust Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Special Event;
(e) subject to Section 2(c) of Annex I hereto, to establish a record
date with respect to all actions to be taken hereunder that require a
record date be established, including and with respect to, for the purposes
of Section 316 (c) of
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the Trust Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Trust Preferred
Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.08(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Sponsor of its election to defer payments of
interest on the Debentures by extending the interest payment period under
the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Trust Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.06, including, but not limited to:
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(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures
will be treated as indebtedness of the Sponsor for United States
federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.06 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.03, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.03.
Subject to this Section 3.06, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.08.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.06
shall be reimbursed by the Sponsor.
Section 3.07. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
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(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
Section 3.08. LEGAL TITLE TO THE DEBENTURES.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.07. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debentures held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make payments to the Holders of
the Trust Preferred Securities and Holders of the Common Securities from
the Institutional Trustee Account in accordance with Section 6.01. Funds in
the Institutional Trustee Account shall be held uninvested until disbursed
in accordance with this Declaration. The Institutional Trustee Account
shall be an account that is maintained with a banking institution (which
may be with the Institutional Trustee) the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to the
Trust Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Trust Preferred Securities and
the Common Securities to the extent the Debentures are redeemed or mature;
and
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(iii) upon written notice of Distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
Distribution of the Debentures to Holders of Securities upon the occurrence
of certain special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided, however, that the holders of a majority in liquidation amount of the
Trust Preferred Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or to direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee to exercise the remedies available to it as a holder of
the Debentures. If the Institutional Trustee fails to enforce its rights under
the Debentures, a Holder of Trust Preferred Securities, to the fullest extent
permitted by law, may institute a legal proceeding directly against Nuevo to
enforce the Institutional Trustee's rights under the Debentures without first
instituting any legal proceeding against the Institutional Trustee or any other
Person; provided further, that, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Trust Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Trust Preferred Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. Notwithstanding any
payments made to such Holder by the Sponsor, in connection with such Direct
Action, Sponsor shall remain obligated to pay the principal or interest on such
Debentures, and the Sponsor shall be subrogated to the rights of such Holder of
Trust Preferred Securities to the extent of any payment made by the Sponsor to
such Holder of Trust Preferred Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Trust Preferred Securities
shall have no right or power to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.07.
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(g) The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.
(i) Subject to this Section 3.08, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.06.
The Institutional Trustee must exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.03.
Section 3.09. CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL
TRUSTEE.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants or obligations shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06) of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
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(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional 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 Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor, and money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.08(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties
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under this Declaration, nor shall the Institutional Trustee be liable for
any default or misconduct of the Regular Trustees or the Sponsor.
Section 3.10. CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.09:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) a direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion; such
counsel may be counsel to the Sponsor or any of its Affiliates, and may
include any of its employees; and the Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee;
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(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken 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 Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
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Section 3.11. DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than Section
5.02, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.02, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
Section 3.12. EXECUTION OF DOCUMENTS.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.06.
Section 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.14. DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article 8
hereof, shall have existence until the date specified in Section 8.01(a)(vii)
hereof.
Section 3.15. MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity ( the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust Preferred
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Trust Preferred Securities rank with
respect to Distributions and payments upon liquidation, redemption and
otherwise;
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(ii) the Sponsor expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional
Trustee as the Holder of the Debentures;
(iii) the Trust Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization
on which the Trust Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Trust Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders' interests
in the Trust Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other Person or permit any
other Person to consolidate, amalgamate, merge with or into, or replace it if
such consolidation,
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amalgamation, merger or replacement would cause the Trust or Successor Entity to
be classified as other than a grantor trust for United States federal income tax
purposes.
ARTICLE 4
SPONSOR
Section 4.01. SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Trust Preferred Securities are sold.
Section 4.02. RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Trust Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by, and execute on behalf of, the Trust with the
Commission a registration statement on Form S-3 in relation to the Trust
Preferred Securities and the Trust Preferred Securities Guarantee, including any
amendments thereto;
(b) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Trust Preferred Securities and the Trust
Preferred Securities Guarantee and to do any and all such acts, other than
actions which must be taken by the Trust, and advise the Trust of actions it
must take, and prepare for filing and execute any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States;
(c) to prepare for filing by, and execute on behalf of, the Trust an
application to the New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance of
any Trust Preferred Securities;
(d) to prepare for filing by, and execute on behalf of, the Trust of
documents or instruments to be delivered to DTC relating to the Trust Preferred
Securities;
(e) to prepare for filing by, and execute on behalf of, the Trust with the
Commission a registration statement on Form 8-A relating to the registration of
the Trust Preferred Securities under Section 12(b) or 12(g) of the Exchange Act,
including any amendments thereto; and
(f) to negotiate the terms of, and execute on behalf of the Trust, the
Underwriting Agreement providing for the sale of the Trust Preferred Securities.
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ARTICLE 5
TRUSTEES
Section 5.01. NUMBER OF TRUSTEES.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further that (1) one Trustee shall
satisfy the requirements of Section 5.02; (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a
"Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
Section 5.02. DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law; provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
Section 5.03. INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation or bank organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation, bank or other Person
permitted by the Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
Person publishes reports of condition at least annually, pursuant to law or
to the
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requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.03(a)(ii), the combined capital and
surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.03(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.07(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Trust Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: Wilmington Trust Company.
Section 5.04. CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 5.05. REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Michael D. Watford
Robert L. Gerry III
Robert M. King
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.06; and
(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of
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signing any documents which the Regular Trustees have power and authority to
cause the Trust to execute pursuant to Section 3.06.
Section 5.06. DELAWARE TRUSTEE.
The initial Delaware Trustee shall be: Wilmington Trust Company.
Section 5.07. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.07(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities.
(b) (i) the Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.07(a) until a successor Institutional
Trustee (a "Successor Institutional Trustee") has been an appointed and has
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.07(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) Until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) Until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders of the
Securities; and
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(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee, as the case may be, if the Institutional Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this Section
5.07.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.07 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
Section 5.08. VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01, or if the number of Trustees
is increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.07.
Section 5.09. EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.07, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.10. MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of
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the Regular Trustee or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees. In the event
there is only one Regular Trustee, any and all action of such Regular Trustee
shall be evidenced by a written consent of such Regular Trustee.
Section 5.11. DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.06; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Institutional Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, such successor shall notify the Sponsor and
the Trust promptly of its succession.
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ARTICLE 6
DISTRIBUTIONS
Section 6.01. DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Trust Preferred Securities and the Common Securities in accordance
with the preferences set forth in their respective terms. If and to the extent
that the Sponsor makes a payment of interest (including Compounded Interest (as
defined in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the
Institutional Trustee (the amount of any such payment being a "Payment Amount"),
the Institutional Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders.
ARTICLE 7
ISSUANCE OF SECURITIES
Section 7.01. GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
convertible preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Trust Preferred Securities") and one class of convertible common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Trust Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Trust Preferred Securities as provided in this
Declaration, the Trust Preferred Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a Trust Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
Section 7.02. EXECUTION AND AUTHENTICATION.
(a) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee of the Trust who shall have signed any of
the Securities shall cease to be such Regular Trustee before the Certificates so
signed shall be delivered by the Trust, such Certificates nevertheless may be
delivered as though the person who signed such Certificates had not ceased to be
such Regular Trustee; and any Certificate may be
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signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee.
(b) One Regular Trustee shall sign the Trust Preferred Securities for the
Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Trust Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Institutional Trustee. The
signature shall be conclusive evidence that the Trust Preferred Security has
been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Trust Preferred Securities for
original issue.
The Institutional Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Trust Preferred Securities. An authenticating agent
may authenticate Trust Preferred Securities whenever the Institutional Trustee
may do so. Each reference in this Declaration to authentication by the
Institutional Trustee includes authentication by such agent. An authenticating
agent has the same rights as the Institutional Trustee to deal with the Company
or an Affiliate of the Company.
Section 7.03. FORM AND DATING.
The Trust Preferred Securities and the Institutional Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as evidenced
by their execution thereof. The Securities may have letters, numbers, notations
or other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Institutional
Trustee in writing. Each Trust Preferred Security Certificate shall be dated the
date of its authentication. The terms and provisions of the Securities set forth
in Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are
part of the terms of this Declaration and to the extent applicable, the
Institutional Trustee and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby.
Section 7.04. PAYING AGENT AND CONVERSION AGENT.
In the event that the Trust Preferred Securities are not in book-entry only
form, the Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where the Trust Preferred Securities may
be presented for payment ("Paying Agent"). The Trust shall maintain an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Trust may appoint the Paying Agent
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and the Conversion Agent and may appoint one or more additional paying agents
and one or more additional conversion agents in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying agent and the
term "Conversion Agent" includes any additional conversion agent. The Trust may
change any Paying Agent or Conversion Agent without prior notice to any Holder.
The Trust shall notify the Institutional Trustee in writing of the name and
address of any Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Paying Agent or Conversion Agent, the
Institutional Trustee shall act as such. The Trust or any of its Affiliates may
act as Paying Agent or Conversion Agent. The Trust shall act as Paying Agent and
Conversion Agent for the Common Securities. The Paying Agent and Conversion
Agent shall be entitled to the rights and protections extended to the
Institutional Trustee when acting in such capacity.
The Trust initially appoints the Institutional Trustee as Conversion Agent
for the Trust Preferred Securities and, in the event the Trust Preferred
Securities are issued in certificated form, the Trust initially appoints the
Institutional Trustee as Paying Agent for the Trust Preferred Securities.
ARTICLE 8
TERMINATION OF TRUST
Section 8.01. TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent of
a majority in liquidation amount of the Securities voting together as a
single class to file such certificate of cancellation or the revocation of
the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with
the terms of the Securities and, after satisfaction of liabilities of
creditors (whether by payment or reasonable provision for payment), when
all of the Debentures held by the Institutional Trustee shall have been
distributed to the Holders of Securities in exchange for all of the
Securities;
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(vi) upon the distribution of the Sponsor's common stock to all
Securities Holders upon conversion of all outstanding Trust Preferred
Securities;
(vii) the expiration of the term of the Trust on December 31, 2031;
or
(viii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.01(a), after satisfaction of liabilities of creditors (whether by
payment or reasonable provision for payment), the Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Sections 3.09 and 3.10 and Article 10 shall survive
the termination of the Trust.
ARTICLE 9
TRANSFER OF INTERESTS
Section 9.01. TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article 9, Trust Preferred Securities shall be freely
transferable.
(c) Subject to this Article 9, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized independent
counsel experienced in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
Section 9.02. TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration
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of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of transfer
shall be canceled by the Regular Trustees. A transferee of a Certificate shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
Section 9.03. DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 9.04. BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Trust Preferred Securities,
the Trust Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more, fully registered, global Trust Preferred
Security Certificates (each a "Global Certificate"), to be delivered to DTC, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Trust Preferred Security
Beneficial Owner will receive a definitive Trust Preferred Security Certificate
representing such Trust Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.07. Unless and until
definitive, fully registered Trust Preferred Security Certificates (the
"Definitive Trust Preferred Security Certificates") have been issued to the
Trust Preferred Security Beneficial Owners pursuant to Section 9.07:
(a) the provisions of this Section 9.04 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Trust Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Trust
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.04 conflict with
any other provisions of this Declaration, the provisions of this Section 9.04
shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing
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Agency and/or the Clearing Agency Participants, including receiving and
transmitting payments of Distributions on the Global Certificates to such
Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Trust Preferred
Securities have voted on any matter provided for in this Declaration, so long as
Definitive Trust Preferred Security Certificates have not been issued, the
Trustees may conclusively rely on, and shall be protected in relying on, any
written instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Trust Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in whole
or in part.
Section 9.05. NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Trust Preferred Security
Holders is required under this Declaration, unless and until Definitive Trust
Preferred Security Certificates shall have been issued to the Trust Preferred
Security Beneficial Owners pursuant to Section 9.07, the Regular Trustees shall
give all such notices and communications specified herein to be given to the
Trust Preferred Security Holders to the Clearing Agency, and shall have no
notice obligations to the Trust Preferred Security Beneficial Owners.
Section 9.06. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities, the Regular Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Trust Preferred Securities.
Section 9.07. DEFINITIVE TRUST PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Trust Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.06; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Trust Preferred Securities,
then:
(c) Definitive Trust Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Trust Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Trust Preferred Security Certificates to be delivered to Trust
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees
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nor the Trust shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Trust Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Trust Preferred Securities may be
listed, or to conform to usage.
Section 9.08. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless, then, in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Institutional Trustee or any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for, or in
lieu of, any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.08, the Institutional Trustee or the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE 10
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS.
Section 10.01. LIABILITY.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
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(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Trust Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
Section 10.02. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
Section 10.03. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
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the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
Section 10.04. INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by law,
any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor by reason of
the fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of
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such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.04(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.04(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.04(a) shall be paid by the Sponsor in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Sponsor as authorized in this Section 10.04(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel in
a written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Regular Trustees, independent legal counsel or Common Security Holder
reasonably
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determine that such person deliberately breached his duty to the Trust or
its Common or Trust Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.04(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor
or Trust Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.04(a) shall be deemed to be provided by a contract between the Sponsor
and each Company Indemnified Person who serves in such capacity at any time
while this Section 10.04(a) is in effect. Any repeal or modification of
this Section 10.04(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have
the power to indemnify him against such liability under the provisions of
this Section 10.04(a)
(viii) For purposes of this Section 10.04(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.04(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.04(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify, to the fullest extent permitted by
law, (i) the Institutional Trustee, (ii) the Delaware Trustee, (iii) the Paying
Agent, (iv) the Conversion Agent, (v) any Affiliate of the Institutional
Trustee, and the Delaware Trustee, and (vi) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee, the Paying Agent, the
Conversion Agent and the Delaware Trustee (each of the Persons in (i) through
(vi) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Sponsor also agrees to advance expenses (including legal fees)
incurred by
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a Fiduciary Indemnified Person in defending any claim, demand, action, suit or
proceeding, from time to time, prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Sponsor of an undertaking
by or on behalf of the Fiduciary Indemnified Person to repay such amount if it
shall be determined that the Fiduciary Indemnified Person is not entitled to be
indemnified as authorized in this subsection. The obligation to indemnify as set
forth in this Section 10.04(b) shall survive the satisfaction and discharge of
this Declaration.
Section 10.05. OUTSIDE BUSINESS.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE 11
ACCOUNTING
Section 11.01. FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books, records and supporting documents,
which shall reflect in detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting in compliance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for the United States federal income
tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities and the other Trustees, within 90 days after the
end of each Fiscal
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Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related income or
loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
Section 11.03. BANKING.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
Section 11.04. WITHHOLDING.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE 12
AMENDMENTS AND MEETINGS
Section 12.01. AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
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(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.01(c) and this Section 12.01 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article 4 shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article 5 to
increase or decrease the number of and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) notwithstanding Section 12.01(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders.
Section 12.02. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Trust Preferred Securities are
listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any action
that may be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so taken
is signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Trust Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any such
right to vote.
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ARTICLE 13
REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE
Section 13.01. REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
Section 13.02. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing, with full power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
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(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware. The Delaware Trustee satisfies for the
Trust the requirements set forth in Section 3807(a) of the Business Trust Act.
ARTICLE 14
MISCELLANEOUS
.
Section 14.01. NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
Nuevo Financing I
c/o Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
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(c) if given to the Institutional Trustee, at its Corporate Trust Office to
the attention of Corporate Trust Administration (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities);
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 14.02. GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
Section 14.03. INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
Section 14.04. HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.05. SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
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Section 14.06. PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.07. COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
_________________________________________
Michael D. Watford, as Regular Trustee
_________________________________________
Robert L. Gerry, III, as Regular Trustee
_________________________________________
Robert M. King, as Regular Trustee
Wilmington Trust Company,
as Delaware Trustee
By:______________________________________
Name:
Title:
Wilmington Trust Company,
as Institutional Trustee
By:______________________________________
Name:
Title:
NUEVO ENERGY COMPANY,
as Sponsor
By:______________________________________
Name: Robert M. King
Title: Senior Vice President and
Chief Financial Officer
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ANNEX I
TERMS OF
$2.875 TRUST PREFERRED SECURITIES
$2.875 COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of Trust,
dated as of December 23, 1996 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Trust Preferred Securities and the Common Securities are
set out below (each capitalized term used but not defined herein has the meaning
set forth in the Declaration or, if not defined in such Declaration, as defined
in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) TRUST PREFERRED SECURITIES. 2,300,000 Trust Preferred Securities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of One Hundred and Fifteen Million Dollars ($115,000,000), and a
liquidation amount with respect to the assets of $50 per Trust Preferred
Security, are hereby designated for the purposes of identification only as
"$2.875 Term Convertible Securities, Series A" (the "Trust Preferred
Securities"). The Trust Preferred Security Certificates evidencing the Trust
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Trust Preferred Securities are listed.
(b) COMMON SECURITIES. 71,134 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Three
Million Five Hundred and Fifty Six Thousand Seven Hundred Dollars ($3,556,700),
and a liquidation amount with respect to the assets of the Trust of $50 per
common security, are hereby designated for the purposes of identification only
as "$2.875 Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be in the form of Exhibit A-
2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 5.75% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to
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the extent the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accumulate
from December 23, 1996, and will be payable quarterly in arrears, on March 15,
June 15, September 15 and December 15 of each year, commencing on March 15,
1997, except as otherwise described below. So long as the Sponsor shall not be
in default in the payment of interest on the Debentures, the Sponsor has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity or any
redemption date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Sponsor may further extend such Extension Period; provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarters or extend beyond the maturity or any
redemption date of the Debentures. Payments of accumulated Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Sponsor may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. While the Trust Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates, which payment dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment in respect of the Trust Preferred
Securities will be made as described under the heading "Description of the Trust
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus Supplement dated December 18, 1996, to the Base
Prospectus dated November 25, 1996 (together, the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the Sponsor and the Trust.
The relevant record dates for the Common Securities shall be the same record
date as for the Trust Preferred Securities. If the Trust Preferred Securities
shall not continue to remain in book-entry only form, the relevant record dates
for the Trust Preferred Securities shall conform to the rules of any securities
exchange on which the securities are listed and, if none, shall be selected by
the Regular Trustees, which dates shall be at least one Business Day before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Sponsor
having failed to make a payment under the Debentures, will cease to be payable
to the Person in whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
Person in whose name such Securities are registered on the special record
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date or other specified date determined in a like manner as provided in Section
307 of the Indenture. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Nuevo Common Stock pursuant to the terms of
the Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that if a Security is surrendered for conversion after the close of business on
any regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then, notwithstanding
such conversion, the Distribution payable on such Distribution payment date will
be paid in cash to the person in whose name the Security is registered at the
close of business on such record date, and (other than a Security or a portion
of a Security called for redemption on a redemption date occurring after such
record date and on or prior to such Distribution payment date) when so
surrendered for conversion, the Security must be accompanied by payment of an
amount equal to the Distribution payable on such Distribution payment date.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors an amount equal to the
aggregate of the stated liquidation amount of $50 per Security plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, such dissolution, winding-up or termination
occurs in connection with a Special Event in which, in accordance with Section
4(c), Debentures in an aggregate stated principal amount equal to the aggregate
stated liquidation amount of such Securities, with an interest rate equal to the
Coupon Rate of, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on, such Securities, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
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4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part, whether at
stated maturity or upon redemption (either at the option of the Sponsor or
pursuant to a Special Event as described below), the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price per Security equal to the
redemption price of the Debentures, together with accrued and unpaid
Distributions thereon through the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than 60
days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Trust Preferred Securities will be redeemed Pro
Rata and the Trust Preferred Securities to be redeemed will be as described in
Section 4(g) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Sponsor, except in certain limited
circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accumulated and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Trustees'
receipt of an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debentures, (ii) in the case of a Tax Event, the Sponsor
or the Trust being unable to avoid, within the 90 Day Period, the Tax Event by
taking some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Sponsor, or the Holders of the Securities ("Ministerial Action"), and
(iii) the Sponsor's prior written consent to such dissolution and distribution.
If in the event of a Tax Event (i) after receipt of a Dissolution Tax
Opinion (as defined hereinafter) by the Regular Trustees, the Sponsor has
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Sponsor would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even after the Debentures were distributed to the
Holders of Securities in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Trustees shall have been informed by
such tax counsel that a No Recognition Opinion cannot be delivered to the Trust,
the Sponsor shall have the right at any time, upon not less than 30 nor more
than 60 days' notice, to redeem the Debentures in whole or in part, at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon, for cash within
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90 days following the occurrence of such Tax Event. Following such redemption,
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at any time
there is available to the Sponsor or the Trust the opportunity to eliminate,
within such 90 Day Period, the Tax Event by taking some Ministerial Action, the
Trust or the Sponsor will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that each of the Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effect that on or after December 18, 1996,
as a result of (a) any amendment to, clarification of, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification or change is made known, which amendment, clarification, or change
is effective or such pronouncement or decision is announced, in each case, on or
after, December 18, 1996, there is the creation by such change in tax law more
than an insubstantial risk that (i) the Trust is or will be within 90 days of
the date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges, or (iii) interest payable in cash
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible, in whole or in part, by the Sponsor for
United States federal income tax purposes. Notwithstanding the foregoing, a Tax
Event shall not include any change in tax law that requires the Sponsor for
United States federal income tax purposes to defer taking a deduction for any
original issue discount ("OID") that accrues with respect to the Debentures
until the interest payment related to such OID is paid by the Sponsor in cash;
provided, that such change in tax law does not create more than an insubstantial
risk that the Sponsor will be prevented from taking a deduction for OID accruing
with respect to the Debentures as of a date that is no later than the date the
interest payment related to such OID is actually paid by the Sponsor in cash.
"Investment Company Event" means that each of the Trustees shall have
received an opinion of a nationally recognized independent counsel to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulations by any
legislative body, court, governmental agency or regulatory authority on or after
December 18, 1996, (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" which is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
On and from the date fixed by the Regular Trustees for any distribution of
Debentures upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company (the "Depository")
or its nominee (or any
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successor Clearing Agency or its nominee), as the record Holder of the Trust
Preferred Securities, will receive a registered certificate or certificates
representing the Debentures to be delivered upon such distribution, and (iii)
any certificates representing Securities, except for certificates representing
Trust Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to represent
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accumulated and unpaid Distributions on
such Trust Preferred Securities until such certificates are presented to the
Sponsor or its agent for exchange.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been paid on all Securities
for all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Sponsor will use its best efforts to
have the Debentures listed on the New York Stock Exchange or on such other
national securities exchange or similar organization as the Trust Preferred
Securities were listed or quoted immediately prior to the distribution of the
Debentures.
(f) Notice of any redemption of, or notice of distribution of Debentures
in exchange for the Securities (a "Redemption/Distribution Notice") will be
given by the Trust by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, or by such other means suitable to assure delivery of such written
notice, to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(g) In the event that fewer than all the outstanding Trust Preferred
Securities are to be redeemed, the Trust Preferred Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Trust Preferred Securities, it
being understood that, in respect of Trust Preferred Securities registered in
the name of and held of record by the Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distribution of
the proceeds of such redemption will be made to each Clearing Agency Participant
(or Person on whose behalf such nominee holds such securities) in accordance
with the procedures applied by such agency or nominee.
(h) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Trust Preferred Securities are in book-entry
form, with respect to the Trust Preferred Securities, by 12:00 noon, New York
City time, on the redemption date, provided that the Sponsor has paid the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will deposit
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irrevocably with the Depository or its nominee (or successor Clearing Agency or
its nominee) funds sufficient to pay the applicable Redemption Price with
respect to the Trust Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Trust Preferred Securities, and (B) with respect to Trust
Preferred Securities issued in definitive form and Common Securities, provided
that the Sponsor has paid the Institutional Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the Holders of
such Securities by check mailed to the address of the relevant Holder appearing
on the books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on the
required date of such deposit, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of Holders of such Securities
so called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been so called for redemption. If any date fixed for redemption of Securities
is not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption
Price in respect of any Securities is improperly withheld or refused and not
paid either by the Institutional Trustee or by the Sponsor as guarantor pursuant
to the relevant Securities Guarantee, Distributions on such Securities will
continue to accumulate from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
(i) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (A) in respect of the Trust Preferred Securities, the
Depository or its nominee (or any successor Clearing Agency or its nominee) if
the Global Certificates have been issued or, if Definitive Trust Preferred
Security Certificates have been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder thereof.
(j) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or otherwise.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time prior to the
close of business on December 15, 2026 (or, in the case of Securities called for
redemption, prior to the close of business on the Business Day prior to the
redemption date), at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of Nuevo Common
Stock in the manner described herein on and subject to the following terms and
conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Nuevo Common Stock
pursuant to the
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Holder's direction to the Conversion Agent to exchange such Securities for
a portion of the Debentures theretofore held by the Trust on the basis of
one Security per $50 principal amount of Debentures, and immediately
convert such amount of Debentures into fully paid and nonassessable shares
of Nuevo Common Stock at an initial rate of 0.8421 shares of Nuevo Common
Stock per $50 principal amount of Debentures (which is equivalent to a
conversion price of $59.375 per share of Nuevo Common Stock, subject to
certain adjustments set forth in Sections 7.3 and 7.4 of the Supplemental
Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Nuevo Common Stock the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated
form, with such certificates. The Conversion Request shall (i) set forth
the number of Securities to be converted and the name or names, if other
than the Holder, in which the shares of Nuevo Common Stock should be issued
and (ii) direct the Conversion Agent (a) to exchange such Securities for a
portion of the Debentures held by the Trust (at the rate of exchange
specified in the preceding paragraph) and (b) to immediately convert such
Debentures on behalf of such Holder, into Nuevo Common Stock (at the
conversion rate specified in the preceding paragraph). The Conversion
Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with
this Section. The Conversion Agent shall thereupon notify Nuevo of the
Holder's election to convert such Debentures into shares of Nuevo Common
Stock. If a Security is surrendered for conversion after the close of
business on any regular record date for payment of a Distribution and
before the opening of business on the corresponding Distribution payment
date, then, notwithstanding such conversion, the Distribution payable on
such Distribution payment date will be paid in cash to the person in whose
name the Security is registered at the close of business on such record
date, and (other than a Security or a portion of a Security called for
redemption on a redemption date occurring after such record date and on or
prior to such Distribution payment date) when so surrendered for
conversion, the Security must be accompanied by payment of an amount equal
to the Distribution payable on such Distribution payment date. Except as
provided above, neither the Trust nor the Sponsor will make, or be required
to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions accumulated on the
Securities (including any Additional Amounts accumulated thereon)
surrendered for conversion, or on account of any accumulated and unpaid
dividends on the shares of Nuevo Common Stock issued upon such conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day on which a Notice of Conversion relating to
such Securities is received by the Trust in accordance with the foregoing
provision (the "Conversion Date"). The Person or Persons entitled to
receive Nuevo Common Stock issuable upon conversion of the Debentures shall
be treated for all purposes as the record holder or holders of such Nuevo
Common Stock at such time. As promptly as practicable on or after the
Conversion Date, Nuevo shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full
shares of Nuevo Common Stock issuable upon such conversion, together with
the cash payment, if any, in lieu of any fraction of any share to the
Person or Persons entitled to receive the
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same, unless otherwise directed by the Holder in the notice of conversion
and the Conversion Agent shall distribute such certificate or certificates
to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints the
Person serving as Conversion Agent under the Declaration as "Conversion
Agent" for the purpose of effecting the conversion of Securities in
accordance with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as agent of
the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection
with the conversion of such Securities in accordance with this Section and
(ii) to convert all or a portion of the Debentures into Nuevo Common Stock
and thereupon to deliver such shares of Nuevo Common Stock in accordance
with the provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Nuevo Common Stock will be issued as a result
of conversion, but in lieu thereof, such fractional interest will be paid
in cash by Nuevo to the Conversion Agent, which in turn will make such
payment to the Holder or Holders of Securities so converted.
(e) Nuevo shall at all times reserve and keep available out of its
authorized and unissued Nuevo Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Nuevo Common Stock as shall from time to
time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, Nuevo shall be entitled to
deliver upon conversion of Debentures, shares of Nuevo Common Stock
reacquired and held in the treasury of Nuevo (in lieu of the issuance of
authorized and unissued shares of Nuevo Common Stock), so long as any such
treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any shares of Nuevo Common Stock issued upon
conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Trust shall deliver the shares of Nuevo
Common Stock received upon conversion of the Debentures to the converting
Holder free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of Nuevo
and the Trust shall prepare and shall use its best efforts to obtain and
keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Nuevo Common
Stock (and all requirements to list Nuevo Common Stock issuable upon
conversion of Debentures that are at the time applicable), in order to
enable Nuevo to lawfully issue Nuevo Common Stock to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver Nuevo Common
Stock to each Holder upon conversion of the Securities.
(f) Nuevo will pay any and all taxes that may be payable in respect of the
issue or delivery of shares of Nuevo Common Stock on conversion of
Debentures and the delivery of the shares of Nuevo Common Stock by the
Trust upon conversion of the Securities. Nuevo shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of
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Nuevo Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to the Trust the
amount of any such tax, or has established to the satisfaction of the Trust
that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts
on account of such withholdings.
6. VOTING RIGHTS - TRUST PREFERRED SECURITIES.
(a) Except as provided under Sections 6(b) and 8 and as otherwise required
by law and the Declaration, the Holders of the Trust Preferred Securities will
have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a Majority in liquidation amount of the Trust Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional Trustee, as holder
of the Debentures, to (i) exercise the remedies available under the Indenture
with respect to the Debentures, (ii) waive any past default and its consequences
that is waivable under Section 513 of the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable; provided, however, that, if an Event of Default has occurred
under the Indenture and is continuing, then the Holders of 25% in liquidation
amount of the Trust Preferred Securities, voting separately as a class, may
direct the Institutional Trustee, as holder of the Debentures, to declare the
principal amount of all the Debentures to be due and payable immediately; and
provided further that where a consent or other action under the Indenture would
require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Trust Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Trust Preferred Securities. Other than
with respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Trust Preferred Securities under this
paragraph unless each Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. The
Holders of a Majority in liquidation amount of the Trust Preferred Securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee or to direct
the exercise of any trust or power conferred upon the Institutional Trustee
under the Declaration, including the right to direct the Institutional Trustee
to exercise the remedies available to it as a holder of the Debentures. If the
Institutional Trustee fails to enforce its rights under the Debentures, a Holder
of Trust Preferred Securities, to the fullest extent
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permitted by law, may institute a legal proceeding directly against the Sponsor
to enforce the Institutional Trustee's rights under the Debentures without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Sponsor to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Trust Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Trust Preferred Securities of such
Holder (a "Direct Action") on or after the respective due date specified in the
Debentures. Notwithstanding any payments made to such Holder by the Sponsor, in
connection with such Direct Action, the Sponsor shall remain obligated to pay
the principal or interest on such Debentures, and the Sponsor shall be
subrogated to the rights of such Holder of Trust Preferred Securities to the
extent of any payment made by the Sponsor to such Holder of Trust Preferred
Securities in such Direct Action. Except as provided in the preceding sentences,
the Holders of Trust Preferred Securities shall have no right or power to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Trust Preferred Securities may be
given at a separate meeting of Holders of Trust Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Trust Preferred Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Trust Preferred Securities.
Each such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Trust Preferred Securities will be
required for the Trust to redeem and cancel Trust Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Trust Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the Trust
Preferred Securities that are owned at such time by the Sponsor or any Affiliate
of the Sponsor shall not be entitled to vote or consent and shall, for purposes
of such vote or consent, be treated as if they were not outstanding.
7. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 7(b), (c) and 8 and as otherwise
required by law and the Declaration, the Holders of the Common Securities will
not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article 5 of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
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(c) Subject to Section 2.06 of the Declaration and only after any Event of
Default with respect to the Trust Preferred Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 7(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the Trust
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.
8. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees
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otherwise propose to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than as described in Section 8.01 of the
Declaration, then the Holders of outstanding Securities voting together as a
single class, will be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities affected thereby; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Trust Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Securities
under this Section 8(b) unless each Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.
9. PRO RATA.
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Trust
Preferred Securities pro rata according to the aggregate liquidation amount of
Trust Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Trust Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Trust Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
10. RANKING.
The Trust Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is
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continuing, the rights of Holders of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights to payment of the Holders of the Trust Preferred
Securities.
11. LISTING.
The Regular Trustees shall use their best efforts to cause the Trust
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
12. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Trust Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Trust Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
13. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive or similar rights to
subscribe for any additional securities.
14. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Trust Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
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EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITY CERTIFICATE
[IF THE TRUST PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Trust Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Trust Preferred Security is exchangeable for Trust Preferred Securities
registered in the name of a Person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Trust Preferred Security (other than a transfer of this Trust Preferred
Security 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 to a successor Depositary or its nominee) may be registered except in limited
circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Trust Preferred Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number: Number of Trust Preferred Securities: _____
CUSIP NO. 670511 20 3
Certificate Evidencing Trust Preferred Securities
of
Nuevo Financing I
$2.875 Trust Preferred Securities (liquidation amount $50 per Trust
Preferred Security)
Nuevo Financing I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that __________ (the "Holder")
is the registered owner of Trust Preferred Securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the $2.875
Term Convertible Securities, Series A (liquidation amount $50 per Trust
Preferred Security) (the "Trust Preferred Securities"). The Trust Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
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and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Trust Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of December 23, 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Trust Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Trust Preferred Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Trust Preferred Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Trust Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Trust Preferred Securities shall not be entitled
to any benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate on __________.
Nuevo Financing I
By:________________________________
Name:
Title: Regular Trustee
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[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Security Certificates referred to in the
within-mentioned Declaration.
Dated: ___________________
WILMINGTON TRUST COMPANY,
as Institutional Trustee or as Authenticating Agent
By:__________________________ By:__________________________
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Trust Preferred Security will be fixed at a
rate per annum of 5.75% (the "Coupon Rate") of the stated liquidation amount of
$50 per Trust Preferred Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Trust Preferred
Securities will be cumulative, will accrue from December 23, 1996 and will be
payable quarterly in arrears, on March 15, June 15, September 15 and December 15
of each year, commencing on March 15, 1997, which payment dates shall correspond
to the interest payment dates on the Debentures, to Holders of record at the
close of business on the regular record date for such Distribution which shall
be the close of business on the Business Day next preceding such Distribution
payment date unless otherwise provided in the Declaration. The Sponsor has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period") provided that no
Extension Period shall last beyond the date of the maturity or any redemption
date of the Debentures and, as a consequence of such deferral, Distributions
will also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Sponsor may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity or any redemption date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Sponsor may commence a new Extension Period,
subject to the above requirements.
The Trust Preferred Securities shall be redeemable as provided in the
Declaration.
The Trust Preferred Securities shall be convertible into shares of Nuevo
Common Stock, through (i) the exchange of Trust Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Nuevo Common Stock, in the manner and according to the terms set forth in
the Declaration.
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CONVERSION REQUEST
To: Wilmington Trust Company, as Institutional Trustee of Nuevo Financing I
The undersigned owner of these Trust Preferred Securities hereby
irrevocably exercises the option to convert these Trust Preferred Securities, or
the portion below designated, into Common Stock of Nuevo Energy Company (the
"Nuevo Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust, dated as of December 23, 1996 (as amended from time to
time, the "Declaration"), by Michael D. Watford, Robert L. Gerry III and Robert
M. King, as Regular Trustees, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Institutional Trustee, Nuevo Energy Company, as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Trust Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Trust Preferred Securities for
a portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Trust Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Nuevo Common Stock (at the
conversion rate specified in the terms of the Trust Preferred Securities set
forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a Person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ________________, _____
in whole in part
Number of Trust Preferred Securities to be
Converted:
______________
5
<PAGE>
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Nuevo Common Stock are to
be issued, along with the address or addresses of such Person or Persons
___________________________________ ____________________________________
___________________________________ ____________________________________
___________________________________ ____________________________________
___________________________________ ____________________________________
___________________________________ ____________________________________
___________________________________ ____________________________________
____________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
___________________________________ ____________________________________
___________________________________ ____________________________________
___________________________________ ____________________________________
Signature Guarantee:* _________________________________________________________
__________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.)
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
agent to transfer this Trust Preferred Security Certificate on the books of
the Trust. The agent may substitute another to act for him or her.
Date: __________________________________
Signature: _____________________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
7
<PAGE>
Signature Guarantee* __________________________________________________________
____________________
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
8
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number: ________ Number of Common Securities: _______
Certificate Evidencing Common Securities
of
Nuevo Financing I
$2.875 Common Securities
(liquidation amount $50 per Common Security)
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN THE LIMITED CIRCUMSTANCES AS
DESCRIBED IN THE DECLARATION (AS DEFINED BELOW):
Nuevo Financing I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ____________ (the
"Holder") is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 5.75%
Common Securities (liquidation amount $50 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of December 23, 1996, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Common Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
1
<PAGE>
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___ day of
December __, 1996.
Nuevo Financing I
By:__________________________________
Name: Robert M. King
Title: Regular Trustee
2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of 5.75% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and to
the extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from December 23, 1996 and will be payable
quarterly in arrears, on March 15, June 15, September 15 and December 15 of each
year, commencing on March 15, 1997, which payment dates shall correspond to the
interest payment dates on the Debentures, to Holders of record at the close of
business on the regular record date for such Distribution which shall be the
close of business on the Business Day next preceding such Distribution payment
date unless otherwise provided in the Declaration. The Sponsor has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period") provided that no Extension
Period shall last beyond the date of maturity of the Debentures and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
such Extension Period, the Sponsor may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
date of maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination
of any Extension Period and the payment of all amounts then due, the Sponsor may
commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Nuevo Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Nuevo
Common Stock, in the manner and according to the terms set forth in the
Declaration.
3
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company
as Institutional Trustee of
Nuevo Financing I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Nuevo Energy Company (the "Nuevo Common Stock")
in accordance with the terms of the Amended and Restated Declaration of Trust
dated as of December 23, 1996 (as amended from time to time, the "Declaration"),
by Michael D. Watford, Robert L. Gerry III and Robert M. King, as Regular
Trustees, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Nuevo Energy Company, as Sponsor, and by the
Holders, from time to time, of undivided beneficial interests in the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise of
the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debentures on behalf of the undersigned, into
Nuevo Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a Person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _____________, _____
in whole in part
Number of Common
Securities to be
converted: _____
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Nuevo Common Stock are to
be issued, along with the address or addresses of such Person or Persons
__________________________________ _____________________________________
__________________________________ _____________________________________
__________________________________ _____________________________________
__________________________________ _____________________________________
4
<PAGE>
_________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
__________________________________ _____________________________________
__________________________________ _____________________________________
__________________________________ _____________________________________
Signature Guarantee:* __________________________________________________________
__________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program" as
may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.)
5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _______________________________
Signature: ________________________
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
6
<PAGE>
Signature Guarantee:* _____________________________________________________
__________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
7
<PAGE>
Exhibit 4.2
================================================================================
NUEVO ENERGY COMPANY
To
Wilmington Trust Company
Trustee
________________
SUBORDINATED INDENTURE
________________
Dated as of November 25, 1996
================================================================================
<PAGE>
NUEVO ENERGY COMPANY
RECONCILIATION OF CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310
THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- ----------- -------
<S> <C> <C>
Sec. 310 (a) (1) ...................................... 609
(a) (2) ...................................... 609
(2) (3) ...................................... Not Applicable
(a) (4) ...................................... Not Applicable
(b) ...................................... 608
610
Sec. 311 (a) ...................................... 613
(b) ...................................... 613
Sec. 312 (a) ...................................... 701
...................................... 702
(b) ...................................... 702
(c) ...................................... 702
Sec. 313 (a) ...................................... 703
(b) ...................................... 703
(c) ...................................... 703
(d) ...................................... 703
Sec. 314 (a) ...................................... 704
(a) (4) ...................................... 101
1004
(b) ...................................... Not Applicable
(c) (1) ...................................... 102
(c) (2) ...................................... 102
(c) (3) ...................................... Not Applicable
(d) ...................................... Not Applicable
(e) ...................................... 102
Sec. 315 (a) ...................................... 601
(b) ...................................... 602
(c) ...................................... 601
(d) ...................................... 601
(e) ...................................... 514
Sec. 316 (a) ...................................... 101
(a) (1) (A) ...................................... 502
512
(a) (1) (B) ...................................... 513
(a) (2) ...................................... Not Applicable
(b) ...................................... 508
(c) ...................................... 104
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Sec. 317 (a) (1) ...................................... 503
(a) (2) ...................................... 504
(b) ...................................... 1003
Sec. 318 (a) ...................................... 107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE...................................................................................................... 1
Section 101. Definitions....................................................................................... 1
Section 102. Compliance Certificates and Opinions.............................................................. 10
Section 103. Form of Documents Delivered to Trustee............................................................ 10
Section 104. Acts of Holders; Record Dates..................................................................... 11
Section 105. Notices, Etc., to Trustee and Company............................................................. 13
Section 106. Notice to Holders; Waiver......................................................................... 13
Section 107. Conflict with Trust Indenture Act................................................................. 13
Section 108. Effect of Headings and Table of Contents.......................................................... 14
Section 109. Successors and Assigns............................................................................ 14
Section 110. Separability Clause............................................................................... 14
Section 111. Benefits of Indenture............................................................................. 14
Section 112. Governing Law..................................................................................... 14
Section 113. Legal Holidays.................................................................................... 14
ARTICLE TWO...................................................................................................... 14
Section 201. Forms Generally................................................................................... 14
Section 202. Form of Trustee's Certificate of Authentication................................................... 15
Section 203. Form of Legend for Global Securities.............................................................. 15
Section 204. Form of Conversion Notice......................................................................... 16
Section 205. Securities in Global Form......................................................................... 16
ARTICLE THREE.................................................................................................... 17
Section 301. Amount Unlimited; Issuable in Series.............................................................. 17
Section 302. Denominations..................................................................................... 19
Section 303. Execution, Authentication, Delivery and Dating.................................................... 20
Section 304. Temporary Securities.............................................................................. 21
Section 305. Registration, Registration of Transfer and Exchange............................................... 21
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.................................................. 23
Section 307. Payment of Interest; Interest Rights Preserved.................................................... 24
Section 308. Persons Deemed Owners............................................................................. 25
Section 309. Cancellation...................................................................................... 25
Section 310. Computation of Interest........................................................................... 26
ARTICLE FOUR..................................................................................................... 26
Section 401. Satisfaction and Discharge of Indenture........................................................... 26
Section 402. Application of Trust Money........................................................................ 27
ARTICLE FIVE..................................................................................................... 27
Section 501. Events of Default................................................................................. 27
Section 502. Acceleration of Maturity; Rescission and Annulment................................................ 29
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee................................... 30
Section 504. Trustee May File Proof of Claim................................................................... 30
Section 505. Trustee May Enforce Claims Without Possession of Securities....................................... 31
Section 506. Application of Money Collected.................................................................... 31
Section 507. Limitation on Suits............................................................................... 31
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest......................... 32
Section 509. Restoration of Rights and Remedies................................................................ 32
Section 510. Rights and Remedies Cumulative.................................................................... 32
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
Section 511. Delay or Omission Not Waiver...................................................................... 33
Section 512. Control by Holders................................................................................ 33
Section 513. Waiver of Past Defaults........................................................................... 33
Section 514. Undertaking for Costs............................................................................. 34
Section 515. Waiver of Usury, Stay or Extension Laws........................................................... 34
ARTICLE SIX...................................................................................................... 34
Section 601. Certain Duties and Responsibilities............................................................... 34
Section 602. Notice of Defaults................................................................................ 36
Section 603. Certain Rights of Trustee......................................................................... 36
Section 604. Not Responsible for Recitals or Issuance of Securities............................................ 37
Section 605. May Hold Securities............................................................................... 38
Section 606. Money Held in Trust............................................................................... 38
Section 607. Compensation and Reimbursement.................................................................... 38
Section 608. Conflicting Interests............................................................................. 39
Section 609. Corporate Trustee Required; Eligibility........................................................... 39
Section 610. Resignation and Removal, Appointment of Successor................................................. 39
Section 611. Acceptance of Appointment by Successor............................................................ 41
Section 612. Merger, Conversion, Consolidation or Succession to Business....................................... 42
Section 613. Preferential Collection of Claims Against Company................................................. 42
Section 614. Appointment of Authenticating Agent............................................................... 42
ARTICLE SEVEN.................................................................................................... 43
Section 701. Company to Furnish Trustee Names and Addresses of Holders........................................ 43
Section 702. Preservation of Information; Communications to Holders............................................ 44
Section 703. Reports by Trustee................................................................................ 44
Section 704. Reports by Company................................................................................ 44
Section 801. Company May Consolidate, Etc., Only on Certain Terms.............................................. 45
Section 802. Successor Substituted............................................................................. 45
ARTICLE NINE..................................................................................................... 46
Section 901. Supplemental Indentures Without Consent of Holders................................................ 46
Section 902. Supplemental Indentures With Consent of Holders................................................... 47
Section 903. Execution of Supplemental Indentures.............................................................. 48
Section 904. Effect of Supplemental Indentures................................................................. 48
Section 905. Conformity with Trust Indenture Act............................................................... 49
Section 906. Reference in Securities to Supplemental Indentures................................................ 49
ARTICLE TEN...................................................................................................... 49
Section 1001. Payment of Principal, Premium and Interest....................................................... 49
Section 1002. Maintenance of Office or Agency.................................................................. 49
Section 1003. Money for Securities Payments to be Held in Trust................................................ 50
Section 1004. Statement by Officers as to Default.............................................................. 51
Section 1005. Existence........................................................................................ 51
Section 1006. Maintenance of Properties........................................................................ 51
Section 1007. Payment of Taxes and Other Claims................................................................ 51
Section 1008. Waiver of Certain Covenants...................................................................... 52
Section 1009. Covenants as to Nuevo Trust...................................................................... 52
ARTICLE ELEVEN................................................................................................... 52
Section 1101. Applicability of Article......................................................................... 52
Section 1102. Election to Redeem; Notice to Trustee............................................................ 53
Section 1103. Selection by Trustee of Securities to be Redeemed................................................ 53
Section 1104. Notice of Redemption............................................................................. 54
Section 1105. Deposit of Redemption Price...................................................................... 54
Section 1106. Securities Payable on Redemption Date............................................................ 55
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
Section 1107. Securities Redeemed in Part...................................................................... 55
ARTICLE TWELVE................................................................................................... 56
Section 1201. Applicability of Article......................................................................... 56
Section 1202. Satisfaction of Sinking Fund Payments with Securities............................................ 56
Section 1203. Redemption of Securities for Sinking Fund........................................................ 56
ARTICLE THIRTEEN................................................................................................. 57
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance..................................... 57
Section 1302. Defeasance and Discharge......................................................................... 57
Section 1303. Covenant Defeasance.............................................................................. 57
Section 1304. Conditions to Defeasance or Covenant Defeasance.................................................. 58
Section 1305. Deposited Money and U.S. Government Obligations to be Held in Trust; Miscellaneous Provisions 60
Section 1306. Reinstatement.................................................................................... 60
ARTICLE FOURTEEN................................................................................................. 61
Section 1401. Conditions to Defeasance or Covenant Defeasance.................................................. 61
Section 1402. Exercise of Conversion Privilege................................................................. 61
Section 1403. No Fractional Shares............................................................................. 62
Section 1404. Adjustment of Conversion Price................................................................... 63
Section 1405. Notice of Certain Corporate Actions.............................................................. 63
Section 1406. Reservation of Shares of Common Stock............................................................ 64
Section 1407. Payment of Certain Taxes upon Conversion......................................................... 64
Section 1408. Nonassessability................................................................................. 64
Section 1409. Effect of Consolidation or Merger on Conversion Privilege........................................ 64
Section 1410. Duties of Trustee Regarding Conversion........................................................... 65
Section 1411. Repayment of Certain funds upon Conversion....................................................... 66
ARTICLE FIFTEEN.................................................................................................. 66
Section 1501. Securities Subordinate to Senior Indebtedness.................................................... 66
Section 1502. Payment Over of Proceeds Upon Dissolution........................................................ 66
Section 1503. Prior Payment to Senior Indebtedness Upon Acceleration of Securities............................. 68
Section 1504. No Payment When Senior Indebtedness in Default................................................... 68
Section 1505. Payment Permitted in Certain Situations.......................................................... 69
Section 1506. Subrogation to Rights of Holders of Senior Indebtedness.......................................... 69
Section 1507. Provisions Solely to Define Relative Rights...................................................... 69
Section 1508. Trustee to Effectuate Subordination.............................................................. 70
Section 1509. No Waiver of Subordination Provisions............................................................ 70
Section 1510. Notice to Trustee................................................................................ 70
Section 1511. Reliance on Judicial Order or Certificate of Liquidating......................................... 71
Section 1512. Trustee Not Fiduciary for Holders of Senior Indebtedness......................................... 71
Section 1513. Rights of Trustee as Holder of Senior Indebtedness............................................... 72
Section 1514. Article Applicable to Paying Agents.............................................................. 72
Section 1515. Certain Conversions Deemed Payment............................................................... 72
</TABLE>
(iii)
<PAGE>
SUBORDINATED INDENTURE, dated as of November 25, 1996, between Nuevo Energy
Company, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Company"), having its principal office at 1331
Lamar, Suite 1600, Houston, Texas 77010, and Wilmington Trust Company, a banking
corporation duly organized and existing under the laws of Delaware, as Trustee
(herein 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 unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of a series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean generally accepted accounting
principles, consistently applied, that are set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, which are effective on the date
of this Indenture;
<PAGE>
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing; provided, however, that any Person who does not own, directly or
-------- -------
indirectly, more than 5% of the outstanding voting stock of the Company shall
not be deemed to control the Company. For the purpose of this definition,
"voting stock" means Capital Stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of Capital Stock has such voting power by reason of any contingency.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any rights (other than debt
securities convertible into an equity interest), warrants or options exercisable
for, exchangeable for or convertible into such an equity interest in such
Person.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, person or mixed) that is required to be classified and
accounted for as a capital lease obligation under generally accepted accounting
principles.
-2-
<PAGE>
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets of
the Nuevo Trust which rank pari passu with Preferred Securities issued by the
Nuevo Trust; provided, however, that upon the occurrence of an Event of Default,
-------- -------
the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" means any Guarantee that the Company enters
into with Wilmington Trust Company, as trustee, or other Persons that operates
directly or indirectly for the benefit of holders of Common Securities of the
Nuevo Trust.
"Common Stock" includes any shares or stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which is not subject to redemption by the Company. Subject to
the anti-dilution provisions of any convertible Security, however, shares of
Common Stock of the Company issuable on conversion of a Security shall include
only shares of the class designated as Common Stock of the Company at the date
of any supplemental indenture, Board Resolution or other instrument authorizing
such Security or shares of any class of classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of the payment of dividends or the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company, provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman
of the Board, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Corporate Trust Office" means the designated office of the Trustee in
Wilmington, Delaware at which at any particular time its corporate trust
business shall be administered.
"Corporation" means a corporation, partnership, limited liability company
or trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
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"Debt" means, with respect to any Person, without duplication, (a) all
liabilities of such Person for borrowed money or for the deferred purchase price
of property or services (excluding any trade accounts payable and other accrued
current liabilities incurred in the ordinary course of business), and all
liabilities of such Person incurred in connection with any letters of credit,
bankers' acceptances or other similar credit transactions or any agreement to
purchase, redeem, exchange, convert or otherwise acquire for value any Capital
Stock of such Person, or any warrants, rights or options to acquire such Capital
Stock outstanding on the date of this Indenture or thereafter, (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all Debt of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade accounts payable arising in the ordinary
course of business, (d) all Capitalized Lease Obligations of such Person, (e)
all Debt referred to in the preceding clauses of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder of
such Debt has an existing right to be secured by) any lien upon property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Debt (the amount of such obligation being deemed to be the lesser of the
value of such property or asset or the amount of the obligation so secured), (f)
all guarantees by such Person of Debt referred to in this definition (including,
with respect to any Production Payments and Reserve Sales, any warranties or
guaranties of production or payment by such Person with respect to such
Production Payments and Reserve Sales but excluding other contractual
obligations of such Person with respect to such Production Payments and Reserve
Sales ), (g) all Redeemable Capital Stock of such Person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus accrued
dividends and (h) all obligations of such Person under or in respect of currency
exchange contracts, oil or natural gas price hedging arrangements and Interest
Rate Protection Obligations. For purposes hereof, the "maximum fixed repurchase
price" of any Redeemable Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased on any date on
which Debt shall be required to be determined pursuant to this Indenture, and if
such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be determined in good
faith by the board of directors of the issuer of such Redeemable Capital Stock;
provided, however, that if such Redeemable Capital Stock is not at the date of
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determination permitted or required to be repurchased, the "maximum fixed
repurchase price" shall be the book value of such Redeemable Capital Stock.
Subject to clause (f) of the first sentence of this definition, Production
Payments and Reserve Sales shall not be deemed "Debt."
"Declaration", with respect to the Nuevo Trust, means the Amended and
Restated Declaration of Trust of the Nuevo Trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the
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Exchange Act that is designated to act as Depositary for such Securities as
contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 203 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Guarantor" means Nuevo Energy Company, a Delaware corporation, in its
capacity as guarantor under any Trust Securities Guarantees.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Institutional Trustee" has the meaning set forth in the Declaration of the
Nuevo Trust.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
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"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(5).
"Nuevo Trust" means Nuevo Financing I, a Delaware statutory business trust.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
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principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date,
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(A) the principal amount of an Original Issue Discount Security which shall be
deemed to be Outstanding shall be the amount of the principal thereof which
would be due and payable as of such date upon acceleration of the Maturity
thereof to such date pursuant to Section 502, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not
determinable, the principal amount of such Security which shall be deemed to be
Outstanding shall be the amount as specified or determined as contemplated by
Section 301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding
shall be the U.S. dollar equivalent, determined as of such date in the manner
provided as contemplated by Section 301, of the principal amount of such
Security (or, in the case of a Security described in Clause (A) or (B) above, of
the amount determined as provided in such Clause), and (D) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company (other than the Nuevo Trust, if it has issued Preferred Securities) 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, waiver
or other action, only Securities which the Trustee actually knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" means undivided beneficial interests in the assets
of the Nuevo Trust which rank pari passu with Common Securities issued by the
Nuevo Trust; provided, however, that upon the occurrence of an Event of Default,
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the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any Guarantee that the Guarantor may
enter into with Wilmington Trust Company, as trustee, or other Persons that
operates directly or indirectly for the benefit of holders of Preferred
Securities of the Nuevo Trust.
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"Production Payments and Reserve Sales" means the grant or transfer to any
Person of a royalty, overriding royalty, net profits interest, production
payment (whether volumetric or dollar denominated), master limited partnership
interest or other interest in oil and gas properties, reserves or the right to
receive all or a portion of the production or the proceeds from the sale of
production attributable to such properties where the holder of such interest has
recourse solely to such production or proceeds of production, subject to the
obligation of the grantor or transferor to operate and maintain, or cause the
subject interest to be operated and maintained, in a reasonably prudent manner
or other customary standard or subject to the obligation of the grantor or
transferor to indemnify for environmental matters.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or by contract or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to the final date specified in the
Securities as the Stated Maturity or is redeemable at the option of the holder
thereof at any time prior to such final Stated Maturity, or is convertible into
or exchangeable for debt securities at any time prior to such final Stated
Maturity.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee, including any vice
president, any assistant vice president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust Office of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company to the
extent that such claim for post-petition
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interest is allowed in such proceeding), on any Debt of the Company, whether
incurred on or prior to the date of this Indenture or thereafter incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right or payment to the Securities, or to other Debt of the Company which is
pari passu with, or subordinated to the Securities; provided, however, that
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Senior Indebtedness shall not be deemed to include the Securities or any Debt of
the Company to any Subsidiary of the Company.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding voting stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, have at least a majority ownership
and power to direct the policies, management and affairs thereof. For the
purposes of this definition "voting stock" means Capital Stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of Capital Stock has such voting power by reason of any
contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
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the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities of the
Nuevo Trust.
"Trust Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
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SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a
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new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (1) any Notice of Default, (2) any declaration of
acceleration referred to in Section 502, (3) any request to institute
proceedings referred to in Section 507(2) or (4) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
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SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration; and
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the 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 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Holders and the holders of Senior Indebtedness, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series shall be in such form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and
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delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
WILMINGTON TRUST COMPANY, as Trustee
By:__________________________________
Authorized Signatory
SECTION 203. FORM OF LEGEND FOR GLOBAL SECURITIES.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR
IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 204. FORM OF CONVERSION NOTICE.
The form of conversion notice for the conversion of Securities into shares
of Common Stock or other securities of the Company shall be in substantially the
form included with the applicable form of Securities as shall be established
pursuant to Section 201 hereinabove.
SECTION 205. SECURITIES IN GLOBAL FORM.
If Securities of any series are issuable as Global Securities, as specified
as contemplated by Section 301, then, notwithstanding the provisions of Section
301, any such Security shall represent such of the Outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities of such series from
time to time endorsed thereon and that the
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aggregate amount of Outstanding Securities of such series from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities of such
series represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities of such series
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 303 or
Section 304. Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Global Security in the
manner and upon instructions given by the Person or Persons specified therein or
in the applicable Company Order. If a Company Order pursuant to Section 303 or
304 has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Global Security shall
be in writing but need not comply with Section 102 and need not be accompanied
by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
with written instructions (which need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Global Security shall be made to the Person or
Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a Global Security as shall be specified in
a written statement of the Holder of such Global Security.
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for
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Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the
series is payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable or where the
Securities of the series may be surrendered for conversion or exchange;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) the right, if any, to extend the interest payment periods in
respect of the Securities of the series and the duration of such extension;
(10) the terms of any right to convert or exchange Securities of the
series, either at the election of the Holder thereof or the Company, into
or for shares of Common Stock of the Company or other securities or
property, including, without limitation, the period or periods within which
and the price or prices (including adjustments thereto) at which any
Securities of the series shall be converted or exchanged, in whole or in
part and any other provision in addition to or in lieu of those set forth
in this Indenture;
(11) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
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(12) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(13) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(14) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or the
Holder thereof, in one or more currencies or currency units other than that
or those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which
such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(15) if other than the entire principal amount thereof, the portion of
the principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(16) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or
which shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to
be the principal amount shall be determined);
(17) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or Section
1303 or both such Sections and, if other than by a Board Resolution, the
manner in which any election by the Company to defease such Securities
shall be evidenced;
(18) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 203 and any
circumstances in addition to or in lieu of those set forth in Clause (2) of
the last paragraph of Section 305 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
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(19) any addition to or change in the Events of Default which applies
to any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 502;
(20) any addition to or change in the covenants set forth in Article
Ten which applies to Securities of the series;
(21) any restriction or condition on the transferability of the
Securities;
(22) the subordination terms of the Securities of the series; and
(23) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, one of its Vice Chairmen of the Board, its President or one of its
Vice Presidents, under its corporate seal affixed thereto or reproduced thereon
and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and
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delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, prior to authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such 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, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
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SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided. The Security Registrar shall be
entitled to the rights and protections extended to the Trustee hereunder.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security, (C) the Company, in
its sole discretion, shall have determined that such Global Security be so
exchangeable or (D) there shall exist such circumstances, if any, in
addition to or in lieu of the foregoing as have been specified for this
purpose as contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a
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Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company or
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record
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Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (1) or
(2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be given to each Holder of Securities of such series in the manner set
forth in Section 106, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted into Common Stock of the
Company after any Regular Record Date and prior to the opening of business on
the next succeeding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest
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whose Stated Maturity is after the date of conversion of such Security shall not
be payable.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer, exchange or
conversion of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when either (A) all Securities
theretofore authenticated and delivered (other than (i) Securities which have
been destroyed, lost or stolen and which have been replaced or paid as provided
in Section 306 and (ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or (B) all such
Securities not theretofore delivered to the Trustee for cancellation (i) have
become due and payable, or (ii) will
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become due and payable at their Stated Maturity within one year, or (iii) are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company, in the case of (i), (ii) or
(iii) above, has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose money in an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal and any premium and interest to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
rights of the Trustee under Sections 507(3), 601 and 603, the obligations of the
Company to the Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of Clause (l) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
Money deposited pursuant to this Section not in violation of this Indenture
shall not be subject to claims of the holders of Senior Indebtedness under
Article Fifteen hereof.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days (whether or not such payment is prohibited by the
subordination provisions
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set forth in Article Fifteen hereof); provided, however, that a valid
extension of an interest payment period by the Company in accordance with
the terms of any indenture supplemental hereto shall not constitute a
default in the payment of interest for this purpose; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity (whether or not such payment is
prohibited by the subordination provisions set forth in Article Fifteen
hereof); or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) if the Securities of that series are convertible or exchangeable
into or for shares of Common Stock of the Company or other securities, cash
or other property pursuant to any supplemental indenture, Board Resolution
or other instrument authorizing Securities of that series, failure by the
Company to convert such Securities (whether or not such conversion or
exchange is prohibited by the subordination provisions set forth in Article
Fifteen hereof); or
(5) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding-up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking
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reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(8) in the event Securities of that series are issued to the Nuevo
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by the Nuevo Trust, the Nuevo Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise terminated its
existence except in connection with (A) the distribution of Securities of
that series to holders of Trust Securities in liquidation of their interest
in the Nuevo Trust, (B) the redemption of all of the outstanding Trust
Securities of the Nuevo Trust or (C) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of the Nuevo Trust; or
(9) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501(7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
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(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and any premium and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities and if such Securities are held by
the Nuevo Trust or a trustee of such trust, without duplication of any
other amounts paid by such Nuevo Trust or trustee in respect thereof, upon
overdue installments of interest at the rate per annum expressed in such
Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this
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Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOF OF CLAIM.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
-------- --------
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 607;
Second: To the payment of all Senior Indebtedness of the Company to the
extent required by Article Fifteen hereof;
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Third: To the payment of the amounts then due and unpaid for principal and
any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively; and
Fourth: To the payment of the remainder, if any, to the Company.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, but subject to
Article Fifteen of this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
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SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
connection therewith, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series
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waive any past default hereunder with respect to such
series and its consequences, except a default:
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected;
provided, however, that if the Securities of such series are held by the Nuevo
- -------- -------
Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority in liquidation preference
of Trust Securities of the Nuevo Trust shall have consented to such waiver or
modification to such waiver; provided, further, that if the consent of the
Holder of each Outstanding Security of such series is required, such waiver
shall not be effective until each holder of the Trust Securities of the Nuevo
Trust shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) With respect to the Holders of any series of Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to Securities of that series and after the curing or waiving of all
Events of Default which may have occurred with respect to Securities of that
series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture.
(b) In case an Event of Default with respect to the Securities of a series
has occurred (which has not been cured or waived) the Trustee shall exercise the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(i) prior to the occurrence of an Event of Default with respect to
Securities of a series and after the curing and waiving of all
Events of Default with respect to that series which may have
occurred
(1) the duties and obligations of the Trustee with respect to
Securities of a 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 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;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith, in accordance with the
direction of the Holders of the Security pursuant to Section 512
hereof, relating to the time, method
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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.
(d) Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(5) with respect to Securities of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(1) 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, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) except as otherwise provided in this Section 603, whenever in the
administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate, 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 or omitted by it under the provisions of this
Indenture upon the faith thereof;
(4) the Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete
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authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity in form and
substance reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived) to exercise with respect to
Securities of that series such of the rights and powers vested in it by
this Indenture, and to 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; and
(9) any application by the Trustee for written instructions from the
appropriate party or parties may, at the option of the Trustee, set forth
in writing any action proposed to be taken or omitted by the Trustee under
this Indenture and the date on and/or after which such action shall be
taken or such omission shall be effective. The Trustee shall not be liable
for any action taken by, or omission of, the Trustee in accordance with a
proposal included in such application on or after the date specified in
such application (which date shall not be less than three Business Days
after the date the appropriate party or parties actually receives such
application, unless any such party shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date
in the case of an omission), the Trustee shall have received written
instructions in response to such application specifying the action to be
taken or omitted.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee
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nor any Authenticating Agent assumes any responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Company of Securities or
the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such reasonable compensation for all services rendered by it
hereunder as shall be agreed to in writing between the Company and the
Trustee (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense (including taxes, other than taxes imposed on
or measured by the income, assets, net worth or shareholders' capital of
the Trustee) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) hereof or Section 501(7) hereof,
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
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The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. RESIGNATION AND REMOVAL, APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of (i) each resignation and each removal of
the Trustee with respect to the Securities of any series, (ii) each appointment
of a successor Trustee with respect to the Securities of any series, and (iii)
upon the Company's receipt of the notice of succession required by Section 612
hereof, each succession of a Trustee pursuant to Section 612 hereof to all
Holders of Securities of such series in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
--------
however, that such Person shall give prompt notice to the Company of its
- -------
succession pursuant to this Section. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Person organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any Person succeeding to the corporate agency or corporate trust business of
an Authenticating Agent,
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shall continue to be an Authenticating Agent, provided such Person shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Authentication Date: ____________________, Authenticating Agent
By:
-----------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than January 31 and July 31 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the
preceding January 15 or July 15, as the case may be, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form
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and content as of a date not more than 15 days prior to the time such list
is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 703. 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 times and in the manner provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR TRANSFER
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person or
sell, lease or otherwise transfer its properties and assets as, or substantially
as, an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or sell, lease or otherwise transfer its properties and assets as,
or substantially as, an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale or transfer, or which leases, the properties and assets of
the Company as, or substantially as, an entirety shall be a Corporation
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of and any premium and interest on all the Securities and
the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
sale, lease or other transfer and, if a supplemental indenture is required
in connection with much transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any sale, lease or other transfer of the properties and
assets of the Company as, or substantially as, an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such sale, lease or other transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611; or
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(8) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article Fourteen hereof, including
providing for the conversion of the Securities into any security or
property (other than the Common Stock of the Company); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
-------- -------
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any), or any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other Security
which would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or adversely affect any right of
repayment at the option of a Holder of any Security, or reduce the amount
of, or postpone the date fixed for, the payment of any sinking fund or
analogous obligation, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
-------- -------
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section
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and Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(7), or
(4) make any change that adversely affects the right to convert any
Security of any series as provided in Article Fourteen hereof or pursuant
to Section 301 (except as permitted by Section 901) or decrease the
conversion rate or increase the conversion price of any such Security of
such series, or
(5) make any change in Article Fifteen hereof that adversely affects
the rights of any Holders of Outstanding Securities of such series.
If the Securities of such series are held by the Nuevo Trust or a trustee of
such trust, such supplemental indenture shall not be effective until the holders
of a majority in liquidation preference of Trust Securities of the Nuevo Trust
shall have consented to such supplemental indenture; provided, that if the
consent of the Holder of each Outstanding Security of such series is required,
such supplemental indenture shall not be effective until each holder of the
Trust Securities of the Nuevo Trust shall have consented to such supplemental
indenture.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
Prior to executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trust created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT..
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
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SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the City of New York and in each other Place
of Payment for any series of Securities an office or agency where Securities of
that series may be presented or surrendered for payment, where Securities of
that series may be surrendered for registration of transfer, exchange or
conversion and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
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any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and
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interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
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required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company. The Paying Agent shall be entitled to the rights
and protections extended to the Trustee hereunder.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating
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whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
SECTION 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
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Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
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nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. 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 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
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1008. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Company may, with respect to the Securities of any series,
omit in any particular instance to comply with any term, provision or condition
set forth in any covenant provided pursuant to Section 301(20), 901(2) or 901(6)
for the benefit of the Holders of such series or in any of Sections 1006, 1007
and 1009, if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities of such series shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
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extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
SECTION 1009. COVENANTS AS TO NUEVO TRUST.
In the event Securities are issued to the Nuevo Trust or a trustee of such
trust in connection with the issuance of Trust Securities by the Nuevo Trust,
for so long as such Trust Securities remain outstanding, the Company will (1)
maintain 100% direct or indirect ownership of the Common Securities of the Nuevo
Trust (provided, however, that any permitted successor of the Company under this
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Indenture may succeed to the Company's ownership of the Common Securities), (2)
use its reasonable efforts to cause the Nuevo Trust (A) to remain a statutory
business trust, except in connection with a distribution of Securities of such
series to the holders of Trust Securities in liquidation of the Nuevo Trust, the
redemption of all of the Trust Securities of the Nuevo Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of the Nuevo Trust, and (B) to continue to be classified as a grantor trust for
United States federal income tax purposes and (3) use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Securities of such series.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company
of less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the
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Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of a portion of the principal amount of any
Security of such series, provided that the unredeemed portion of the principal
amount of any Security shall be in an authorized denomination (which shall not
be less than the minimum authorized denomination) for such Security. If less
than all the Securities of such series and of a specified tenor are to be
redeemed (unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part,
the unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
If Securities of any series selected for partial redemption are converted
in part before termination of the conversion right with respect to the portion
of the Securities of such series so selected, the converted portion of the
Securities of such series shall be deemed (so far as may be) to be the portion
selected for redemption. Securities (or portions thereof) which have been
converted during a selection of Securities of such series to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one 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 Security of such series.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case
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of partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities of any series consisting of a single Security are to be
redeemed, the principal amount of the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case,
and
(7) if applicable, the conversion rate or price, the date on which the
right to convert the Securities of such series to be redeemed will
terminate and the place or places where such Securities may be surrendered
for conversion.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
If any Security called for redemption is converted into Common Stock of the
Company, any money deposited with the Trustee or with any Paying Agent or so
segregated and held in trust for the redemption of such Security shall (subject
to any right of the Holder of such Security or any Predecessor Security to
receive interest as provided in the last paragraph of Section 307) be paid to
the Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
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contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities 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 such
Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
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SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if
any) to have Section 1303 applied to such Securities.
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SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Sections 1006, 1007 and
1009, and any covenants provided pursuant to Section 301(20), 901(2) or 901(6)
for the benefit of the Holders of such Securities and (2) the occurrence of any
event specified in Sections 501(5) (with respect to any of Sections 1006, 1007
and 1009, and any such covenants provided pursuant to Section 301(20), 901(2) or
901(6)) and 501(9) shall be deemed not to be or result in an Event of Default,
in each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 501(5)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section 1302 or
Section 1303 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depository receipt, or with respect
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to any specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest evidenced by such depository
receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there
has been a change in the applicable Federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning
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of the Investment Company Act unless such trust shall be registered under
such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
(10) No default in the payment of the principal of and any premium and
interest on any Senior Indebtedness beyond any applicable grace period
shall have occurred and be continuing.
(11) No other default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in the acceleration
of such Senior Indebtedness.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and
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reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
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the Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
ARTICLE FOURTEEN
CONVERSION OF SECURITIES
SECTION 1401. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to the Securities of any
series which are convertible into shares of Common Stock of the Company, and the
issuance of such shares of Common Stock upon the conversion of Securities of
such series, except as otherwise specified as contemplated by Section 301 for
the Securities of such series. The terms and provisions applicable to the
conversion of Securities of any series into securities of the Company (other
than Common Stock) shall, if applicable, be set forth in an Officers'
Certificate or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of such series in accordance with Section 301.
SECTION 1402. EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise a conversion privilege, the Holder of a Security of
any series with such a privilege shall surrender such Security to the Company at
the office or agency maintained for that purpose pursuant to Section 1002,
accompanied by written notice to the Company that the Holder elects to convert
such Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued. Securities of such
series surrendered for conversion shall (if so required by the Company or the
Trustee) be duly endorsed by or accompanied by instruments of transfer in forms
satisfactory to the Company and the Trustee duly executed by the Holder or its
attorney duly authorized in writing; and, if expressly specified, as
contemplated by Section 301, to be applicable to any series of Securities,
Securities of such series so surrendered for conversion during the period from
the close of business on any Regular Record Date to the opening of business on
the next succeeding Interest Payment Date (excluding Securities or portions
thereof called for redemption during such period) shall also be accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of such Security
then being converted, and such interest shall be payable to such Holder
notwithstanding the conversion of such Security, subject to the provisions of
Section 307 relating to the payment of Defaulted Interest by the Company. As
promptly as practicable after the receipt of such notice and of any payment
required pursuant to a Board Resolution and, subject to Section 301, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of the Securities and the surrender of such Securities in accordance with
such reasonable regulations as the Company may prescribe, the Company shall
issue and shall deliver, at the office or agency at which such Security is
surrendered, to such Holder or on its written order, a certificate
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or certificates for the number of full shares of Common Stock issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Common Stock otherwise issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of business on
the date on which such notice and such payment, if required, shall have been
received in proper order for conversion by the Company and such Security shall
have been surrendered as aforesaid (unless such Holder shall have so surrendered
such Security and shall have instructed the Company to effect the conversion on
a particular date following such surrender and such Holder shall be entitled to
convert such Security on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such date)
and at such time the rights of the Holder of such Security as such Security
Holder shall cease and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock of the Company shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby. Except as set forth above
and subject to the final paragraph of Section 307, no payment or adjustment
shall be made upon any conversion on account of any interest accrued on the
Securities of such series surrendered for conversion or on account of any
dividends on the Common Stock of the Company issued upon such conversion.
In the case of any Security of any series which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Security or Securities of such
series, of authorized denominations, in aggregate principal amount equal to the
unconverted portion of such Security.
SECTION 1403. NO FRACTIONAL SHARES.
No fractional share of Common Stock of the Company shall be issued upon
conversions of Securities of any series. If more than one Security of such
series shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion shall be computed
on the basis of the aggregate principal amount of the Securities of such series
(or specified portions thereof to the extent permitted hereby) so surrendered.
If, except for the provisions of this Section 1403, any Holder of a Security or
Securities of such series would be entitled to a fractional share of Common
Stock of the Company upon the conversion of such Security or Securities, or
specified portions thereof, the Company shall pay to such Holder an amount in
cash equal to the current market value of such fractional share computed, (1) if
such Common Stock is listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (2) if such
Common Stock is not at the time so listed or admitted to unlisted trading
privileges on a national securities exchange, on the basis of the average of the
bid and asked prices of such Common Stock in the over-the-counter market, on the
last trading day prior to the date of conversion, as reported by the National
Quotation Bureau, Incorporated or similar organization if the National Quotation
Bureau, Incorporated is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of Directors. For
purposes of this Section, "trading day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday other than any day on which the Common Stock is
not traded on the New York Stock Exchange, or if the
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Common Stock is not traded on the New York Stock Exchange, on the principal
exchange or market on which the Common Stock is traded or quoted.
SECTION 1404. ADJUSTMENT OF CONVERSION PRICE.
The conversion price of Securities of any series that is convertible into
Common Stock of the Company shall be adjusted for any stock dividends, stock
splits, reclassification, combinations or similar transactions in accordance
with the terms of the supplemental indenture or Board Resolution setting forth
the terms of the Securities of such series.
Whenever the conversion price is adjusted, the Company shall compute the
adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall forthwith
be filed at each office or agency maintained for the purpose of conversion of
Securities of such series pursuant to Section 1002 and, if different, with the
Trustee. The Company shall forthwith cause a notice setting forth the adjusted
conversion price to be mailed, first class postage prepaid, to each Holder of
Securities of such series at its address appearing on the Security Register and
to any conversion agent other than the Trustee.
SECTION 1405. NOTICE OF CERTAIN CORPORATE ACTIONS.
In case:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings (other than a dividend for which approval of any shareholders of
the Company is required); or
(2) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights (other than
(i) any such grant for which approval of any shareholders of the Company is
required or (ii) rights anticipated to be declared in the first quarter of
1997 by the Board of Directors pursuant to a rights agreement to be entered
into between the Company and the Person named therein as Rights Agent); or
(3) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock) or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the sale of all or substantially all of the
assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 20 days (or 10 days in any case specified in Clause
(1) or (2) above) prior to the applicable
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record date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights,
options or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined, or (B) the date
on which such reclassification, consolidation, merger, share exchange, sale,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, dissolution, liquidation or winding-up. If at any time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
SECTION 1406. RESERVATION OF SHARES OF COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Securities, the full
number of shares of Common Stock of the Company then issuable upon the
conversion of all outstanding Securities of any series that has conversion
rights.
SECTION 1407. PAYMENT OF CERTAIN TAXES UPON CONVERSION.
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of its Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of its Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.
SECTION 1408. NONASSESSABILITY.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue in accordance with the terms
hereof be duly and validly issued and fully paid and nonassessable.
SECTION 1409. EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE.
Unless otherwise provided as contemplated by Section 301 with respect to
Securities of any series, in case of any consolidation of the Company with, or
merger of the Company into or with any other Person, or in case of any sale of
all or substantially all of the properties and assets of the Company, the
Company or the Person formed by such consolidation or the Person into which the
Company shall have been merged or the Person which shall have acquired such
properties and assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security then
outstanding of any series that is convertible into Common Stock shall have the
right, which right shall be the exclusive conversion right thereafter available
to said Holder (until the expiration of the conversion right of such Security),
to convert such Security into the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such consolidation,
merger or sale by a holder of the number of shares of
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Common Stock into which such Security might have been converted immediately
prior to such consolidation, merger or sale, subject to compliance with the
other provisions of this Indenture, such Security and such supplemental
indenture. Such supplemental indenture shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
such Security. The above provisions of this Section shall similarly apply to
successive consolidations, mergers or sales. Unless otherwise provided as
contemplated by Section 301 with respect to Securities of any series, it is
expressly agreed and understood that anything in this Indenture to the contrary
notwithstanding, if, pursuant to such merger, consolidation or sale, holders of
outstanding shares of Common Stock do not receive shares of common stock of the
surviving Corporation but receive other securities, cash or other property or
any combination thereof, Holders of Securities shall not have the right to
thereafter convert their Securities into common stock of the surviving
Corporation or the Corporation which shall have acquired such properties and
assets, but rather, shall have the right upon such conversion to receive the
other securities, cash or other property receivable by a holder of the number of
shares of Common Stock into which the Securities held by such Holder might have
been converted immediately prior to such consolidation, merger or sale, all as
more fully provided in the first sentence of this Section 1409. Anything in this
Section 1409 to the contrary notwithstanding, the provisions of this Section
1409 shall not apply to a merger of another Person with or into the Company
pursuant to which both of the following conditions are applicable: (1) the
Company is the surviving Corporation and (2) the outstanding shares of Common
Stock are not changed or converted into any other securities or property
(including cash) or changed in number or character or reclassified pursuant to
the terms of such merger.
As evidence of the kind and amount of shares of stock or other securities
or property (including cash) into which Securities may properly be convertible
after any such consolidation, merger or sale, or as to the appropriate
adjustments of the conversion prices applicable with respect thereto, the
Trustee shall be furnished with and may accept the certificate or opinion of an
independent certified public accountant with respect thereto; and, in the
absence of bad faith on the part of the Trustee, the Trustee may conclusively
rely thereon, and shall not be responsible or accountable to any Holder of
Securities for any provision in conformity therewith or approved by such
independent certified public accountant which may be contained in said
supplemental indenture.
SECTION 1410. DUTIES OF TRUSTEE REGARDING CONVERSION.
Neither the Trustee nor any conversion agent shall at any time be under any
duty or responsibility to any Holder of Securities of any series that is
convertible into Common Stock to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
whether herein or in any supplemental indenture (or whether a supplemental
indenture need be entered into), any resolutions of the Board of Directors or
written instrument executed by one or more officers of the Company provided to
be employed in making the same. Neither the Trustee nor any conversion agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Securities and
neither the Trustee nor any conversion agent makes any representation with
respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion or
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to comply with any of the covenants of the Company contained in this Article
Fourteen or in the applicable supplemental indenture, resolutions of the Board
of Directors or written instrument executed by one or more duly authorized
officers of the Company. All Securities delivered for conversion shall be
delivered to the Trustee to be canceled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 309.
SECTION 1411. REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.
Any funds which at any time shall have been deposited by the Company or on
its behalf with the Trustee or any other Paying Agent for the purpose of paying
the principal of, and premium, if any, and interest, if any, on any of the
Securities (including funds deposited for the sinking fund referred to in
Article Twelve hereof) and which shall not be required for such purposes because
of the conversion of such Securities as provided in this Article Fourteen shall
after such conversion be repaid to the Company by the Trustee upon the Company's
written request.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder, by the Holder's
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Security and the payment of the principal of and premium and interest on
each and all of the Securities are hereby expressly made subordinate and junior
in right of payment to the prior payment in full of all Senior Indebtedness of
the Company, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 1502. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
similar proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal or of any premium or interest on the Securities; and upon any
such dissolution or winding-up or liquidation or reorganization any payment by
the Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Securities or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
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trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Securities or to the
Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other Corporation provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Indebtedness which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets as, or substantially as, an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets as, or substantially as, an entirety, as the
case may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Eight.
SECTION 1503. PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF
SECURITIES.
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of Senior Indebtedness shall
be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness or provision shall be made for such
payment in cash, before the Holders of the Securities are entitled to receive
any payment (including any payment which may be payable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment of
the Securities) by the Company on account of the principal of or any premium or
interest on the Securities or on account of the purchase or other acquisition of
Securities; provided, however, that nothing in this Section shall prevent the
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satisfaction of any sinking fund payment in accordance with Article Twelve by
delivering
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and crediting pursuant to Section 1202 Securities which have been acquired (upon
redemption or otherwise) prior to such declaration of acceleration or which have
been converted pursuant to Article Fourteen.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 1502 would be applicable.
SECTION 1504. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default, or
in the event that any other event has occurred and is continuing on the basis of
which the holders of any Senior Indebtedness may accelerate the maturity thereof
or demand payment in full, then, in any such case, no payment shall be made by
the Company with respect to the principal (including redemption and sinking fund
payments) of, or premium, if any, or interest on the Securities until such
default is cured or waived or ceases to exist or any such acceleration or demand
for payment has been rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 1504, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 1505. PAYMENT PERMITTED IN CERTAIN SITUATIONS.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (1) the Company, at any time except during the
pendency of any dissolution, winding-up, liquidation, reorganization, assignment
for the benefit of creditors or marshaling of assets and liabilities of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or similar proceedings of the Company referred to in Section 1502
or under the conditions described in Section 1503 or 1504, from making payments
at any time of principal of, or premium, if any, or interest on the Securities,
or (2) the application by the Trustee of any money deposited with it hereunder
to the payment of or on account of the principal of, or premium, if any, or
interest on the Securities or the retention of such payment by the Holders, if,
at the time of
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such application by the Trustee, it did not have actual knowledge that such
payment would have been prohibited by the provisions of this Article.
SECTION 1506. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness or the provision
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders of
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article (equally and ratably with the holders of indebtedness of the
Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Securities are subordinated to
the Senior Indebtedness and is entitled to like rights of subrogation) to the
rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of and any premium and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to or for the benefit of the holders
of Senior Indebtedness by Holders of Securities or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of Securities, be deemed to be a payment or distribution by the Company
to or on account of the Senior Indebtedness.
SECTION 1507. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of Securities on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (1) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of Securities the principal of and any premium and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (2) affect the relative rights against the Company of the
Holders of Securities and creditors of the Company, as the case may be, other
than the holders of Senior Indebtedness; or (3) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 1508. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
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SECTION 1509. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of Securities, without
incurring responsibility to the Holders of Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of Securities to the holders of Senior Indebtedness do
any one or more of the following: (1) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Indebtedness
or otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection of Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 1510. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee in respect of any Securities pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of any Securities pursuant to the
provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a holder
or holders of Senior Indebtedness or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 602, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall have not received the notice
-------- -------
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or any premium
or interest on any Securities), then, anything herein contained to the contrary
notwithstanding, the Trustee (1) shall have full power and authority to receive
such money and to apply the same to the purposes for which it was received and
(2) shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.
Subject to the provisions of Section 602, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
therefor). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this
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<PAGE>
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 1511. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 603, and the
Holders of Securities shall be entitled to conclusively rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 1512. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of such Senior Indebtedness shall be read into this
Indenture against the Trustee. 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 or creditors if it shall in good faith pay over or distribute
to Holders of Securities or to the Company or to any other Person cash, property
or securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article or otherwise.
SECTION 1513. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1514. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents
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<PAGE>
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 1513 shall not apply
-------- -------
to the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
SECTION 1515. CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article only, (1) the issuance and delivery of
junior securities (or cash paid in lieu of fractional shares) upon conversion of
Securities in accordance with Article Fourteen, or pursuant to the terms set
forth in an Officers' Certificate or established in one or more indentures
supplemental hereto in accordance with Section 301, shall not be deemed to
constitute a payment or distribution on account of the principal of or premium
or interest on Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities and cash paid in lieu of fractional
shares) upon conversion of a Security shall be deemed to constitute payment on
account of the principal of such Security. For the purposes of this Section,
the term "junior securities" means (A) shares of any stock of any class of the
Company and (B) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of
Securities, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article Fourteen.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
NUEVO ENERGY COMPANY
By:____________________________________
Robert M. King, Senior Vice
President and Chief Financial
Officer
WILMINGTON TRUST COMPANY
By:____________________________________
Name:
Title:
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<PAGE>
EXHIBIT 4.3
================================================================================
NUEVO ENERGY COMPANY
To
Wilmington Trust Company
Trustee
________________
FIRST SUPPLEMENTAL SUBORDINATED INDENTURE
________________
Dated as of December 23, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.................................................. 2
SECTION 1.1. DEFINITION OF TERMS........................................ 2
ARTICLE II. GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES.. 4
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT........................... 4
SECTION 2.2. MATURITY................................................... 4
SECTION 2.3. FORM AND PAYMENT........................................... 4
SECTION 2.4. GLOBAL DEBENTURE........................................... 4
SECTION 2.5. INTEREST................................................... 5
SECTION 2.6. ENFORCEMENT RIGHTS......................................... 6
ARTICLE III. REDEMPTION OF THE CONVERTIBLE DEBENTURES................... 7
SECTION 3.1. SPECIAL EVENT REDEMPTION................................... 7
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY............................. 7
SECTION 3.3. NO SINKING FUND............................................ 8
ARTICLE IV. EXTENSION OF INTEREST PAYMENT PERIOD........................ 8
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD....................... 8
SECTION 4.2. NOTICE OF EXTENSION........................................ 9
SECTION 4.3. LIMITATION OF TRANSACTION.................................. 10
ARTICLE V. EXPENSES..................................................... 10
SECTION 5.1. PAYMENT OF EXPENSES........................................ 10
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL........................ 11
ARTICLE VI. COVENANT TO LIST ON EXCHANGE................................ 11
SECTION 6.1. LISTING ON AN EXCHANGE..................................... 11
ARTICLE VII. CONVERSION OF CONVERTIBLE DEBENTURES....................... 11
SECTION 7.1. CONVERSION RIGHTS.......................................... 11
SECTION 7.2. CONVERSION PROCEDURES...................................... 12
SECTION 7.3. CONVERSION PRICE........................................... 13
SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE............................. 20
SECTION 7.5. NOTICE OF CERTAIN EVENTS................................... 23
SECTION 7.6. COMPANY TO PROVIDE STOCK................................... 24
SECTION 7.7 EMPLOYEE BENEFIT PLANS....................................... 25
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.................................. 25
SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS............................ 26
ARTICLE VIII. FORM OF CONVERTIBLE DEBENTURE............................. 27
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.............................. 27
ARTICLE IX. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.................... 36
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES................... 36
ARTICLE X. MISCELLANEOUS................................................ 37
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE... 37
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS...................... 37
SECTION 10.3. GOVERNING LAW............................................. 37
SECTION 10.4. SEPARABILITY............................................... 37
SECTION 10.5. COUNTERPARTS.............................................. 37
</TABLE>
i
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of December 23, 1996 (the "First
Supplemental Indenture"), between Nuevo Energy Company, a Delaware corporation
(the "Company"), and Wilmington Trust Company, as trustee (the "Trustee") under
the Subordinated Indenture dated as of November 25, 1996 between the Company and
the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured subordinated debt
securities to be issued from time to time in one or more series as might be
determined by the Company under the Indenture, in an unlimited aggregate
principal amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 5.75% Convertible Subordinated Debentures due December 15, 2026 (the
"Convertible Debentures"), the form and substance of such Convertible Debentures
and the terms, provisions and conditions thereof to be set forth as provided in
the Indenture and this First Supplemental Indenture;
WHEREAS, Nuevo Financing I, a Delaware statutory business trust (the
"Trust"), has offered to the public $100,000,000 aggregate liquidation amount
($115,000,000 if the Underwriters' over-allotment option is exercised in full)
of its $2.875 Term Convertible Securities, Series A (the "Trust Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $3,092,780
aggregate liquidation amount ($3,556,700 if the Underwriters' over-allotment
option is exercised in full) of its Common Securities, in $103,092,780 aggregate
principal amount of the Convertible Debentures ($118,556,700 if the
Underwriters' over-allotment option is exercised in full); and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of the
Convertible Debentures by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Convertible
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
<PAGE>
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS.
For all purposes of the First Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Indenture have the same meanings
when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meaning assigned to them in
this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust Indenture
Act, whether directly or by reference therein, have the meanings assigned to
them therein;
(d) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States of America, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect to
any computation required or permitted hereunder shall mean such accounting
principles, consistently applied, that are set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States of America which are effective on the date of the Indenture;
(e) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(f) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this First Supplemental Indenture as a whole and not to
any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation; and
(h) the following terms have the meanings given to them in the
Declaration:
(i) Business Day;
(ii) Clearing Agency;
(iii) Trust Preferred Security Certificate;
(iv) Delaware Trustee;
(v) Dissolution Tax Opinion;
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<PAGE>
(vi) Distribution;
(vii) DTC;
(viii) Institutional Trustee:
(ix) Investment Company Event;
(x) No Recognition Opinion;
(xi) Redemption Tax Opinion;
(xii) Regular Trustees;
(xiii) Special Event;
(xiv) Tax Event; and
(xv) Underwriting Agreement.
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning specified in Section 4.1.
"Declaration" means the Amended and Restated Declaration of Trust of Nuevo
Financing I, a Delaware statutory business trust, dated as of December [], 1996.
"Deferred Interest" has the meaning specified in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" has the meaning specified in Section
4.1.
"Global Debenture" has the meaning specified in Section 2.4.
"Maturity Date" means the date on which the Convertible Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Non Book-Entry Trust Preferred Securities" has the meaning set forth in
Section 2.4.
"Optional Redemption Price" has the meaning specified in Section 3.2.
"Trading Day" shall mean a day on which any securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.
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<PAGE>
"Trust Preferred Securities" has the meaning specified in the recitals to
this First Supplemental Indenture.
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF
THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Securities designated the "5.75%
Convertible Subordinated Debentures due December 15, 2026," limited in aggregate
principal amount to $103,092,780 (except for such additional principal amounts,
not to exceed $15,463,920, of Convertible Debentures issued to cover over-
allotments in the initial public offering of Convertible Debentures) which
amount shall be as set forth in any written order of the Company for the
authentication and delivery of Convertible Debentures pursuant to Section 303 of
the Indenture.
SECTION 2.2. MATURITY.
The Maturity Date is December 15, 2026.
SECTION 2.3. FORM AND PAYMENT.
Except as provided in Section 2.4, the Convertible Debentures shall be
issued in fully registered certificated form without coupons in denominations of
$50 in principal amount and integral multiples thereof. Principal and interest
on the Convertible Debentures issued in certificated form will be payable, the
transfer of such Convertible Debentures will be registrable and such Convertible
Debentures will be exchangeable for Convertible Debentures of other authorized
denominations of a like aggregate principal amount at the office or agency of
the Trustee; provided, however, that payment of interest may be made at the
-------- -------
option of the Company by check mailed to the Holder at such address as shall
appear in the Security Register or by wire transfer to an account appropriately
identified by the Holder. Notwithstanding the foregoing, so long as the Holder
of any Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Convertible Debentures held by the Institutional
Trustee will be made at such place and to such account as may be designated by
the Institutional Trustee.
SECTION 2.4. GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Convertible Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange for a
global Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Convertible Debentures (a "Global
Debenture"), to be registered in the name of DTC, or its nominee, and
delivered by the Trustee to DTC (or its custodian) for crediting to the
accounts of its participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation
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<PAGE>
shall execute a Global Debenture in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture and this First Supplemental Indenture.
Payments on the Convertible Debentures issued as a Global Debenture will be
made to DTC or its nominee; and
(ii) if any Trust Preferred Securities are held in non book-entry
certificated form, any Trust Preferred Security Certificate which
represents Trust Preferred Securities other than Trust Preferred Securities
held by the Clearing Agency or its nominee ("Non Book-Entry Trust Preferred
Securities") will be deemed to represent beneficial interests in
Convertible Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Trust Preferred
Securities until such Trust Preferred Security Certificates are presented
to the Security Registrar for transfer or reissuance at which time such
Trust Preferred Security Certificates will be cancelled and a Debenture,
registered in the name of the holder of the Trust Preferred Security
Certificate or the transferee of the holder of such Trust Preferred
Security Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Trust Preferred
Security Certificate cancelled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture. On issue of such
Convertible Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in part, only
to another nominee of DTC or to DTC by its nominee, or to a successor depositary
selected or approved by the Company or to a nominee of such successor
depositary.
SECTION 2.5. INTEREST.
(a) Each Convertible Debenture will bear interest at the rate of 5.75% per
annum (the "Coupon Rate") from December 23, 1996 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 15, June
15, September 15 and December 15 of each year (each, an "Interest Payment
Date"), commencing on March 15, 1997, to the Person in whose name such
Convertible Debenture or any predecessor Convertible Debenture is registered, at
the close of business on the Regular Record Date for such interest installment,
which, in respect of (i) Convertible Debentures of which the Institutional
Trustee is the Holder and the related Trust Preferred Securities are in book-
entry only form or (ii) a Global Debenture, shall be the close of business on
the Business Day next preceding that Interest Payment Date; provided, that if
the Interest Payment Date is a Redemption Date, then the record date for the
interest payment shall be as of the opening of business on such day for the
purpose of permitting the Holder of a Convertible Debenture to convert on such
record date while continuing to be the record holder for the interest payment
and therefore entitled to receive the interest payment on the Interest Payment
Date notwithstanding conversion on the record date. Notwithstanding the
foregoing sentence, if (i) the Convertible Debentures are held by the
Institutional Trustee and the Trust Preferred Securities are no longer in book-
entry only form or (ii) the Convertible Debentures are not represented by a
Global Debenture, the Company may
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<PAGE>
select a Regular Record Date for such interest installment which shall be any
date at least one Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed per 30-day month. In the event that
any date on which interest is payable on the Convertible Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, then such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Institutional Trustee is the Holder of any
Convertible Debentures, the Trust or the Institutional Trustee is required to
pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as additional interest
("Additional Interest") on the Convertible Debentures held by the Institutional
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Institutional Trustee after paying
such taxes, duties, assessments or other governmental charges will be equal to
the amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other governmental charges been imposed.
SECTION 2.6. ENFORCEMENT RIGHTS.
The holders of a majority in liquidation amount of the Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or exercising any trust or power conferred upon the Institutional Trustee under
the Declaration, including the right to direct the Institutional Trustee to
exercise the remedies available to it as a Holder of the Convertible Debentures.
If the Institutional Trustee fails to enforce its rights under the Convertible
Debentures, a holder of Trust Preferred Securities, to the extent permitted by
law, may institute a legal proceeding directly against the Company to enforce
the Institutional Trustee's rights under the Convertible Debentures without
first instituting any legal proceeding against the Institutional Trustee or any
other Person or entity. Notwithstanding the foregoing, if a Declaration Event
of Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Convertible
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then the registered holder of
the Trust Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Convertible Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Convertible
Debentures. In connection with such Direct Action, the Company shall remain
obligated to pay the principal or interest on such Convertible Debentures, and
the Company shall be subrogated to the rights of such holder of Trust Preferred
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Trust Preferred Securities in such Direct Action. The
holders of Trust Preferred
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<PAGE>
Securities will not be able to exercise any other remedy available to the
holders of the Convertible Debentures.
ARTICLE III.
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION.
If a Special Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion;
or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees shall
have been informed by tax counsel rendering the Dissolution Tax Opinion that a
No Recognition Opinion cannot be delivered to the Trust, then, notwithstanding
Section 3.2(a) but subject to Section 3.2(b), the Company shall have the right
upon not less than 30 days nor more than 60 days notice to the Holders of the
Convertible Debentures to redeem the Convertible Debentures, in whole or in
part, for cash within 90 days following the occurrence of such Tax Event (the
"90-Day Period") at a redemption price equal to 100% of the principal amount to
be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (the "Redemption Price"), provided that if at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90-Day Period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the Trust
or the Holders of the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption, and, provided, further,
that the Company shall have no right to redeem the Convertible Debentures while
the Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price prior to 10:00 a.m., New York time, on
the Redemption Date.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, except as otherwise may be specified in Section
3.1 or elsewhere in this First Supplemental Indenture, the Company shall have
the right to redeem the Convertible Debentures, in whole or in part, from time
to time, on or after December 15, 1999. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice
to the Holders of the Convertible Debentures, at the following prices (expressed
as percentages of the principal amount of the Convertible Debentures) (the
"Optional Redemption Price") together with accrued and unpaid interest,
including Compounded and Additional Interest to, but excluding, the Redemption
Date, if redeemed during the 12-month period beginning December 15:
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<PAGE>
<TABLE>
<CAPTION>
Year Redemption Price
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<S> <C>
1999.......................... 104.026%
2000.......................... 103.450%
2001.......................... 102.876%
2002.......................... 102.300%
2003.......................... 101.726%
2004.......................... 101.150%
2005.......................... 100.576%
</TABLE>
and 100% if redeemed on or after December 15, 2006.
If Convertible Debentures are redeemed on any March 15, June 15, September
15, or December 15, accrued and unpaid interest shall be payable to Holders of
record on the relevant record date.
So long as the corresponding Trust Preferred Securities are outstanding,
the proceeds from the redemption of the Convertible Debentures will be used to
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Convertible Debentures so redeemed.
If the Convertible Debentures are only partially redeemed pursuant to this
Section 3.2, the Convertible Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee. The Optional Redemption Price
shall be paid prior to 12:00 noon, New York time, on the Redemption Date or at
such earlier time as the Company determines; provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Redemption
Price by 10:00 a.m., New York time, on the date such Optional Redemption Price
is to be paid.
(b) If a partial redemption of the Convertible Debentures would result in
the delisting of the Trust Preferred Securities issued by the Trust from any
national securities exchange or other organization on which the Trust Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Convertible Debentures in whole.
SECTION 3.3. NO SINKING FUND.
The Convertible Debentures are not entitled to the benefit of any sinking
fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
So long as an Event of Default under Section 501(1) of the Indenture shall
not have occurred and be continuing, the Company shall have the right, at any
time and from time to time during the term of the Convertible Debentures, to
defer payments of interest by extending the interest payment period of such
Convertible Debentures for a period not exceeding 20 consecutive quarters (the
"Extended Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable; provided that no Extended Interest
Payment Period may extend beyond the Maturity Date or any earlier
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Redemption Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all accrued and unpaid interest on the
Convertible Debentures, including any Additional Interest and Compounded
Interest (together, "Deferred Interest") that shall be payable to the Holders
of the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register on the first record date after the end of
the Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters, or extend beyond the Maturity Date or
any earlier Redemption Date of the Convertible Debentures. Upon the termination
of any Extended Interest Payment Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Company may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the Regular Trustees,
the Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the
Trust are payable, or (ii) the date the Trust is required to give notice of the
record date, or the date such Distributions are payable, to the New York Stock
Exchange (or other applicable self-regulatory organization) or to holders of the
Trust Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Institutional Trustee is not the only Holder of the Convertible
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Convertible Debentures and the Trustee
written notice of its selection of such Extended Interest Payment Period at
least 10 Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock Exchange
or other applicable self-regulatory organization or to Holders of the
Convertible Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the maximum Extended Interest Payment Period permitted under Section 4.1.
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SECTION 4.3. LIMITATION OF TRANSACTIONS.
If the Company shall exercise its right to defer payment of interest as
provided in Section 4.1, then (i) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (A) purchases or acquisitions of shares of its common stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans, (B) as a result of a reclassification of its capital
stock or the exchange or conversion of one class or series of its capital stock
for another class or series of its capital stock or (C) the purchase of
fractional interests in shares of its capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (ii) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company which rank pari passu with or junior to the Convertible Debentures
and (iii) the Company shall not make any guarantee payment with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee).
ARTICLE V.
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Convertible
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Convertible Debentures and the sale of the Trust
Securities, including commissions to the underwriters payable pursuant to
the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 607 of the
Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the fees and expenses of the Institutional Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Trust Preferred
Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
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(e) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this First Supplemental Indenture or the Indenture or
the removal or resignation of the Trustee pursuant to Section 610 of the
Indenture, the Company shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.07 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, and their respective counsel, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE VI.
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE.
If the Convertible Debentures are to be distributed to the holders of the
Trust Preferred Securities issued by the Trust upon a Dissolution Event, the
Company will use its best efforts to list such Convertible Debentures on the New
York Stock Exchange, Inc. or on such other exchange as the Trust Preferred
Securities are then listed.
ARTICLE VII.
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article VII, the
Convertible Debentures are convertible, at the option of the Holder, at any time
through the close of business on December 15, 2026 (or, in the case of
Convertible Debentures called for redemption, prior to the close of business on
the Business Day prior to the corresponding redemption date) into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
rate of 0.8421 shares of Common Stock for each $50 in aggregate principal amount
of Convertible Debentures (equal to a conversion price (as adjusted from time to
time, the "Conversion Price") of $59.375 per share of Common Stock), subject to
adjustment as described in this Article VII. A Holder of Convertible Debentures
may convert any portion of the principal amount of the Convertible Debentures
into that number of fully paid and nonassessable shares of Common Stock obtained
by dividing the principal amount of the Convertible Debentures to be converted
by the Conversion Price in effect at the close of business on the Conversion
Date. All calculations under this Article VII shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
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SECTION 7.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable Notice
of Conversion setting forth the principal amount of Convertible Debentures to be
converted, together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion and, if such
Convertible Debentures are definitive Convertible Debentures, surrender to the
Conversion Agent the Convertible Debentures to be converted, duly endorsed or
assigned to the Company or in blank. In addition, a holder of Trust Preferred
Securities may exercise its right under the Declaration to convert such Trust
Preferred Securities into Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called for by the
preceding sentence and directing the Conversion Agent (i) to exchange such Trust
Preferred Security for a portion of the Convertible Debentures held by the Trust
(at an exchange rate of $50 principal amount of Convertible Debentures for each
Trust Preferred Security) and (ii) to immediately convert such Convertible
Debentures, on behalf of such holder, into Common Stock of the Company pursuant
to this Article VII and, if such Trust Preferred Securities are in definitive
form, surrendering such Trust Preferred Securities, duly endorsed or assigned to
the Company or in blank. So long as any Trust Preferred Securities are
outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder
of Trust Preferred Securities.
If a Trust Preferred Security is surrendered for conversion after the close
of business on any regular record date for payment of a Distribution and before
the opening of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the Person in whose name the Convertible
Debenture is registered at the close of business on such record date, and (other
than a Convertible Debenture or a portion of a Convertible Debenture called for
redemption on a redemption date occurring after such record date and on or prior
to such Distribution payment date) when so surrendered for conversion, the
Convertible Debenture must be accompanied by payment of an amount equal to the
Distribution payable on such Distribution payment date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Convertible
Debenture which is converted, interest whose Maturity Date is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Trust Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
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<PAGE>
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Convertible Debentures so converted and any unpaid interest
(including Compounded Interest) accrued on such Convertible Debentures at the
time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Convertible Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn will
make such payment, if any, to the Holder of the Convertible Debentures or the
holder of the Trust Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in part
only, a new Convertible Debenture or Convertible Debentures for the unconverted
portion thereof will be issued in the name of the Holder thereof upon the
cancellation thereof in accordance with Section 1402 of the Indenture.
(e) In effecting the conversion transactions described in this Section
7.2, the Conversion Agent is acting as agent of the holders of Trust Preferred
Securities (in the exchange of Trust Preferred Securities for Convertible
Debentures) and as agent of the Holders of Convertible Debentures (in the
conversion of Convertible Debentures into Common Stock), as the case may be.
The Conversion Agent is hereby authorized (i) to exchange Convertible Debentures
held by the Trust from time to time for Trust Preferred Securities in connection
with the conversion of such Trust Preferred Securities in accordance with this
Article VII and (ii) to convert all or a portion of the Convertible Debentures
into Common Stock and thereupon to deliver such shares of Common Stock in
accordance with the provisions of this Article VII and to deliver to the Trust a
new Convertible Debenture or Convertible Debentures for any resulting
unconverted principal amount.
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS.
(a) The Conversion Price shall be adjusted from time to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the Conversion
Price in effect at the opening of business on the day following the date
fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the
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<PAGE>
treasury of the Company (except to the extent such dividend or distribution
is being made with respect to such shares) but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following
the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller amount of shares of Common
Stock, then the Conversion Price in effect at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination
becomes effective.
(iii) In case the Company shall issue rights or warrants to all
holders of Common Stock entitling them (for a period expiring within 45
days after the record date fixed for a distribution of such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price (as hereinafter defined) per
share (determined as provided in subparagraph (vii) below) of Common Stock
on the date fixed for the determination of shareholders entitled to receive
such rights or warrants (other than pursuant to a dividend reinvestment
plan), then the Conversion Price in effect at the opening of business on
the day following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such Current Market Price and the denominator shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (iii), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company agrees not to
issue any rights or warrants in respect of shares of Common Stock held in
the treasury of the Company. To the extent that shares of Common Stock are
not delivered after the expiration or redemption by the Company of such
rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made in
respect of the issuance of such rights or warrants been made on the basis
of delivery of only the number of shares of Common Stock actually
delivered.
(iv) Subject to the second sentence of this subparagraph (iv), in
case the Company shall, by dividend or otherwise, distribute to all holders
of Common Stock (A) shares of capital stock of the Company (other than
Common Stock), (B) evidence of indebtedness of the Company and/or (C) other
assets (including securities, but excluding (1) any rights or warrants
referred to in subparagraph (iii)
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<PAGE>
above, (2) any rights or warrants to obtain capital stock of a company
other than the Company or any subsidiary of the Company (including any
rights offerings of the Company with respect to capital stock of companies
in which the Company has an investment (a "Rights Offering")), (3)
dividends or distributions in connection with the liquidation, dissolution
or winding-up of the Company, (4) dividends payable solely in cash that may
from time to time be fixed by the Board of Directors of the Company and (5)
dividends or distributions referred to in subparagraph (i) above), then in
each case (unless the Company makes the election referred to in the next
sentence) the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such record date by a
fraction the numerator of which shall be the Current Market Price per share
(determined as provided in subparagraph (vii) below) of the Common Stock on
such record date (the "Reference Date") less the then fair market value on
the Reference Date (as determined in good faith by the Board of Directors
of the Company, whose determination shall be conclusive and shall be
described in a statement filed with the Depositary and the Trustee) of the
portion of the shares of capital stock of the Company, evidences of
indebtedness or other assets so distributed (and for which an adjustment to
the Conversion Price has not been made previously pursuant to the terms of
this Article VII) applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening
of business on the day following the Reference Date. However, the Company
may elect, in its sole discretion, in lieu of the foregoing adjustment, to
make adequate provision so that each holder of Securities shall have the
right to receive upon conversion thereof the amount and kind of shares of
capital stock, evidences of indebtedness or other assets such holder would
have received had such holder converted such shares on such record date. If
the Board of Directors of the Company determines the fair market value of
any distribution for purposes of this subparagraph (iv) by reference to the
actual or when issued trading market for any securities (including shares
of capital stock or evidence of indebtedness of the Company) comprising a
distribution of securities, it must in doing so consider the price in such
market over the period used in computing the Current Market Price of the
Common Stock. For purposes of this subparagraph (iv), any dividend or
distribution that includes both (x) any of the items described in clauses
(A), (B) or (C) of the first sentence of this subparagraph (iv) and (y)
Common Stock or rights or warrants to subscribe for or purchase Common
Stock of the type referred to in subparagraph (iii) shall be deemed to be
(1) a dividend or distribution of shares of capital stock of the Company
(other than Common Stock), evidences of indebtedness of the Company or
other assets of the type referred to in clause (C) of the first sentence of
this subparagraph (iv) (making any Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such Common Stock or rights or warrants to purchase Common
Stock of the type referred to in subparagraph (iii) (making any further
Conversion Price reduction required by subparagraph (i) or (iii) of this
Section 7.3(a)), except (A) the Reference Date of such dividend or
distribution as defined in this subparagraph (iv) shall be substituted as
"the date fixed for the determination of shareholders entitled to receive
such rights or warrants" and "the date fixed for such determination" within
the meaning of subparagraphs (i) and (iii) of this Section 7.3(a) and (B)
any shares of Common Stock included in such dividend or distribution shall
not be deemed "outstanding at the close of business on the date fixed for
such
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<PAGE>
determination" within the meaning of subparagraph (i) of this Section
7.3(a). The occurrence of a distribution or the occurrence of any other
event as a result of which holders of Convertible Debentures converting
such notes into Common Stock hereunder will not be entitled to receive
rights issued pursuant to any shareholder protective rights agreement now
or hereafter in effect (the "Other Rights") in the same amount and manner
as if such holders had converted such shares immediately prior to the
occurrence of such distribution or other event shall be deemed a
distribution of Other Rights for the purposes of conversion adjustments
pursuant to this subparagraph (iv). In lieu of making any adjustment to the
Conversion Price under this subparagraph (iv) as a result of such a
distribution of Other Rights, the Company may elect, in its sole
discretion, to provide that Other Rights shall be issuable in the same
amount and manner upon conversion of the Convertible Debentures without
regard to whether the shares of Common Stock issuable upon conversion of
the Convertible Debentures were issued before or after such distribution or
other event.
(v) In case the Company shall, by dividend or otherwise, at any
time distribute cash to all holders of Common Stock, excluding (A) any cash
dividends on Common Stock to the extent that the aggregate cash dividends
per share of Common Stock in any consecutive 12-month period do not exceed
the greater of (x) the amount per share of Common Stock of the cash
dividends paid on the Common Stock in the immediately preceding 12-month
period, to the extent that such dividends for the immediately preceding 12-
month period did not require an adjustment to the Conversion Price pursuant
to this subparagraph (v) (as adjusted to reflect subdivisions or
combinations of the Common Stock) and (y) 15% of the average of the daily
Closing Prices (as hereinafter defined) of the Common Stock for the ten
consecutive Trading Days immediately prior to the date of declaration of
such dividend and (B) any dividend or distribution in connection with the
liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary, or any redemption of the Rights or Other Rights; provided,
however, that no adjustment shall be made pursuant to this subparagraph (v)
if such distribution would otherwise constitute a Fundamental Change (as
hereinafter defined) and be reflected in a resulting adjustment to the
Conversion Price as provided in this Article VII) then, in each case
(unless the Company makes the election referred to in the proviso following
this clause), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect at
the close of business on such record date by a fraction the numerator of
which shall be the Closing Price of a share of Common Stock on such record
date less the amount of cash so distributed (to the extent not excluded as
provided above) applicable to one share of Common Stock, and the
denominator shall be the Closing Price of a share of Common Stock, such
reduction to become effective immediately prior to the opening of business
on the day following such record date; provided, however, that the Company
may elect, in its sole discretion, in lieu of the foregoing adjustment, to
make adequate provision so that each holder of Securities shall thereafter
have the right to receive upon conversion the amount of cash such holder
would have received had such holder converted each Security on such record
date. If any adjustment is required to be made as set forth in this
subparagraph (v) as a result of a distribution which is a dividend
described in clause (A) of this subparagraph (v), such adjustment will be
based upon the amount by which such distribution exceeds the amount of the
dividend permitted to be excluded pursuant to such clause (A) of this
subparagraph (v). If an adjustment is
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required to be made pursuant to this subparagraph (v) as a result of a
distribution which is not such a dividend, such adjustment would be based
upon the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary
of the Company for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination
shall be conclusive and shall be described in a resolution of such Board)
of any other consideration included in such payment per share of Common
Stock at the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as amended) exceed by more
than 10%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Price provided in this subparagraph (vi), the
first reported sale price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, then the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction the numerator of which shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the first reported sale price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) on the Expiration Time and the first reported sale price
of the Common Stock on the Trading Day next succeeding the Expiration Time,
such reduction to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(vii) For the purpose of any computation under this Article VII, the
"Current Market Price per share" of Common Stock on any day shall be deemed
to be the average of the daily Closing Prices (as hereinafter defined) per
share of Common Stock for the ten consecutive Trading Days prior to and
including the date in question; provided, however, that (1) if the "ex"
date (as hereinafter defined) for any event (other than the issuance,
distribution or Fundamental Change requiring such computation) that
requires an adjustment to the Conversion Price pursuant to this Article VII
(the "Other Event") occurs during such ten consecutive Trading Days and
prior to the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation (the "Current Event"), the Closing Price for
each Trading Day prior to the "ex" date for such Other Event shall be
adjusted by multiplying such Closing Price by the same fraction by which
the Conversion Price is so required to be adjusted as a result of such
Other Event, (2) if the "ex" date for any Other Event occurs on or after
the "ex" date for the Current Event and on or prior to the date in
question, the Closing Price for each Trading Day on and after the "ex" date
for such Other Event shall be adjusted by multiplying such Closing Price by
the reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such Other Event
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(provided that in the event that such fraction is required to be determined
at a date subsequent to the date in question and with reference to events
taking place subsequent to the date in question, the Board of Directors of
the Company or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive and
described in a resolution of the Board of Directors of the Company or such
duly authorized committee thereof, as the case may be, shall in good faith
estimate such fraction based on assumptions it deems reasonable regarding
such events taking place subsequent to the date in question, and such
estimated fraction shall be used for purposes of such adjustment until such
time as the actual fraction by which the Conversion Price is so required to
be adjusted as a result of such Other Event is determined), and (3) if the
"ex" date for the Current Event is on or prior to the date in question,
after taking into account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash
and the fair market value (as determined in good faith by the Board of
Directors of the Company or, to the extent permitted by applicable law, a
duly authorized committee thereof in a manner consistent with any
determination of such value for purposes of this Article VII, whose
determination shall be conclusive and described in a resolution of the
Board of Directors of the Company or such duly authorized committee
thereof, as the case may be) of the shares of capital stock, evidences of
indebtedness or other assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex" date.
For purposes of this subparagraph (vii), the term "ex" date, (1) when used
with respect to any issuance, distribution or Fundamental Change, means the
first date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance, such distribution or
the cash, securities, property or other assets distributable in such
Fundamental Change to holders of the Common Stock, (2) when used with
respect to any subdivision or combination of shares of Common Stock, means
the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective and (3) when used with respect to any tender
or exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of
such offer.
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 7.3(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
-------- -------
adjustments which by reason of this subparagraph (viii) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest cent (with .005
being rounded upward) or to the nearest 1/100th of a share (with .005 of a
share being rounded upward), as the case may be. Notwithstanding anything
to the contrary in this Article VII, the Company from time to time may, to
the extent permitted by law, reduce the Conversion Price by any amount for
any period of at least 20 Business Days, in which case the Company shall
give at least 15 days' notice of such reduction to the holders of
Securities and the Trustee. In addition, the Company may, at its option,
make such reductions in the Conversion Price in addition to those set forth
in this Article VII, as it considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights or
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warrants to purchase or subscribe for stock or from any event treated as
such for income tax purposes or for any other reasons.
(ix) In any case in which this Article VII provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A) issuing
to the holder of any Convertible Debentures converted after such record
date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such
holder any amount in cash in lieu of any fractional shares pursuant to this
Article VII.
(x) For purposes of this Article VII, "Common Stock" includes any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which
is not subject to redemption by the Company. However, subject to the
provisions of this Article VII, shares issuable on conversion of
Convertible Debentures shall include only shares of the class designated as
the Company Common Stock on the date of the initial issuance of Convertible
Debentures by the Company or shares of any class or classes resulting from
any reclassification or reclassification thereof and which have no
preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and the
transfer agent for the Trust Preferred Securities and the Convertible
Debentures; and
(ii) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Trust Preferred Securities
and the Convertible Debentures at their last addresses as they appear upon
the stock transfer books of the Company and the Trust.
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SECTION 7.4. ADJUSTMENT OF CONVERSION PRICE - FUNDAMENTAL CHANGE.
(a) In the event that the Company shall be a party to any transaction or
series of transactions constituting a Fundamental Change, including, without
limitation, (i) any recapitalization or reclassification of shares of Common
Stock (other than a change in the par value or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other corporation or any merger of another
corporation into the Company as a result of which holders of Common Stock shall
be entitled to receive securities or other property or assets (including cash)
with respect to or in exchange for Common Stock (other than a merger which does
not result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange, pursuant to any of which the holders of Common Stock shall be entitled
to receive other securities, cash or other property, then appropriate provision
shall be made as part of the terms of such transaction or series of transactions
so that the holder of each Convertible Debenture then outstanding shall have the
right thereafter to convert such Convertible Debenture only into (A) if any such
transaction does not constitute a Common Stock Fundamental Change (as
hereinafter defined), the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such Convertible
Debenture might have been converted immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price required by the
provisions which follow in subparagraph (i) of Section 7.4(c), and (B) in the
case of a Common Stock Fundamental Change (as hereinafter defined), common stock
of the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change in an amount determined pursuant to the provisions which
follow in subparagraph (ii) of Section 7.4(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which provide for adjustments which, for events subsequent to
the effective date of such supplemental indenture, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article VII. The
above provisions shall similarly apply to successive recapitalizations,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article VII to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 7.4(c). In addition, in the
event of a Common Stock Fundamental Change, each Convertible Debenture shall be
convertible solely into common stock of the kind received by holders of Common
Stock as the result of such Common Stock Fundamental Change as more specifically
provided below in Section 7.4(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article VII in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities,
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property or other assets distributable in such Fundamental Change to holders of
the Common Stock):
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price per share of Common Stock shall be the lower of (A) the Conversion
Price in effect immediately prior to such Non-Stock Fundamental Change, but
after giving effect to any other adjustments effected pursuant to this
Article VII, and (B) the product of (1) the greater of the Applicable Price
(as hereinafter defined) or the then applicable Reference Market Price (as
hereinafter defined) and (2) a fraction the numerator of which shall be
$100 and the denominator of which shall be the amount set forth below
(based on the date on which such Non-Stock Fundamental Change occurs). For
the twelve month period beginning December 15:
Year Denominator
---- -----------
1996................. 105.750
1997................. 105.175
1998................. 104.600
1999................. 104.025
2000................. 103.450
2001................. 102.875
2002................. 102.300
2003................. 101.725
2004................. 101.150
2005................. 100.575
2006 and thereafter.. 100.00;
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this Article
VII, multiplied by a fraction, the numerator of which is the Purchaser
Stock Price (as hereinafter defined) and the denominator of which is the
Applicable Price; provided, however, that in the event of a Common Stock
-------- -------
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to any
fractional interests in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the Common Stock shall have been
exchanged for, converted into or acquired for common stock (and cash, if
any, with respect to fractional interests) of the successor, acquiror or
other third party, the Conversion Price per share of Common Stock
immediately following such Common Stock Fundamental Change shall be the
Conversion Price in effect immediately prior to such Common Stock
Fundamental Change divided by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one share
of Common Stock as a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this Article
VII:
(i) "Applicable Price" shall mean (A) in the event of a Non-Stock
Fundamental Change in which the holders of Common Stock receive only cash,
the
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amount of cash receivable by a holder of one share of Common Stock and (B)
in the event of any other Fundamental Change, the average of the Closing
Prices for one share of Common Stock during the ten Trading Days
immediately prior to the record date for the determination of the holders
of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of Common Stock shall
have the right to receive such cash, securities, property or other assets.
(ii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange or,
if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange or quotation system on which
such security is quoted or listed or admitted to trading or, if not quoted
or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the date in question as reported
by the National Quotation Bureau Incorporated, or a similarly generally
accepted reporting service or, if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors of the Company for that purpose or a price
determined in good faith by the Board of Directors of the Company.
(iii) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors of the Company) of the consideration received by the
holders of Common Stock pursuant to such transactions consists of shares of
common stock that, for the ten consecutive Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the Nasdaq National Market; provided, however, that a Fundamental
-------- -------
Change shall not be a Common Stock Fundamental Change unless either (A) the
Company continues to exist after the occurrence of such Fundamental Change
and the outstanding Convertible Debentures continue to exist as outstanding
Convertible Debentures, or (B) the outstanding Convertible Debentures
continue to exist as Convertible Debentures and are convertible into common
stock of the successor to the Company.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or constitutes solely the right to receive
cash, securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in the
-------- -------
case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Conversion Price, such Fundamental Change
shall be deemed to have occurred when substantially all of the Common Stock
has been exchanged for, converted into, or acquired for or constitutes
solely the right to receive cash, securities, property or other assets, but
the adjustment shall be based upon the consideration which the holders of
Common Stock received in such transaction or event as a result of which
more than 50% of the Common Stock shall
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have been exchanged for, converted into, or acquired for or shall
constitute solely the right to receive cash, securities, property or other
assets.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any Common
Stock Fundamental Change, the average of the Closing Prices for one share
of the common stock received by holders of Common Stock in such Common
Stock Fundamental Change during the ten Trading Days immediately prior to
the record date for the determination of the holders of Common Stock
entitled to receive such common stock or, if there is no such record date,
prior to the date upon which the holders of Common Stock shall have the
right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $31.67 (which is
an amount equal to 66-2/3% of the last reported sale price for the Common
Stock on the New York Stock Exchange on December 18, 1996) and, in the
event of any adjustment to the Conversion Price other than as a result of a
Fundamental Change, the Reference Market Price shall also be adjusted so
that the ratio of the Reference Market Price to the Conversion Price after
giving effect to any such adjustment shall always be the same as the ratio
of $31.67 to the initial Conversion Price set forth in this Article VII.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 7.5. NOTICE OF CERTAIN EVENTS.
In case:
(i) the Company shall declare a dividend (or any other
distribution) on Common Stock that would cause an adjustment to the
Conversion Price of the Convertible Debentures pursuant to the terms of any
of the subparagraphs above (including such an adjustment that would occur
but for the terms of the first sentence of Section 7.3(a)(viii) above); or
(ii) the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock or combined into a smaller
number of shares of Common Stock; or
(iii) the Company shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring within
45 days after the record date fixed for a distribution of such rights and
warrants) to subscribe for or purchase any shares of the Company's capital
stock or other capital stock of any class or of any other rights (including
any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or
of any consolidation, merger or share exchange to which the Company is a
party and for which approval
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of any shareholders of the Company is required, or of the sale or transfer
of all or substantially all of the assets of the Company or a compulsory
share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and shall cause to be mailed to the holders of record of the Trust Preferred
Securities, at their last addresses as they shall appear upon the stock transfer
books of the Trust or (ii) shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, at least 15 days prior
to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, rights or warrants are to be determined or (B)
the date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
SECTION 7.6. COMPANY TO PROVIDE STOCK.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Convertible Debentures from time to time as such Convertible Debentures
are presented for conversion, provided, that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in respect of
the conversion of Convertible Debentures by delivery of repurchased shares of
Common Stock which are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of conversion
of Convertible Debentures hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, provided, however, that nothing in
this Section 7.6 shall be deemed to affect in any way the obligations of the
Company to convert Convertible Debentures into Common Stock as provided in this
Article VII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
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The Company covenants that all shares of Common Stock which may be issued
upon conversion of Convertible Debentures will upon issue be fully paid and non-
assessable by the Company and free of pre-emptive rights.
SECTION 7.7. EMPLOYEE BENEFIT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Company or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of December 23, 1996, shall not be deemed to constitute an issuance of Common
Stock or exercisable, exchangeable or convertible securities by the Company to
which any of the adjustment provisions described above applies. There shall
also be no adjustment of the Conversion Price (i) in case of the issuance of any
stock (or securities convertible into or exchangeable for stock) of the Company
except as specifically described in this Article VII, (ii) as the result of the
issuance of Common Stock upon conversion of the Trust Preferred Securities or
the Convertible Debentures or (iii) as the result of the issuance of Rights.
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the Common Stock referred to in Section 7.3 (c) or 7.3(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 7.3(e)), the Holder of the Convertible Debentures, upon
the conversion thereof subsequent to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution and
prior to the effectiveness of the Conversion Price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Convertible Debentures are converted, the portion of the shares
of Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall be
evidenced by a resolution of the Board of Directors) with respect to all Holders
so converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Convertible Debentures described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, provided, that such due bill (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
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SECTION 7.9. PREFERRED STOCK PURCHASE RIGHTS.
(a) So long as Rights of a kind similar to those anticipated to be
declared in the first quarter of 1997 by the Board of Directors pursuant to the
Rights Agreement between the Company and the Person named therein as Rights
Agent (the "Rights Agreement"), as the same may hereafter be amended or reissued
("Rights"), are attached to the outstanding shares of Common Stock, each share
of Common Stock issued upon conversion of the Convertible Debentures prior to
the earliest of any Distribution Date (as defined in the Rights Agreement), the
date of redemption of the Rights or the date of expiration of the Rights shall
be issued with Rights in a number equal to the number of Rights then attached to
each such outstanding share of Common Stock.
(b) For the purposes of Section 7.3(a)(iii), upon the earlier to occur of
(i) the eleventh day following a Section 11(a)(ii) Event and (ii) an event
described in Section 13(a)(x), (y) or (z) of the Rights Agreement, then an
issuance of rights to purchase shares of Common Stock during a period not
exceeding 45 days from the date of such dividend or other distribution shall be
deemed to have occurred, unless the Rights were redeemed or expired prior to
such eleventh day or such Section 13(a) Event, as the case may be, unless the
Company has taken action pursuant to Section 11(a)(iii) or Section 13 of the
Rights Agreement to substitute other consideration for all or any portion of the
Series C Preferred Stock ("Series C Stock") otherwise issuable upon exercise of
a Right. For purposes of the reduction of the conversion price provided for in
Section 7.3(a)(iii) upon such deemed issuance of rights, each share of Series C
Stock shall be deemed to constitute 100 shares of Common Stock (subject to
adjustment as provided in the Rights Plan), and the date fixed for determination
of stockholders entitled to receive such rights shall be the close of business
on the tenth such day following such Section 11(a)(ii) Event or the date of such
Section 13(a) Event, as the case may be; provided, however, that the current
market price per share of the Common Stock shall be determined based on the 10
consecutive Trading Days prior to and including the Distribution Date.
(c) For the purposes of Section 7.3(a)(iv), if the Company has taken
action pursuant to Section 11(a)(iii) or Section 13 of the Rights Agreement to
substitute other consideration for all or any portion of the Series C Stock
otherwise issuable upon exercise of a Right, upon the earlier to occur of (x)
the eleventh day following a Stock Acquisition Date and (y) a Section 13(a)
Event, then an issuance of Securities shall be deemed to have occurred, unless
the Rights have been redeemed or have expired prior to such eleventh Business
Day or such Section 13(a) Event, as the case may be. For purposes of this
reduction of the conversion price provided for in Section 7.3(a)(iv) upon such
deemed issuance of Securities, the date fixed for determination of stockholders
entitled to receive such rights shall be the close of business on the tenth such
day following such Section 11(a)(ii) Event or the date of such Section 13(a)
Event, as the case may be; provided, however, that the current market price per
share of the Common Stock shall be determined based on the 10 consecutive
Trading Days prior to and including the Distribution Date.
(d) For purposes of Section 7.3(a)(iii) and Section 7.3(a)(iv), the
redemption by the Company of Rights shall be deemed to be an expiration of such
Rights.
(e) If any Convertible Debenture has been converted on or after the
Distribution Date and on or before the tenth day following such Section
11(a)(ii) Event or the date of such Section 13(a) Event, as the case may be,
then as soon as practicable following the date on which the adjustment required
by subsections (a)(iii) and (a)(iv) of Section 7.3 is
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made, the Company shall issue to the holder of the Convertible Debenture so
converted a number of additional shares of Common Stock (and cash in lieu of any
fraction share) that would have been issuable upon such conversion had such
adjustment been made immediately prior to such conversion.
ARTICLE VIII.
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.
The Convertible Debentures and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms:
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING - -
This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Convertible Debenture is exchangeable for
Convertible Debentures registered in the name of a Person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Convertible Debenture (other than a transfer
of this Convertible Debenture 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 to a successor Depositary or its nominee) may be
registered except in limited circumstances.
Unless this Convertible Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Company or its agent for registration of transfer, exchange or
payment, and any Convertible Debenture issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
No.________
NUEVO ENERGY COMPANY
5.75% CONVERTIBLE SUBORDINATED DEBENTURE DUE DECEMBER 15, 2026
Nuevo Energy Company, a Delaware corporation (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _____________________ or registered
assigns, the principal sum of Dollars ($____) on December 15, 2026, and to pay
interest on said principal sum from December 23, 1996, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly
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(subject to deferral as set forth herein) in arrears on March 15, June 15,
September 15, and December 15 of each year commencing March 15, 1997, at the
rate of 5.75% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum compounded quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months. Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on
this Convertible Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture (referred to on the reverse hereof) be
paid to the Person in whose name this Convertible Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered on the
Regular Record Date for such interest installment, which shall be the close of
business on the Business Day next preceding such Interest Payment Date unless
otherwise provided in the Indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holder on such Regular Record Date and may be paid to the Person in
whose name this Convertible Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the Convertible Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Convertible Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Convertible
Debenture shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall appear
in the Security Register or by wire transfer to an account appropriately
identified by the Holder. Notwithstanding the foregoing, so long as the Holder
of this Convertible Debenture is the Institutional Trustee, the payment of the
principal of (and premium, if any) and interest on this Convertible Debenture
will be made at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Convertible Debenture
is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance
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<PAGE>
of the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
under its corporate seal.
NUEVO ENERGY COMPANY
By:_________________________________________
Name:
Title:
[Seal]
Attest:
________________________
Name:
Title:
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<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series designated therein
referred to in the within-mentioned Indenture.
Dated:______________________ WILMINGTON TRUST COMPANY,
as Trustee
By:___________________________________
Authorized Signatory
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<PAGE>
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture, all issued or to be issued in one or more series under and
pursuant to a Subordinated Indenture dated as of November 25, 1996, duly
executed and delivered between the Company and Wilmington Trust Company, a
Delaware banking corporation, as Trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture dated as of December 23, 1996, between the Company
and the Trustee (the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Debentures. By the terms of the Indenture, the Debentures are issuable
thereunder in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Debentures is limited in aggregate principal amount as specified in said First
Supplemental Indenture and herein sometimes referred to as the "Convertible
Debentures."
Because of the occurrence and continuation of a Special Event, in certain
circumstances, this Convertible Debenture may become due and payable at the
principal amount (the "Redemption Price") together with any accrued and unpaid
interest thereon. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall have the right to redeem this Convertible
Debenture at the option of the Company, upon not less than 30 nor more than 60
days notice, without premium or penalty, in whole or in part at any time on or
after December 15, 1999 (an "Optional Redemption") at the following prices
(expressed as percentages of the principal amount of the Convertible Debentures)
(the "Optional Redemption Price") together with accrued and unpaid interest,
including Additional Interest and Compounded Interest to, but excluding, the
redemption date, if redeemed during the 12-month period beginning December 15:
Year Redemption Price
---- -----------------
1999............... 104.026%
2000............... 103.450%
2001............... 102.876%
2002............... 102.300%
2003............... 101.726%
2004............... 101.150%
2005............... 100.576%
and 100% if redeemed on
or after December 15, 2006.
If Convertible Debentures are redeemed on any March 15, June 15, September
15, or December 15, accrued and unpaid interest shall be payable to holders of
record on the relevant record date.
So long as the corresponding Trust Preferred Securities are outstanding,
the proceeds from the redemption of any of the Convertible Debentures will be
used to redeem Trust Preferred Securities.
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<PAGE>
If the Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
pro rata or by lot or by any other method utilized by the Trustee.
In the event of redemption of this Convertible Debenture in part only, a
new Convertible Debenture or Convertible Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures of such
series; provided, however, that no such supplemental indenture shall (a) change
the fixed maturity of any Debenture of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, or make any
change that adversely affects the right to convert any Debenture of any series
or make any change in the subordination provisions that adversely affects the
rights of any Holders of any Debenture of any series, without the consent of the
Holder of each Debenture so affected, or (b) reduce the aforesaid percentage of
Debentures of such series, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debenture of any series then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any Debentures of such
series or in respect of a covenant that cannot be amended without the consent of
the Holder of each Debenture affected. Any such consent or waiver by the
registered Holder of this Convertible Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Convertible Debenture and of any Convertible
Debenture issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this Convertible
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
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<PAGE>
As long as an Event of Default under Section 501(1) of the Indenture shall
not have occurred and be continuing, the Company shall have the right at any
time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Convertible
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
previous and further extensions thereof shall not exceed 20 consecutive
quarters. At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any additional amounts
then due, the Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Convertible
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered Holder hereof as the absolute owner hereof
(whether or not this Convertible Debenture shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Convertible Debenture has the right, exercisable at any
time through the close of business (New York time) on December 15, 2026 (or, in
the case of a Convertible Debenture called for redemption, prior to the close of
business on the Business Day prior to the corresponding redemption date), to
convert the principal amount
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<PAGE>
thereof (or any portion thereof that is an integral multiple of $50) into shares
of Common Stock at the initial conversion rate of 0.8421 shares of Common Stock
for each Convertible Debenture (equivalent to a Conversion Price of $59.375 per
share of Common Stock), subject to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. If a Convertible Debenture is
surrendered for conversion after the close of business on any regular record
date for payment of a Distribution and before the opening of business on the
corresponding Distribution payment date, then, notwithstanding such conversion,
the Distribution payable on such Distribution payment date will be paid in cash
to the Person in whose name the Convertible Debenture is registered at the close
of business on such record date, and (other than a Convertible Debenture or a
portion of a Convertible Debenture called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Convertible Debenture must be
accompanied by payment of an amount equal to the Distribution payable on such
Distribution payment date. The number of shares issuable upon conversion of a
Convertible Debenture is determined by dividing the principal amount of the
Convertible Debenture converted by the Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest. The outstanding principal
amount of any Convertible Debenture shall be reduced by the portion of the
principal amount thereof converted into shares of Common Stock.
[The Convertible Debentures of this series are issuable only in registered
form without Coupons in denominations of $50 and any integral multiple thereof.]
[This Global Debenture is exchangeable for Convertible Debentures in definitive
form only under certain limited circumstances set forth in the Indenture.
Convertible Debentures of this series so issued are issuable only in registered
form without Coupons in denominations of $50 and any integral multiple thereof.]
As provided in the Indenture and subject to certain limitations therein set
forth, Convertible Debentures of this series are exchange able for a like
aggregate principal amount of Convertible Debentures of this series of a
different authorized denomination, as requested by the Holder surrendering the
same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE
CONVERTIBLE DEBENTURES.
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<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Nuevo Energy Company:
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of NUEVO ENERGY COMPANY in accordance with the
terms of the Indenture referred to in this Convertible Debenture, and directs
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Date: _____________
[_] in whole Portion of Convertible Debenture to be
converted ($50 or integral multiple
thereof)
$_______________
------------------------------------
Signature (for conversion only)
Please print or typewrite name
and address, including zip code
and social security or other
identifying number:
--------------------------------
--------------------------------
------------------------------------
Signature Guarantee*
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership of
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Debenture to:
----------------------------------------
----------------------------------------
----------------------------------------
(Insert assignee's social security or tax identification number)
----------------------------------------
----------------------------------------
----------------------------------------
(Insert address and zip code of assignee)
----------------------------------------
----------------------------------------
----------------------------------------
and irrevocably appoints______________________________________________
__________________________________________ agent to transfer this Convertible
Debenture on the books of the Trust. The agent may substitute another to act for
him or her.
Date: ________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Convertible
Debenture)
Signature Guarantee*:___________________________
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership of
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
ARTICLE IX.
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.
Convertible Debentures in the aggregate principal amount of $103,092,780
($118,556,700 if the Underwriters' over-allotment option is exercised in full)
may, upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and make available for delivery said Convertible
Debentures to or upon the written order of the Company, signed by its Chairman,
any Vice Chairman, its President, or any Vice
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<PAGE>
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE
CONTROLS.
The Indenture, as supplemented by this First Supplemental Indenture, is in
all respects ratified and confirmed, and this First Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided. The provisions of this First Supplemental Indenture shall
supersede the provisions of the Indenture to the extent the Indenture is
inconsistent herewith.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 10.3. GOVERNING LAW.
This First Supplemental Indenture and each Convertible Debenture shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
SECTION 10.4. SEPARABILITY.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Convertible Debentures shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Convertible Debentures, but this First
Supplemental Indenture and the Convertible Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 10.5. COUNTERPARTS.
This First Supplemental 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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first above written.
NUEVO ENERGY COMPANY
By:_________________________________________
Robert M. King
Senior Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY
By:_________________________________________
Name:_____________________________________
Title:____________________________________
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<PAGE>
EXHIBIT 4.4
================================================================================
NUEVO FINANCING I
________________
PREFERRED SECURITIES GUARANTEE AGREEMENT
________________
Dated as of December 23, 1996
================================================================================
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1. DEFINITIONS AND INTERPRETATION................................................... 3
Section 1.01. Definitions and Interpretation............................................... 3
ARTICLE 2. TRUST INDENTURE ACT.............................................................. 6
Section 2.01. Trust Indenture Act; Application............................................. 6
Section 2.02. Lists of Holders of Securities............................................... 6
Section 2.03. Reports by the Preferred Guarantee Trustee................................... 6
Section 2.04. Periodic Reports to Preferred Guarantee Trustee.............................. 6
Section 2.05. Evidence of Compliance with Conditions Precedent............................. 7
Section 2.06. Events of Default; Waiver.................................................... 7
Section 2.07. Event of Default; Notice..................................................... 7
Section 2.08. Conflicting Interests........................................................ 7
ARTICLE 3. POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE...................................................................................... 8
Section 3.01. Powers and Duties of the Preferred Guarantee Trustee......................... 8
Section 3.02. Certain Rights of Preferred Guarantee Trustee................................ 9
Section 3.03. Not Responsible for Recitals or Issuance of Preferred Securities Guarantee... 11
ARTICLE 4. PREFERRED GUARANTEE TRUSTEE...................................................... 11
Section 4.01. Preferred Guarantee Trustee; Eligibility..................................... 11
Section 4.02. Appointment, Removal and Resignation of Preferred
Guarantee Trustee............................................................................ 12
ARTICLE 5. GUARANTEE........................................................................ 12
Section 5.01. Guarantee.................................................................... 12
Section 5.02. Waiver of Notice and Demand.................................................. 13
Section 5.03. Obligations Not Affected..................................................... 13
Section 5.04. Rights of Holders............................................................ 14
Section 5.05. Guarantee of Payment......................................................... 14
Section 5.06. Subrogation.................................................................. 14
Section 5.07. Independent Obligations...................................................... 14
ARTICLE 6. LIMITATION OF TRANSACTIONS; SUBORDINATION........................................ 15
Section 6.01. Limitation of Transactions................................................... 15
Section 6.02. Ranking...................................................................... 15
ARTICLE 7. TERMINATION...................................................................... 15
Section 7.01. Termination.................................................................. 15
ARTICLE 8. INDEMNIFICATION.................................................................. 16
Section 8.01. Exculpation.................................................................. 16
Section 8.02. Indemnification.............................................................. 16
ARTICLE 9 MISCELLANEOUS.................................................................... 16
Section 9.01. Successors and Assigns....................................................... 16
Section 9.02. Amendments................................................................... 17
Section 9.03. Notices...................................................................... 17
Section 9.04. Benefit...................................................................... 17
Section 9.05. Governing Law................................................................ 18
</TABLE>
2
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of December 23, 1996, is executed and delivered by Nuevo Energy Company, a
Delaware corporation (the "Guarantor"), and Wilmington Trust Company, as trustee
(the "Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the TECONS (as defined herein) of Nuevo Financing
I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 23, 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof preferred securities, having an aggregate
liquidation amount of $100,000,000 ($115,000,000 if the Underwriters' over-
allotment option is exercised in full) designated the $2.875 Term Convertible
Securities, Series A (the "TECONS").
WHEREAS, as incentive for the Holders to purchase the TECONS, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Preferred Securities Guarantee, to pay to the Holders of the TECONS the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of TECONS to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of TECONS,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Preferred Securities Guarantee for the
benefit of the Holders.
ARTICLE 1. DEFINITIONS AND INTERPRETATION
SECTION 1.01. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings as signed to them in
this Section 1.01;
(b) terms defined in the Declaration as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this Preferred
Securities Guarantee unless otherwise defined in this Preferred Securities
Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
3
<PAGE>
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person; provided, however, that the Authorized Officer signing an
Officers' Certificate given pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be the principal executive, financial or accounting officer of such
Person.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 1100
North Market Street, Wilmington, New Castle County, Delaware 19890-0001.
"Covered Person" means any Holder or beneficial owner of TECONS.
"Event of Default" means (i) the failure of the Guarantor to perform any of
its payment or other obligations under this Preferred Securities Guarantee or
(ii) the failure of the Guarantor to deliver Common Stock upon an appropriate
election by any Holder of TECONS to convert such TECONS into shares of Common
Stock.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the TECONS, to the extent not paid or made by the
Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration)
that are required to be paid on such TECONS to the extent the Issuer shall have
funds available therefor, (ii) the redemption price (the "Redemption Price"),
and all accrued and unpaid Distributions to the date of redemption to the extent
the Issuer has funds available therefor, with respect to any TECONS called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
conversion of all of the Trust Securities into the Guarantor's common stock or
the distribution of Debentures to the Holders in exchange for TECONS as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid Distributions on the TECONS to the date of payment,
to the extent the Issuer shall have funds available therefor, and (b) the amount
of assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution"). If
an event of default under the Indenture has occurred and is continuing, the
rights of holders of the Common Securities to receive payments under the Common
Securities Guarantee Agreement are subordinated to the rights of Holders of
TECONS to receive Guarantee Payments.
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"Holder" shall mean any holder, as registered on the books and records of
the Issuer of any TECONS; provided, however, that, in determining whether the
holders of the requisite percentage of TECONS have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of November 25, 1996,
between the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as
trustee, as supplemented by the First Supplemental Indenture dated as of
December 23, 1996, between the Debenture Issuer and Wilmington Trust Company, as
trustee.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the TECONS or, except as provided by the Trust
Indenture Act, a vote by Holder(s) of TECONS, voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all TECONS.
"Preferred Guarantee Trustee" means Wilmington Trust Company, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"Trust Securities" means the Common Securities and the TECONS.
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ARTICLE 2. TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the TECONS ("List of Holders") as of
such date, (i) within 1 Business Day after January 1 and June 30 of each year,
and (ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Preferred Guarantee Trustee provided, that
the Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the TECONS such reports as are required by
Section 313 of the Trust Indenture Act if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
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SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of TECONS may, by vote, on
behalf of the Holders of all of the TECONS, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Preferred Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.07. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the TECONS, notices of all Events of Default actually
known to a Responsible Officer of the Preferred Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided, that, the
Preferred Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Preferred Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the TECONS.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.08. CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE 3. POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the TECONS, and the
Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of TECONS exercising his or her rights
pursuant to Section 5.04(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment to
act as Successor Preferred Guarantee Trustee. The right, title and interest of
the Preferred Guarantee Trustee shall automatically vest in any Successor
Preferred Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the TECONS.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.06) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are
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specifically required to be furnished to the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Preferred Guarantee
Trustee, unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation amount
of the TECONS relating to the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee, or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require the
Preferred Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Preferred Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Preferred
Securities Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not reasonably assured to
it.
SECTION 3.02. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Preferred
Securities Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and
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complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee shall have
the right at any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Preferred
Guarantee Trustee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Preferred Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the TECONS, and the signature of the
Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Preferred Guarantee Trustee to so act or as
to its compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities Guarantee
the Preferred Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Preferred Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the TECONS, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions.
(xi) The Preferred Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
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(xii) The Preferred Securities Trustee shall not be liable for any action
taken, suffered, or omitted to be taken 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 Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
SECURITIES GUARANTEE.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE 4. PREFERRED GUARANTEE TRUSTEE
SECTION 4.01. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of the District of
Columbia, or a corporation or other Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by federal, state, territorial or
District of Columbia authority. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this Section
4.01(a)(ii), the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
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SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 60 days after
delivery of an instrument of resignation or removal, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.02,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE 5. GUARANTEE
SECTION 5.01. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person
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before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the TECONS to be performed or observed
by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the TECONS or the extension of time for
the performance of any other obligation under, arising out of, or in connection
with, the TECONS (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the TECONS, or any action on
the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the TECONS;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the TECONS have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Preferred Guarantee Trustee in respect of this Preferred
Securities
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Guarantee or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of TECONS may institute a legal proceeding
directly against the Guarantor to enforce the Preferred Guarantee Trustee's
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other person or entity. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.05. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.06. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
TECONS against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the TECONS, and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6. LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. LIMITATION OF TRANSACTIONS.
So long as any TECONS remain outstanding, if there shall have occurred an
Event of Default or an event of default under the Declaration, then (a) the
Guarantor shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) purchases or acquisitions
of shares of Common Stock in connection with the satisfaction by the Guarantor
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another class or
series of the Guarantor's capital stock, or (iii) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such
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capital stock of the Guarantor or the security being converted or exchanged) or
make any guarantee payments with respect to the foregoing, (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor which rank pari passu with or junior to the Debentures and (c) the
Guarantor shall not make any guarantee payments with respect to the foregoing
(other than pursuant to this guarantee).
SECTION 6.02. RANKING.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) pari passu with the most senior
Preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
Preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE 7. TERMINATION
SECTION 7.01. TERMINATION.
This Preferred Securities Guarantee shall terminate (i) upon full payment
of the Redemption Price of all TECONS, (ii) upon the distribution of the
Guarantor's common stock to all of the Holders in respect of the conversion of
the TECONS into the Guarantor's common stock or upon the distribution of the
Debentures to the Holders of all of the TECONS or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of TECONS must restore payment of any sums paid under the TECONS
or under this Preferred Securities Guarantee.
ARTICLE 8. INDEMNIFICATION
SECTION 8.01. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets,
15
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liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of TECONS might properly be
paid.
SECTION 8.02. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of this Preferred Securities Guarantee.
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(6) or Section
5.01(7) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE 9. MISCELLANEOUS
SECTION 9.01. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the TECONS then outstanding.
SECTION 9.02. AMENDMENTS.
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may be amended only with the prior approval
of the Holders of at least a Majority in liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all the outstanding TECONS. The provisions of Section 12.02
of the Declaration with respect to meetings of Holders of the Securities apply
to the giving of such approval.
SECTION 9.03. NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
TECONS):
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Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the TECONS):
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Attn: Chief Financial Officer
(c) If given to any Holder of TECONS, at the address set forth on the
books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the TECONS and, subject to Section 3.01(a), is not separately
transferable from the TECONS.
SECTION 9.05. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
17
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
NUEVO ENERGY COMPANY,
as Guarantor
By:___________________________________
Robert M. King
Senior Vice President and Chief
Financial Officer
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
18
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BUTLER & BINION, L. L. P.
SUITE 1600 WASHINGTON, D.C.
1000 LOUISIANA (202) 466-6900
ATTORNEYS AT LAW HOUSTON, TEXAS 77002-5093 --
--- DALLAS
(713) 237-3111 (214) 220-3100
TELECOPIER (713) 237-3202 --
SAN ANTONIO
(210) 227-2200
December 23, 1996
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Gentlemen:
We have acted as counsel for Nuevo Financing I, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), in connection
with the issuance and sale of an aggregate of 2,300,000 of its $2.875 Term
Convertible Securities, Series A (the "Trust Preferred Securities"), to be sold
by the Trust in a public offering. We have also acted as counsel for Nuevo
Energy Company, a Delaware corporation (the "Company"), in connection with its
corresponding (a) guarantee of the Trust Preferred Securities to the extent
described in the Preferred Securities Guarantee Agreement (the "Guarantee")
dated December 23, 1996, and (b) issuance and sale to the Trust, in
consideration and exchange for the proceeds of the issuance and sale of the
Trust Preferred Securities, of its 5.75% Convertible Subordinated Debentures due
December 15, 2026 (the "Convertible Debentures") under a Subordinated Indenture
(the "Base Indenture") dated as of November 25, 1996 between the Company and
Wilmington Trust Company, as trustee, as supplemented by the First Supplemental
Subordinated Indenture dated December 23, 1996 (the "Supplemental Indenture,"
and together with the Base Indenture, the "Indenture"). In addition, we have
acted as counsel for the Company in connection with the sale by United Investors
Management Company ("United") and The 1818 Fund, L.P. (the "1818 Fund" and,
together with United, the "Selling Stockholders") of 2,138,605 shares (the
"Shares") of common stock, $.01 par value per share ("Common Stock") of the
Company.
Upon delivery by a holder of TECONS of a TECONS to the property trustee of
the Trust, together with an irrevocable conversion notice, the property trustee,
as conversion agent, shall be obligated, on behalf of such holder, to exchange
such TECONS for an equivalent amount of the Convertible Debentures and
immediately convert such amount of the Convertible Debentures into shares
("TECONS Shares") of Common Stock.
All of the 1,275,000 Shares to be sold by United and 112 of the Shares to
be sold by the 1818 Fund were outstanding (the "Outstanding Shares") prior to
the public offering thereof. In addition, 863,493 of the Shares to be sold by
the 1818 Fund (the "Conversion Shares") are to be issued upon conversion of
11,220 shares of 7% Cumulative Convertible Preferred Stock, Series A ("Preferred
Stock"), of the Company.
<PAGE>
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Page 2
We have made such inquiries and examined such documents as we have
considered necessary or appropriate for the purposes of giving the opinions
hereinafter set forth, including the examination of executed or conformed
counterparts, or copies certified or otherwise proved to our satisfaction of the
following:
(i) the Certificate of Incorporation of the Company as filed with the
Secretary of State of Delaware on March 2, 1990, as amended;
(ii) the Bylaws of the Company as of the date of this opinion;
(iii) the Amended and Restated Declaration of Trust (the "Declaration"),
dated December 23, 1996, executed by the Company and by the trustees
of the Trust;
(iv) the Registration Statement on Form S-3 (Registration No. 333-16231)
of the Company, including the related prospectuses and prospectus
supplements filed with the Securities and Exchange Commission
("Registration Statement");
(v) the Indenture;
(vi) the Guarantee;
(vii) the Convertible Debentures; and
(viii) such other documents, corporate records, certificates and other
instruments as we have deemed necessary or appropriate for the
purpose of this opinion.
We have assumed the genuineness and authenticity of all signatures on all
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies and the due authorization, execution, delivery or recordation of all
documents where due authorization, execution, delivery or recordation are
prerequisites to the effectiveness thereof. Capitalized terms used herein and
not otherwise defined are used as defined in the Registration Statement.
Based upon the foregoing, and having regard for such legal considerations
as we deem relevant, we are of the opinion that:
(i) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware pursuant to
the Delaware General Corporation Law;
(ii) The Guarantee to be issued by the Company pursuant to the
Registration Statement has been duly authorized for issuance, and
when duly executed by the Company and delivered as contemplated in
the Registration Statement, will be a legally issued and binding
obligation of
<PAGE>
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Page 3
the Company enforceable in accordance with its terms (except as
limited by principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws now or
hereafter in effect affecting the rights of creditors generally);
(iii) The Convertible Debentures to be sold by the Company pursuant to the
Registration Statement have been duly authorized for issuance, and
when duly executed by the Company, authenticated by the Trustee and
delivered and sold as contemplated the Registration Statement, will
be legally issued and binding obligations of the Company enforceable
in accordance with their terms and entitled to the benefits of the
Indenture (except as limited by principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws
now or hereafter in effect affecting the rights of creditors
generally);
(iv) The TECONS Shares to be sold by the Company will, upon issuance and
delivery upon conversion of the Convertible Debentures as
contemplated in the Registration Statement, be duly and validly
authorized and legally issued, fully paid and nonassessable;
(v) The Outstanding Shares are duly and validly authorized and legally
issued, fully paid and nonassessable; and
(vi) The Conversion Shares will, upon issuance and delivery upon
conversion of the Preferred Stock, be duly and validly authorized
and legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to us under the caption "Legal
Matters" in the prospectuses and prospectus supplements forming a part of the
Registration Statement.
Very truly yours,
BUTLER & BINION, L.L.P.
