<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1998
REGISTRATION NO. 333-46909
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CROSS TIMBERS OIL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-2347769
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
810 HOUSTON STREET, SUITE 2000
FORT WORTH, TEXAS 76102
(817) 870-2800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
BOB R. SIMPSON
810 HOUSTON STREET, SUITE 2000
FORT WORTH, TEXAS 76102
(817) 870-2800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES OF ALL COMMUNICATIONS TO:
F. RICHARD BERNASEK, ESQ.
KELLY, HART & HALLMAN, P.C.
201 MAIN STREET, SUITE 2500
FORT WORTH, TEXAS 76102
(817) 332-2500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(2) REGISTRATION FEE(2)
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<S> <C> <C> <C> <C>
PRIMARY OFFERING:
Debt Securities(3)(4)...
Common Stock, par value
$0.01 per share(4)(5)..
Preferred Stock, par
value $0.01 per
share(4)(6)............
Warrants(4)(7)..........
Total................... $390,000,000 100% $390,000,000 $ 115,050
SECONDARY OFFERING:
Common Stock, par value
$0.01 per share........ $ 10,000,000 100% $ 10,000,000 $ 2,950
Total................... $400,000,000 100% $400,000,000 $ 118,000(8)
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</TABLE>
(1) The proposed maximum initial offering price per unit will be determined,
from time to time, by the Registrant.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. In no event will the aggregate initial offering
price of all securities issued from time to time in the pimary offering
pursuant to this Registration Statement exceed $390,000,000.
(3) Subject to footnote (2), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by the Registrant. If any such Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price of
up to $390,000,000.
(4) Subject to footnote (2), there are being registered hereunder an
indeterminate amount and number of Debt Securities, Preferred Stock and
Common Stock as may be issuable upon the conversion or redemption of Debt
Securities or Preferred Stock registered hereby or upon exercise of the
Warrants registered hereby.
(5) Subject to footnote (2), there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold from time to
time by the Registrant.
(6) Subject to footnote (2), there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by the Registrant.
(7) Subject to footnote (2), there are being registered hereunder an
indeterminate number of Warrants as may be sold from time to time by the
Registrant.
(8) $59,000 of the registration fee was previously paid on February 25, 1998.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
$400,000,000
CROSS TIMBERS OIL COMPANY
[LOGO OF CROSS TIMBERS
OIL COMPANY APPEARS HERE]
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
---------------
Cross Timbers Oil Company (the "Company") may offer from time to time
securities ("Securities"), which may consist of (i) Debt Securities ("Debt
Securities"), which may be either senior debt securities ("Senior
Securities"), senior subordinated debt securities ("Senior Subordinated
Securities") or subordinated debt securities ("Subordinated Securities"),
consisting of debentures, notes, bonds and/or other unsecured evidences of
indebtedness in one or more series, (ii) shares of Preferred Stock, $0.01 par
value per share ("Preferred Stock"), in one or more classes or series, (iii)
shares of Common Stock, $0.01 par value per share ("Common Stock"), in one or
more classes or series, or (iv) Warrants ("Warrants") to purchase Debt
Securities, Preferred Stock or Common Stock. The Securities will be offered by
the Company at an aggregate initial offering price not to exceed $390,000,000,
at prices and on terms to be determined at the time of sale.
The specific terms of any Securities offered by the Company pursuant to this
Prospectus will be set forth in an accompanying supplement to this Prospectus
(a "Prospectus Supplement"), together with the terms of the offering of such
Securities and the initial offering price and the net proceeds to the Company
from the sale thereof. The Prospectus Supplement will include with regard to
the particular Securities, where applicable, the following information: (i) in
the case of Debt Securities, the title, total principal amount, denominations,
maturity, rate, if any (which may be fixed or variable), or method of
calculation thereof, and time of payment of any interest, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments or analogous provisions, any conversion or exchange rights,
terms related to temporary or permanent global securities, any listing on a
securities exchange and the initial public offering price and any other terms
in connection with the offering and sale of such Debt Securities, (ii) in the
case of Preferred Stock, the designation, number of shares, and stated value
and liquidation preference per share, initial public offering price, dividend
rate (or method of calculation), dates on which dividends shall be payable and
dates from which dividends shall accrue, any redemption or sinking fund
provisions, any conversion or exchange rights, any listing on a securities
exchange, and any other terms in connection with the offering and sale of such
Preferred Stock; (iii) in the case of Common Stock, the number of shares,
designation and specific terms, if any, and the terms of the offering thereof;
and (iv) in the case of Warrants, the number and terms thereof, the
designation and the number of Securities and/or amount of cash consideration
issuable upon their exercise, the exercise price, any listing of the Warrants
or the underlying Securities on a securities exchange and any other terms in
connection with the offering, sale and exercise of the Warrants. The
Prospectus Supplement will also contain information, as applicable, about
certain United States federal income tax considerations relating to the
Securities in respect of which this Prospectus is being delivered.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Senior Subordinated Securities will
be subordinated to all existing and future Senior Indebtedness (as defined) of
the Company, and senior to all existing and future Subordinated Indebtedness
(as defined) of the Company. The Subordinated Securities will be subordinated
to all existing and future Senior Indebtedness and Senior Subordinated
Indebtedness of the Company.
The Company's Common Stock and Series A Convertible Preferred Stock are
listed on the New York Stock Exchange and trade under the symbols "XTO" and
"XTOpA," respectively.
In addition to the Securities that may be offered by the Company, up to
$10,000,000 of Common Stock may be offered from time to time by certain
Selling Stockholders of the Company, as set forth in an applicable Prospectus
Supplement. The Company will not receive any proceeds from the sale of Common
Stock offered by Selling Stockholders.
The Company may sell Securities to or through one or more underwriters, and
also may sell Securities directly to other purchasers or through agents. The
applicable Prospectus Supplement will set forth the names of any underwriters
or agents involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the number of shares or principal amounts, if
any, to be purchased by underwriters and the compensation, if any, of such
underwriters or agents. See "Plan of Distribution" herein.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN ANY SECURITIES, SEE "RISK FACTORS" BEGINNING ON PAGE 3
AND "ADDITIONAL RISK FACTORS" IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is , 1998.
<PAGE>
ADDITONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments, exhibits and supplements thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered hereby. This Prospectus, which forms a part
of the Registration Statement, does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Securities offered hereby,
reference is made to the Registration Statement. Any statements made in this
Prospectus concerning the provisions of certain documents are not necessarily
complete and, in each instance, reference is made to the copy of such
documents filed as an exhibit to the Registration Statement or otherwise filed
with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(b) Current Reports on Form 8-K dated February 16, 1998 (Amendment No. 1
to Report dated December 1, 1997), February 18, 1998 and February 25, 1998;
(c) The description of the Company's Common Stock contained in Form 8-A
of the Company dated April 8, 1993, as amended by Amendment No. 1 dated
June 15, 1995;
(d) The description of the Company's Series A Convertible Preferred Stock
contained in Form 8-A of the Company dated August 12, 1996, as amended by
Amendment No. 1 dated September 3, 1996, and Amendment No. 2 dated
September 18, 1996; and
(e) All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") subsequent to the date hereof and prior to termination of
the offering made hereby.
Any statement contained herein or in a document all or a portion of which is
incorporated by or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Statements contained in this Prospectus as to the contents of any contract
or other document referred to are not necessarily complete and in each
instance reference is made to such contract or other document, copies of which
are available from the Company as described below, each such statement being
qualified in all respects by such reference.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any documents
incorporated by reference herein, other than exhibits thereto unless
specifically incorporated by reference into such documents. Such request
should be directed to Cross Timbers Oil Company, 810 Houston Street, Suite
2000, Fort Worth, Texas 76102, Attention: Investor Relations (817) 870-2800.
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CERTAIN PERSONS PARTICIPATING IN AN OFFERING OF SECURITIES OFFERED HEREBY
MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE
PRICE OF THE SECURITIES, INCLUDING OVER-ALLOTMENT AND OTHER STABILIZING
TRANSACTIONS BY UNDERWRITERS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE THE
PROSPECTUS SUPPLEMENT RELATING TO THE SECURITIES.
2
<PAGE>
RISK FACTORS
Prospective purchasers of the Securities should carefully review the
information contained elsewhere in this Prospectus and any accompanying
Prospectus Supplement and should particularly consider the following matters:
REPLACEMENT OF RESERVES
The Company's future success depends upon its ability to find, develop or
acquire additional oil and gas reserves that are economically recoverable. The
proved reserves of the Company will generally decline as reserves are
depleted, except to the extent that the Company conducts successful
exploration or development activities or acquires properties containing proved
reserves, or both. In order to increase reserves and production, the Company
must continue its development drilling and recompletion programs, pursue its
exploration drilling program or undertake other replacement activities. The
Company's current strategy includes increasing its reserve base through
acquisitions of producing properties, by continuing to exploit its existing
properties and, to a lesser extent, by pursuing exploration opportunities.
There can be no assurance, however, that the Company's planned development and
exploration projects and acquisition activities will result in significant
additional reserves or that the Company will have continuing success drilling
productive wells at low finding costs.
PRICE FLUCTUATIONS AND MARKETS
The Company's results of operations are highly dependent upon the prices
received for the Company's oil and natural gas. Substantially all of the
Company's sales of oil and natural gas are made in the spot market, or
pursuant to contracts based on spot market prices, and not pursuant to long-
term, fixed-price contracts. Accordingly, the prices received by the Company
for its oil and natural gas production are dependent upon numerous factors
beyond the control of the Company. These factors include, but are not limited
to, the level of consumer product demand, weather conditions, governmental
regulations and taxes, the price and availability of alternative fuels, the
level of foreign imports of oil and natural gas, and the overall economic
environment. Any significant decline in prices for oil and natural gas could
have a material adverse effect on the Company's financial condition, results
of operations and quantities of reserves recoverable on an economic basis.
Should the industry experience significant price declines from current levels
or other adverse market conditions, the Company may not be able to generate
sufficient cash flow from operations to meet its obligations and make planned
capital expenditures. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources,"
"Business and Properties--Competition and Markets" and "--Federal and State
Regulations," incorporated herein by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "Annual Report
on Form 10-K").
The availability of a ready market for the Company's oil and natural gas
production also depends on a number of factors, including the demand for and
supply of oil and natural gas and the proximity of reserves to, and the
capacity of, oil and gas gathering systems, pipelines or trucking and terminal
facilities. Wells may be shut-in for lack of a market or due to inadequacy or
unavailability of pipeline or gathering system capacity.
SUBSTANTIAL INDEBTEDNESS
The Company has incurred a substantial amount of indebtedness and may incur
additional indebtedness under existing and future credit agreements or
pursuant to public or private offerings of debt securities. This level of
indebtedness may pose substantial risks to holders of Securities offered
pursuant to this Prospectus, including the possibility that the Company might
not generate sufficient cash flow to pay the principal of and interest on Debt
Securities offered hereby. If the Company is unsuccessful in increasing its
proved reserves or realizing production from its proved undeveloped reserves,
the future net revenue from existing proved reserves may not be sufficient to
pay the principal of and interest on debt securities issued by the Company and
would adversely affect the value of any preferred stock or common stock
outstanding. Such indebtedness may also adversely affect the Company's ability
to finance its future operations and capital needs, and may limit its ability
to pursue other business opportunities.
3
<PAGE>
SUBSTANTIAL CAPITAL REQUIREMENTS
The Company makes, and will continue to make, substantial capital
expenditures for the acquisition, development, production, exploration and
abandonment of its oil and natural gas reserves. The Company intends to
finance such capital expenditures primarily with funds provided by operations
and borrowings under its bank credit agreement.
If revenues decrease as a result of lower oil or gas prices or otherwise,
the Company may have limited ability to expend the capital necessary to
replace its reserves or to maintain production at current levels, resulting in
a decrease in production over time. If the Company's cash flow from operations
is not sufficient to satisfy its capital expenditure requirements, there can
be no assurance that additional debt or equity financing will be available to
meet these requirements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources," incorporated herein by reference from the Company's Annual Report
on Form 10-K.
COMPETITION
The oil and natural gas industry is highly competitive. The Company will
compete in the acquisition, development, production and marketing of oil and
natural gas with major oil companies, other independent oil and natural gas
concerns and individual producers and operators. Many of these competitors
have substantially greater financial and other resources than the Company.
Furthermore, the oil and natural gas industry competes with other industries
in supplying the energy and fuel needs of industrial, commercial and other
consumers. See "Business and Properties--Competition and Markets,"
incorporated herein by reference from the Company's Annual Report on Form 10-
K.
ACQUISITION RISKS
The Company constantly evaluates acquisition opportunities and frequently
engages in bidding and negotiation for acquisitions, many of which are
substantial. If successful in this process, the Company may be required to
alter or increase its capitalization substantially to finance these
acquisitions through the issuance of additional debt or equity securities, the
sale of production payments or otherwise; however, the Company's current bank
revolving credit agreement and the indentures governing outstanding
indebtedness contain covenants that limit the Company's ability to incur
additional indebtedness. See "--Substantial Indebtedness." These changes in
capitalization may significantly affect the risk profile of the Company.
Additionally, significant acquisitions can change the nature of the operations
and business of the Company depending upon the character of the acquired
properties, which may be substantially different in operating or geologic
characteristics or geographic location than existing properties. Moreover,
there can be no assurance that the Company will be successful in the
acquisition of any material property interests. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources," incorporated herein by reference from the Company's Annual
Report on Form 10-K.
DRILLING RISKS
Drilling activities are subject to many risks, including the risk that no
commercially productive reservoirs will be encountered. There can be no
assurance that new wells drilled by the Company will be productive or that the
Company will recover all or any portion of its investment. Drilling for oil
and natural gas may involve unprofitable efforts, not only from dry wells, but
from wells that are productive but do not produce sufficient net revenues to
return a profit after drilling, operating and other costs. The cost of
drilling, completing and operating wells is often uncertain. The Company's
drilling operations may be curtailed, delayed or canceled as a result of
numerous factors, many of which are beyond the Company's control, including
title problems, weather
4
<PAGE>
conditions, compliance with governmental requirements and shortages or delays
in the delivery of equipment and services.
OPERATING HAZARDS AND UNINSURED RISKS
The Company's operations are subject to hazards and risks inherent in
drilling for, producing and transporting oil and natural gas, such as fires,
natural disasters, explosions, encountering formations with abnormal
pressures, blowouts, collapse of wellbore, casing or other tubulars, pipeline
ruptures and spills, any of which can result in loss of hydrocarbons,
environmental pollution, personal injury claims and damage to properties of
the Company and others. As protection against operating hazards, the Company
maintains insurance coverage against some, but not all, potential losses. The
Company's coverages include, but are not limited to, operator's extra expense,
physical damage on certain assets, employer's liability, comprehensive general
liability, automobile and workers' compensation insurance. The Company
believes that its insurance is adequate and customary for companies of a
similar size engaged in operations similar to those of the Company, but losses
could occur for uninsurable or uninsured risks or in amounts in excess of
existing insurance coverage. The occurrence of an event that is not fully
covered by insurance could have an adverse impact on the Company's financial
condition and results of operations.
UNCERTAINTY OF ESTIMATES OF RESERVES AND FUTURE NET REVENUES
There are numerous uncertainties inherent in estimating quantities of proved
reserves, including many factors beyond the control of the Company. The
information relating to Company oil and natural gas reserves incorporated
herein by reference represents estimates based on reports prepared by the
Company's independent petroleum engineers, as well as internally generated
reports. Petroleum engineering is not an exact science. Information relating
to the Company's proved oil and natural gas reserves is based upon engineering
estimates. Estimates of economically recoverable oil and natural gas reserves
and of future net cash flows necessarily depend upon a number of variable
factors and assumptions, such as historical production from the area compared
with production from other producing areas, the assumed effects of regulation
by governmental agencies and assumptions concerning future oil and natural gas
prices, future operating costs, severance and excise taxes, capital
expenditures and workover and remedial costs, all of which may in fact vary
considerably from actual results. For these reasons, estimates of
classifications of such reserves based on risk of recovery and estimates of
expected future cash flows prepared by different engineers or by the same
engineers at different times may vary substantially. Actual production,
revenues and expenditures with respect to the Company's reserves will likely
vary from estimates, and such variances may be material.
DEPENDENCE UPON KEY PERSONNEL
The success of the Company has been and will continue to be highly dependent
on the Company's Chairman of the Board of Directors and Chief Executive
Officer, Bob R. Simpson, its Vice Chairman of the Board and President, Steffen
E. Palko, and a limited number of other senior management personnel. Loss of
the services of Mr. Simpson or Mr. Palko or any of those other individuals
could have a material adverse impact on the Company's operations. The Company
can make no assurance regarding the future affiliation of any of such persons
with the Company.
GOVERNMENTAL REGULATION
The Company's operations are affected by extensive regulation pursuant to
various federal, state and local laws and regulations relating to the
exploration for, and the development, production, gathering and marketing of,
oil and natural gas and the release of material into the environment or
otherwise relating to protection of the environment. In particular, the
Company's oil and natural gas exploration, development and production, and its
activities in connection with the storage and transportation of liquid
hydrocarbons, are subject to stringent environmental regulations by
governmental authorities. Such regulations have increased the costs of
planning, designing, drilling, installing, operating and abandoning oil and
natural gas wells and other related facilities, and such regulations may
become more onerous in the future.
5
<PAGE>
The Company may be required to expend significant resources, both financial
and managerial, to comply with environmental regulations and permitting
requirements. Although the Company believes that its operations are in general
compliance with all such laws and regulations, including applicable
environmental laws and regulations, risks of substantial costs and liabilities
are inherent in oil and natural gas operations, and there can be no assurance
that significant costs and liabilities will not be incurred in the future.
Moreover, it is possible that other developments, such as increasingly strict
environmental laws, regulations and enforcement policies thereunder, and
claims for damages to property, employees, other persons and the environment
resulting from the Company's operations, could result in substantial costs and
liabilities in the future.
The Company expects to maintain customary insurance coverage for its
operations, including coverage for sudden environmental damages, but does not
believe that insurance coverage for environmental damages that occur over time
will be available at a reasonable cost. Moreover, the Company does not believe
that insurance coverage against the full potential liability that could be
caused by sudden environmental damages is available at a reasonable cost.
Accordingly, the Company might be subject to uninsured liability because of
the prohibitive premium costs of insuring against certain hazards. See
"Business and Properties--Federal and State Regulations" and "--Environmental
Regulations," incorporated herein by reference from the Company's Annual
Report on Form 10-K.
FORWARD-LOOKING STATEMENTS
Certain statements incorporated by reference in this Prospectus from
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business and Properties," in addition to certain statements
contained herein and elsewhere in such incorporated documents are "forward-
looking statements" and are thus prospective. Such statements include, among
others, (a) statements regarding the Company's future acquisition and
development plans and objectives and related expenditures, revenues and cash
flows, including without limitation statements regarding (1) production and
cash flows, (2) number and location of planned wells, (3) anticipated
completion of the Company's plan regarding expenditures for property
acquisitions and repurchases of the Company's Common Stock, and the
anticipated source of the funds necessary to complete the plan and (4) the
Company's capital expenditure budgets for acquisition and development,
respectively, and (b) statements regarding the Company's anticipated aggregate
annual dividends to be paid on its Common Stock. Statements of assumptions
related to or underlying such forward-looking statements include, without
limitation, statements regarding (i) the quality of the Company's properties
with regard to, among other things, anticipated reserve and production
enhancement opportunities and quantity of proved reserves, (ii) the Company's
ability to prudently add growth potential through exploration, (iii)
anticipated future domestic hydrocarbon demand, (iv) the adequacy of the
Company's sources of liquidity during the current and future years, (v) the
expected insignificant impact on the Company's future expenditures for
regulatory compliance, (vi) the expected insignificant impact of production
imbalances on the Company's liquidity during the current and future years,
(vii) the expected immaterial adverse impact of a loss of any current oil or
gas purchaser from the Company, (viii) regulatory approval and the enactment
of new legislation in Oklahoma to realize infill drilling potential and (ix)
similarity of the impact on the Company to the impact on other oil and natural
gas producers of rules promulgated by the Federal Energy Regulatory
Commission. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. The most significant of such risks, uncertainties and other
factors are discussed under "Risk Factors" in this Prospectus and any
accompanying Prospectus Supplement, and under "Management's Discussion and
Analysis of Financial Condition and Results of Operations," incorporated by
reference herein from the Company's Annual Report on Form 10-K, and
prospective investors are urged to carefully consider such factors.
6
<PAGE>
THE COMPANY
Cross Timbers Oil Company is a leading United States independent energy
company engaged in the acquisition, development, exploitation and exploration
of oil and natural gas properties, and in the production, processing,
marketing and transportation of oil and natural gas. The Company has
consistently increased proved reserves, production and cash flow since its
inception in 1986. The Company has grown primarily through acquisitions of
reserves, followed by aggressive development and exploitation activities and
strategic acquisitions of additional interests in or near such reserves. The
Company's oil and gas reserves are principally located in relatively long-
lived fields with well-established production histories concentrated in
western Oklahoma, the Permian Basin of West Texas and New Mexico, the Hugoton
Field of Oklahoma and Kansas, the Green River Basin of Wyoming, and the San
Juan Basin of northwestern New Mexico.
The Company is a Delaware corporation. Its principal executive offices are
located at 810 Houston Street, Suite 2000, Fort Worth, Texas 76102 and its
telephone number is (817) 870-2800.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
net proceeds from the sale of Securities will be used for general corporate
purposes, which may include refinancings or repayments of indebtedness,
property acquisitions, capital expenditures, working capital, acquisitions and
repurchases and redemptions of securities.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the years and periods
indicated are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1994 1995 1996 1997
----- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed
charges(a)...................................... -- (b) 1.5x -- (c) 2.6x 2.2x
</TABLE>
- --------
(a) For purposes of calculating this ratio, earnings include income (loss)
from continuing operations before income tax and fixed charges. Fixed
charges include interest expense, preferred stock dividends and an imputed
interest expense on operating lease rentals (assumed as one-third of
rentals).
(b) Earnings were insufficient to cover fixed charges by $0.4 million due to
the effect of a one-time, non-cash accounting charge of $4 million for net
deferred income tax liabilities upon the merger of the Company with the
predecessor partnership. Excluding the effect of this charge, the ratio of
earnings to fixed charges would have been 1.6x.
(c) Earnings were insufficient to cover fixed charges by $16.4 million due to
the effect of a $20.3 million pre-tax, non-cash impairment charge recorded
upon adoption of Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of. Excluding the effect of this charge, the ratio
of earnings to fixed charges would have been 1.3x.
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DESCRIPTION OF DEBT SECURITIES
The following is a description of certain general terms and provisions of
the Debt Securities. The particular terms of any series of Debt Securities
will be described in the applicable Prospectus Supplement. If so indicated in
a Prospectus Supplement, the terms of any such series may differ from the
terms set forth below.
Debt Securities may be issued from time to time in one or more series by the
Company. The Debt Securities will constitute either indebtedness designated as
Senior Indebtedness ("Senior Securities"), indebtedness designated as Senior
Subordinated Indebtedness ("Senior Subordinated Securities") or indebtedness
designated as Subordinated Indebtedness ("Subordinated Securities"). The
Company may issue Debt Securities with different terms from those of Debt
Securities previously issued without the consent of holders of previously
issued series of Debt Securities. The particular terms of each series of
Securities offered by a particular Prospectus Supplement will be described
therein. Senior Securities, Senior Subordinated Securities and Subordinated
Securities will each be issued under a separate indenture (individually, an
"Indenture" and, collectively, the "Indentures") to be entered into prior to
the issuance of such Debt Securities. The Indentures will be substantially
identical, except for provisions relating to subordination. See "--
Subordination of Senior Subordinated Securities and Subordinated Securities."
A copy of the form of the Indenture is filed as an Exhibit to the Registration
Statement of which this Prospectus is a part. There will be a separate Trustee
(individually, a "Trustee" and, collectively, the "Trustees") under each
Indenture. Information regarding the Trustee under an Indenture will be
included in any Prospectus Supplement relating to the Debt Securities issued
thereunder.
The following discussion includes a summary description of material terms of
the Indentures, other than terms that are specific to a particular series of
Debt Securities and that will be described in the Prospectus Supplement
relating to such series. The following summaries do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
of the provisions of the Indentures, including the definitions therein of
certain terms capitalized in this Prospectus. Wherever particular Sections or
Articles or defined terms of the Indentures are referred to herein or in a
Prospectus Supplement, such Sections or defined terms are incorporated herein
or therein by reference.
To the extent applicable to the Debt Securities of a particular series, as
indicated in the applicable Prospectus Supplement, there are no provisions of
the Indentures that afford holders of the Debt Securities protection in the
event of a highly leveraged transaction involving the Company.
GENERAL
Debt Securities will be general unsecured obligations of the Company. The
Indentures do not limit the aggregate amount of Debt Securities that may be
issued under each Indenture, and Debt Securities may be issued under the
Indentures from time to time in separate series up to the aggregate amount
authorized from time to time by the Company for each series. Debt Securities
of a series will be issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof, or in the form of one
or more Global Securities in registered form (each a "Global Security"). The
Senior Securities will be unsecured and unsubordinated obligations of the
Company and will rank equally and ratably with other unsecured and
unsubordinated indebtedness of the Company. The Senior Subordinated Securities
and the Subordinated Securities will be subordinated in right of payment to
the prior payment in full of the Senior Indebtedness, including the Senior
Securities, of the Company, and the Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Subordinated Indebtedness, including the Senior Subordinated Securities, as
described below under "Subordination of Senior Subordinated Securities and
Subordinated Securities" and in a Prospectus Supplement applicable to an
offering of Senior Subordinated Securities or Subordinated Securities.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the title of such Debt Securities; (2) any
limit on the aggregate principal amount of such Debt Securities; (3) whether
any of such Debt
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Securities are to be issuable as a Global Security, whether such Global
Securities are to be issued in temporary global form or permanent global form,
and, if so, the terms and conditions, if any, upon which interests in such
Securities in global form may be exchanged, in whole or in part, for the
individual Debt Securities represented thereby; (4) the date or dates on which
such Debt Securities will mature; (5) the rate or rates of interest, if any,
or the method of calculation thereof, that such Debt Securities will bear; (6)
the date or dates from which any such interest will accrue, the interest
payment dates on which any such interest on such Debt Securities will be
payable and the record date for any interest payable on any interest payment
date; (7) the place or places where the principal of, premium (if any) and
interest on such Debt Securities will be payable; (8) the period or periods
within which, the events upon the occurrence of which, and the price or prices
at which, such Debt Securities may, pursuant to any optional or mandatory
provisions, be redeemed or purchased, in whole or in part, by the Company and
any terms and conditions relevant thereto; (9) the obligation of the Company,
if any, to redeem or repurchase such Debt Securities at the option of the
holders; (10) any index or formula used to determine the amount of payments of
principal of and any premium and interest on such Debt Securities; (11) if
other than the principal amount thereof, the portion of the principal amount
of such Debt Securities of the series that will be payable upon declaration of
the acceleration of the maturity thereof; (12) any additional covenants of the
Company; (13) the terms and conditions, if any, pursuant to which such Debt
Securities are convertible or exchangeable into Common Stock; and (14) any
other terms of such Debt Securities not inconsistent with the provisions of
the applicable Indentures.
Debt Securities may be issued at a discount from their principal amount.
United States federal income tax considerations and other special
considerations applicable to any such original issue discount securities will
be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms
and other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
SENIOR SECURITIES
The Senior Securities will rank pari passu with all other unsecured and
unsubordinated debt of the Company, including Senior Indebtedness, and senior
to the Senior Subordinated Indebtedness and Subordinated Indebtedness.
SUBORDINATION OF SENIOR SUBORDINATED SECURITIES AND SUBORDINATED SECURITIES
The payment of the principal of, premium, if any, and interest on the Senior
Subordinated Securities and the Subordinated Securities will, to the extent
set forth in the respective Indentures governing such Senior Subordinated
Securities and Subordinated Securities, be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness (including the Senior
Securities), and payments in respect of the Subordinated Securities will be
subordinated to the prior payment in full of all Senior Subordinated
Indebtedness. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets or any bankruptcy, insolvency or
similar proceedings of the Company, (1) the holders of all Senior Indebtedness
will be entitled to receive payment in full of all amounts due or to become
due thereon before the holders of the Senior Subordinated Securities or the
Subordinated Securities will be entitled to receive any payment of the
principal of, premium, if any, or interest on such Senior Subordinated
Securities or Subordinated Securities, as the case may be, and (2) the holders
of Senior Subordinated Securities will be entitled to receive payment in full
in respect thereof before holders of Subordinated Securities are entitled to
receive any payments in respect of such Subordinated Securities. In the event
of the acceleration of the maturity of any Senior Subordinated Securities or
Subordinated Securities, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become
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due thereon before the holders of the Senior Subordinated Securities or
Subordinated Securities, as the case may be, will be entitled to receive any
payment upon the principal of, premium, if any, or interest on such Senior
Subordinated Securities or Subordinated Securities, as the case may be. Upon
acceleration of the maturity of any Subordinated Securities, the holders of
any Senior Subordinated Indebtedness will be entitled to receive payment in
full of the Senior Subordinated Indebtedness before the holders of
Subordinated Securities are entitled to receive any payments in respect
thereof.
No payments of principal of, premium, if any, or interest on the Senior
Subordinated Securities or Subordinated Securities may be made if there shall
have occurred and be continuing a default in the payment of principal of,
premium, if any, or interest on any Senior Indebtedness (and, in the case of
the Subordinated Securities, on any Senior Subordinated Indebtedness) beyond
any applicable grace period. During the continuance of any default, other than
a default in the payment of principal of, premium, if any, or interest, on
Senior Indebtedness (and in the case of Subordinated Securities, on Senior
Subordinated Indebtedness) pursuant to which the maturity thereof may be
accelerated, upon receipt by the Trustee for Senior Subordinated Securities or
Subordinated Securities of notice from holders of Senior Indebtedness (and/or
Senior Subordinated Indebtedness) the Company will be restricted, as set forth
in the applicable Indenture from making any payments to holders of Senior
Subordinated Securities and/or Subordinated Securities.
The failure of the Company to make any payment on the Senior Subordinated
Securities or the Subordinated Securities when due or within any applicable
grace period, including as a result of a nonpayment default on any Senior
Indebtedness (or in the case of Subordinated Securities, on any Senior
Subordinated Indebtedness), will constitute an Event of Default under the
applicable Indenture and will entitle holders of the Senior Subordinated
Securities and/or Subordinated Securities, as applicable, to accelerate the
maturity thereof.
The Indenture pertaining to the Senior Subordinated Securities will provide
that the Company will not incur any Indebtedness which is expressly
subordinated in right of payment to Senior Indebtedness unless such
Indebtedness ranks pari passu with or subordinate to the Senior Subordinated
Securities.
The Company conducts some of its operations through subsidiaries. The Debt
Securities are obligations only of the Company and not of the subsidiaries. As
an equity holder of its subsidiaries, the right of the Company to receive
assets from a subsidiary upon the bankruptcy, liquidation or reorganization of
such subsidiary (and therefore the right of the holders of Debt Securities to
realize value from such assets) will be effectively subordinated to the claims
of all creditors of that subsidiary, except to the extent that the Company is
recognized as a creditor of the subsidiary.
By reason of such provisions, in the event of insolvency of the Company,
holders of Senior Subordinated Securities and Subordinated Securities may
recover less, ratably, than holders of Senior Indebtedness with respect
thereto, and holders of Subordinated Securities may recover less, ratably,
than holders of Senior Subordinated Securities with respect thereto.
If this Prospectus is being delivered in connection with a series of Senior
Subordinated Securities or Subordinated Securities, the accompanying
Prospectus Supplement or the information incorporated herein by reference will
set forth the approximate amount of Senior Indebtedness outstanding as of the
end of the Company's most recently completed fiscal quarter.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company will be obligated to
make an offer to purchase all of the then outstanding Debt Securities (a
"Change of Control Offer"), and purchase, on a business day (the "Change of
Control Purchase Date") not more than 70 nor fewer than 30 days following the
Change of Control, all of the then outstanding Debt Securities validly
tendered pursuant to such Change of Control Offer at a purchase price (the
"Change of Control Purchase Price") equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the Change of Control
Purchase Date. The Change of Control Offer is
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required to remain open for at least 20 Business Days and until the close of
business on the fifth business day prior to the Change of Control Purchase
Date.
In order to effect such Change of Control Offer, the Company, not later than
the 30th day after the Change of Control, will mail to each holder of Debt
Securities a notice of the Change of Control Offer, which notice will govern
the terms of the Change of Control Offer and state, among other things, the
procedures that holders of Debt Securities must follow to accept the Change of
Control Offer.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the Change of Control
Purchase Price for all of the Debt Securities delivered by holders thereof
seeking to accept the Change of Control Offer. If on a Change of Control
Purchase Date the Company does not have available funds sufficient to pay the
Change of Control Purchase Price or is prohibited from purchasing the Debt
Securities, an Event of Default will occur under the applicable Indenture. The
definition of "Change of Control" includes an event by which the Company
sells, conveys, transfers or leases all or substantially all of its properties
to any Person; the phrase "all or substantially all" is subject to applicable
legal precedent and as a result in the future there may be uncertainty as to
whether a Change of Control has occurred.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer at the
same purchase price, at the same times and otherwise in substantial compliance
with the requirements applicable to a Change of Control Offer made by the
Company and purchases all Debt Securities validly tendered and not withdrawn
under such Change of Control Offer.
The Company intends to comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder, if applicable, in the event
that a Change of Control occurs and the Company is required to purchase Debt
Securities as described above. The existence of a holder's right to require,
subject to certain conditions, the Company to repurchase its Debt Securities
upon a Change of Control may deter a third party from acquiring the Company in
a transaction that constitutes, or results in, a Change of Control.
REPORTS
The Company will file on a timely basis with the Commission, to the extent
such filings are accepted by the Commission and whether or not the Company has
a class of securities registered under the Exchange Act, the annual reports,
quarterly reports and other documents that the Company would be required to
file if it were subject to Section 13 or 15(d) of the Exchange Act. The
Company will also be required to file copies of such reports and documents
with the Trustee under each Indenture with outstanding Debt Securities within
15 days after the date on which the Company files, or would be required to
file, such reports and documents with the Commission.
MERGER, CONSOLIDATION AND SALE OF ASSETS, ETC.
The Company will not, in any single transaction or series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets to any Person or group of affiliated Persons,
and the Company will not permit any of its subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all
of the properties and assets of the Company and its subsidiaries on a
consolidated basis to any other Person or group of affiliated Persons, unless
at the time and after giving effect thereto (1) either (A) if the transaction
or transactions is a merger or consolidation, the Company will be the
surviving Person of such merger or consolidation, or (B) the Person (if other
than the Company) formed by such consolidation or into which the Company or
such subsidiary is merged or to which the properties and assets of the Company
or such subsidiary, as the case may be, are sold, assigned, conveyed,
transferred, leased or otherwise disposed of is a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and, in either case, expressly assumes by a
supplemental indenture to the Indentures, all the obligations
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of the Company under the Debt Securities and the Indentures, and, in each
case, the Indentures remain in full force and effect; (2) immediately before
and immediately after giving effect to such transaction or series of
transactions on a pro forma basis, no Event of Default shall have occurred and
be continuing; and (3) if any of the properties or assets of the Company or
any of its subsidiaries would upon such transaction or series of related
transactions become subject to any lien, the creation and imposition of such
lien will be in compliance with the terms of the Indentures.
EVENTS OF DEFAULT
The following will constitute Events of Default under the Indentures with
respect to Debt Securities of any series: (1) failure to pay principal (or
premium, if any) on any Debt Security of that series when due (whether at
maturity, upon redemption, upon repurchase pursuant to a Change of Control
Offer, by acceleration or otherwise); (2) failure to pay any interest on any
Debt Security of that series when due, which failure continues for 30 days;
(3) default in the performance of the provisions contained in the "Merger,
Consolidation and Sale of Assets" section of the applicable Indenture; (4)
failure to perform any other covenant of the Company in the applicable
Indenture or any other covenant to which the Company may be subject with
respect to Debt Securities of that series (other than a covenant solely for
the benefit of a series of Debt Securities other than that series), which
failure continues for 30 days after written notice as provided in the
applicable Indenture; (5) certain events of bankruptcy, insolvency or
reorganization; and (6) such other events as are set forth in the applicable
Indenture supplement relating to such Debt Securities.
If an Event of Default with respect to outstanding Debt Securities of any
series occurs and is continuing, either the Trustee or the holders of at least
25% in principal amount of the outstanding Debt Securities of that series, by
notice as provided in the applicable Indenture, may declare the principal
amount (or, if the Debt Securities of that series are original issue discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities of that series to be due and
payable immediately, except that upon the occurrence of an Event of Default
specified in (5) in the preceding paragraph, the principal amount (or in the
case of original issue discount Securities, such portion) of all Debt
Securities will be immediately due and payable without any action by the
Trustee or any holder. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before judgment or
decree based on such acceleration has been obtained, the holders of a majority
in principal amount of the outstanding Debt Securities of that series may,
under certain circumstances, rescind and annul such acceleration. For
information as to waiver of defaults, see "Amendments and Waivers" below.
Subject to the duty of the respective Trustees during an Event of Default to
act with the required standard of care, each such Trustee will be under no
obligation to exercise any of its rights or powers under the respective
Indentures at the request or direction of any of the holders, unless such
holders shall have offered to such Trustee reasonable security or indemnity.
Subject to certain provisions, including those requiring security or
indemnification of the applicable Trustee, the holders of a majority in
principal amount of the outstanding Debt Securities of any series will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on such Trustee, with respect to the Debt Securities of that series.
No holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default and unless the holders
of at least 25% in aggregate principal amount of the outstanding Debt
Securities of the same series shall have provided written requests, and
offered reasonable indemnity, to such Trustee to institute such a proceeding,
and the Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of the same
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, such limitations do not
apply to a suit instituted by a holder of a Debt Security for enforcement of
payment of the principal of and interest on such Debt Security on or after the
respective due dates expressed in such Debt Security.
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The Company is required to furnish to the Trustees annually a statement as
to the performance by the Company of its obligations under the respective
Indentures and as to any default in such performance.
SATISFACTION AND DISCHARGE
An Indenture will be discharged and will cease to be of further effect,
except as to surviving rights or registration of transfer or exchange of the
Debt Securities to which such Indenture pertains, as expressly provided for in
such Indenture, as to all such Debt Securities outstanding when (1) either (A)
all such outstanding Debt Securities have been delivered to the Trustee for
cancellation or (B) all such outstanding Debt Securities not theretofore
delivered to the Trustee for cancellation have become due and payable or will
become due and payable at their stated maturity within one year, or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the serving of notice of redemption by the Trustee, and the
Company has irrevocably deposited or caused to be deposited with the Trustee
funds in an amount sufficient to pay and discharge the entire indebtedness on
such Debt Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on such Debt
Securities to the date of deposit or to the stated maturity or redemption
date, as the case may be, together with instructions from the Company
irrevocably directing the Trustee to apply such funds to the payment thereof
at maturity or redemption, as the case may be, (2) the Company has paid all
other sums payable under such Indenture by the Company; and (3) the Company
has delivered to the Trustee an officers' certificate and an opinion of
counsel satisfactory to the Trustee, which, taken together, state that all
conditions precedent under such Indenture relating to the satisfaction and
discharge thereof have been complied with.
AMENDMENTS AND WAIVERS
From time to time, the Company and the Trustee may, without the consent of
the holders of Debt Securities, amend, waive or supplement the Indenture to
which such Debt Securities pertain or such Debt Securities for certain
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies, qualifying, or maintaining the qualification of, such
Indenture under the Trust Indenture Act of 1939, or making any change that
does not adversely affect the rights of any holder of such Debt Securities.
Other amendments and modifications of an Indenture or a series of Debt
Securities may be made by the Company and the Trustee with the consent of the
holders of not less than a majority of the aggregate principal amount of the
Debt Securities of such series then outstanding; provided, however, that no
such modification or amendment may, without the consent of the holder of each
outstanding Debt Security affected thereby, (1) change the stated maturity of
the principal of, or any installment of interest on, any Debt Security, (2)
reduce the principal amount of, premium, if any, or interest on any Debt
Security, (3) change the currency of payment of any Debt Security, (4) impair
the right to institute suit for the enforcement of any payment on any Debt
Security, (5) reduce the percentage of aggregate principal amount of
outstanding Debt Securities of a series necessary to amend the Indenture or to
waive compliance with certain provisions of the Indenture or to waive certain
defaults, or (6) modify the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may waive compliance by the Company with certain
restrictive provisions of, and any past default under, the applicable
Indenture with respect to that series, except a default in the payment of
principal of, premium, if any, or interest on any Debt Security of that series
or a provision of an applicable Indenture which cannot be modified without the
consent of each holder of the Debt Security affected.
DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Company at its option (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated
Debt Securities of such series, and to maintain an office or agency
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in respect of the Debt Securities and hold moneys for payment in trust) or
(ii) will (A) be released from its obligations to comply with certain
covenants relating to the Debt Securities of such series and (B) no longer be
subject to certain Events of Default with respect to the Debt Securities of
such series, in each case, as specified in the applicable Prospectus
Supplement. The Company may elect such discharge or release only if the
Company irrevocably deposits with the applicable Trustee, in trust, money,
government obligations of the government issuing the currency in which the
Debt Securities of the relevant series are denominated or a combination of
money or government obligations that through the payment of interest on and
principal of such government obligations in accordance with their terms will
provide money in an amount sufficient to pay all the principal of, premium, if
any, and interest on the Debt Securities of such series on the dates such
payments are due (up to the stated maturity date, or the redemption date, as
the case may be) in accordance with the terms of such Debt Securities. Such a
trust may only be established if, among other things, (a) no Event of Default
described under "Events of Default" shall have occurred and be continuing and
(b) the Company shall have delivered an opinion of counsel to the effect that
(i) the holders of the Debt Securities will not recognize gain or loss for
United States federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States federal income tax in the same
manner as if such defeasance had not occurred, and (ii) the trust resulting
from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940. Such opinion, in
the case of defeasance under clause (i) above, must refer to and be based upon
a ruling of the Internal Revenue Service or a change in applicable federal
income tax law occurring after the date of the applicable Indenture. In the
event the Company fails to comply with its remaining obligations under the
applicable Indenture after a defeasance of such Indenture with respect to the
Debt Securities of any series as described under clause (ii) above and the
Debt Securities of such series are declared due and payable because of the
occurrence of any undefeased Event of Default, the amount of money and
government obligations on deposit with the applicable Trustee may be
insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments.
Notwithstanding the description set forth under "Subordination of Senior
Subordinated Securities and Subordinated Securities" above, in the event that
the Company deposits money or government obligations in compliance with the
Indenture that governs any Senior Subordinated Securities or Subordinated
Securities, as the case may be, in order to defease all or certain of its
obligations with respect to the applicable series of Debt Securities, the
money or government obligations so deposited will not be subject to the
subordination provisions of the applicable Indenture, and the indebtedness
evidenced by such series of Debt Securities will not be subordinated in right
of payment to the holders of applicable Senior Indebtedness to the extent of
the money or government obligations so deposited.
THE TRUSTEES
Each Indenture will provide that, except during the continuance of an Event
of Default, the Trustee thereunder will perform only such duties as are
specifically set forth in the Indenture. If an Event of Default occurs and is
continuing, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise
as a prudent Person would exercise under the circumstances in the conduct of
such Person's own affairs.
Each Indenture will, and provisions of the Trust Indenture Act of 1939, as
amended, contain limitations on the rights of the Trustee thereunder, should
it become a creditor of the Company, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. The Trustee is permitted to engage in other
transactions; provided, however, that if it acquires any conflicting interest
(as defined) it must eliminate such conflict or resign.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities are issuable in definitive form or in temporary or permanent
global form.
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Debt Securities of any series will be exchangeable for other Debt Securities
of the same series and of a like aggregate principal amount and tenor of
different authorized denominations.
Debt Securities may be presented for exchange, as provided above, and for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office or agency of the Company maintained for such purposes
and at any other office or agency maintained for such purpose with respect to
any series of Debt Securities and referred to in the applicable Prospectus
Supplement, without a service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture. Such transfer
or exchange will be effected upon the satisfaction of the Company or its
agent, as the case may be, with the documents of title and identity of the
person making the request.
In the event of any redemption in part, the Company will not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on the day of mailing of the relevant notice of redemption;
or (ii) register the transfer of or exchange any Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest on Debt Securities will be made
in the designated currency or currency unit at the office of such Paying Agent
or Paying Agents as the Company may designate from time to time, except that
at the option of the Company payment of any interest may be made by check
mailed to the address of the person entitled thereto at the address in the
Security Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities will be
made to the person in whose name such Debt Security is registered at the close
of business on the record date for such interest payment.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee will be designated as a Paying Agent for
the Trustee for payments with respect to Debt Securities. Any other Paying
Agents will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that the Company will be required to maintain a Paying
Agent in each place of payment for each series of Debt Securities.
All monies paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security that remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are sold in offshore transactions
initially may be represented by one or more temporary global Debt Securities,
without interest coupons, to be deposited with or on behalf of, and registered
in the name of, a depositary or its nominee (a "Depositary") identified in the
applicable Prospectus Supplement for credit to the purchasers' respective
accounts at Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System ("Euroclear") and Cedel, societe anonyme
("Cedel"). On and after the date determined as provided in any such temporary
global Debt Security and described in the applicable Prospectus Supplement,
each such temporary global Debt Security will be exchangeable for definitive
Debt Securities or all or a portion of a permanent global security, or any
combination thereof, as specified in the applicable Prospectus Supplement.
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PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form as
a Global Security, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
Global Security may exchange such interests for Debt Securities of such series
in definitive form of like tenor and principal amount in any authorized
denomination.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a Depositary or its nominee identified in the applicable Prospectus
Supplement. In such a case, one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by
the Depositary for such Global Security to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in the circumstances described
in the applicable Prospectus Supplement.
The specific terms of the depository arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Company expects that
the following provisions will apply to depository arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary. Upon the issuance and deposit with
or on behalf of the Depositary of such Global Security, the Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security
to the accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interest in such Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depositary for such Global Security. Ownership of beneficial
interests in such Global Security by persons that hold through participants
will be shown on, and the transfer of that ownership interest within such
participant will be effected only through, records maintained by such
participant. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. The
foregoing limitations and such laws may impair the ability to transfer
beneficial interests in such Global Securities.
So long as the Depositary for a Global Security is the registered owner of
such Global Security, such Depositary will be considered the sole owner or
holder of the Debt Securities represented by such Global Security for all
purposes under the applicable Indenture. Unless otherwise specified in the
applicable Prospectus Supplement, owners of beneficial interests in such
Global Security will not be entitled to have Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities of such
series in definitive form and will not be considered the holders thereof for
any purposes under the applicable Indenture. Accordingly, each person owning a
beneficial interest in such Global Security must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any
rights of a holder under the applicable Indenture. The Company understands
that under existing industry practices, if the Company requests any action of
holders, or an owner of a beneficial interest in such Global Security desires
to give any notice or take any action a holder is entitled to give or take
under an Indenture, the Depositary would authorize
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the participants to give such notice or take such action, and participants
would authorize beneficial owners owning through such participants to give
such notice or take such action or would otherwise act upon the instructions
of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN DEFINITIONS
"Change of Control" means the occurrence of any of the following events: (1)
any "person" or "group" (as such terms are used in Sections 13(d)(3) or
14(d)(2) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than
40% of the total voting power of the outstanding voting stock of the Company;
(2) the Company is merged with or into or consolidated with another Person
and, immediately after giving effect to the merger or consolidation, (A) less
than 50% of the total voting power of the outstanding voting stock of the
surviving or resulting Person is then "beneficially owned" (within the meaning
of Rule 13d-3 under the Exchange Act) in the aggregate by (x) the stockholders
of the Company immediately prior to such merger or consolidation, or (y) if a
record date has been set to determine the stockholders of the Company entitled
to vote with respect to such merger or consolidation, the stockholders of the
Company as of such record date and (B) any "person" or "group" has become the
direct or indirect "beneficial owner" of more than 40% of the total voting
power of the voting stock of the surviving or resulting Person; (3) the
Company, either individually or in conjunction with one or more subsidiaries,
sells, conveys, transfers or leases all or substantially all of the assets of
the Company and the subsidiaries, taken as a whole (either in one transaction
or a series of related transactions), including capital stock of the
subsidiaries, to any Person (other than the Company or a wholly owned
subsidiary); (4) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved
by a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (5) the
liquidation or dissolution of the Company.
"Indebtedness" means, with respect to any Person, (1) all liabilities of
such Person for borrowed money or for the deferred purchase price of property
or services, including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit, bankers'
acceptance or other similar credit transaction, (2) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments, (3)
all Indebtedness of such Person created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person, (4) all capitalized lease obligations of such Person, (5) all
Indebtedness referred to in the preceding clauses of other Persons, the
payment of which is secured by any lien upon property owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness, (6) all guarantees by such Person of Indebtedness referred
to in this definition, (7) all redeemable capital stock of such Person, which
is redeemable at the option of the holder, or mandatorily redeemable by the
Company, prior to 91 days after the stated maturity of the applicable Debt
Security, (8) all obligations of such Person under currency exchange contracts
and interest rate protection obligations and (9) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
such Person of the types referred to in clauses (1) through (8) above.
"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.
"Senior Indebtedness" means the principal of, premium, if any, and interest
on any Indebtedness of the Company (including, in the case of any bank credit
agreement and Senior Securities, interest accruing after the filing of a
petition by or against the Company under any bankruptcy law, in accordance
with and at the rate,
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including any default rate, specified with respect to such indebtedness,
whether or not a claim for such interest is allowed as a claim after such
filing in any proceeding under such bankruptcy law), whether outstanding on
the date of the Indentures or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Senior Subordinated Securities and Subordinated Securities. Notwithstanding
the foregoing, "Senior Indebtedness" does not include (1) Indebtedness
evidenced by the Senior Subordinated Securities and Subordinated Securities,
(2) Indebtedness that is expressly subordinate or junior in right of payment
to any Senior Indebtedness of the Company, (3) Indebtedness which, when
incurred and without respect to any election under Section 1111(b) of Title 11
United States Code, is by its terms without recourse to the Company, (4) any
repurchase, redemption or other obligation in respect of redeemable capital
stock of the Company, which is redeemable at the option of the holder, or
mandatorily redeemable by the Company, prior to 91 days after the stated
maturity of the applicable Debt Security, (5) to the extent it might
constitute Indebtedness, any liability for federal, state, local or other
taxes owed or owing by the Company, (6) Indebtedness of the Company to a
subsidiary of the Company or any other affiliate of the Company or any of such
affiliate's subsidiaries, and (7) that portion of any Indebtedness of the
Company which at the time of issuance is issued in violation of the
Indentures.
"Senior Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to Senior Indebtedness,
but prior in right of payment to Subordinated Indebtedness.
"Subordinated Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to Senior Indebtedness and Senior
Subordinated Indebtedness.
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DESCRIPTION OF PREFERRED STOCK
The Company's Restated Certificate of Incorporation authorizes 25,000,000
shares of preferred stock, par value $0.01 per share. Preferred Stock may be
issued from time to time in one or more classes or series, without stockholder
approval. Subject to limitations prescribed by law, the Board of Directors of
the Company is authorized to determine the different classes and/or series of
Preferred Stock and the powers, preferences and rights thereof.
The Company currently has one series of Preferred Stock outstanding,
designated as Series A Convertible Preferred Stock (the "Series A Preferred
Stock"). As of March 23, 1998, there were 1,138,729 shares of Series A
Preferred Stock outstanding that are listed on the New York Stock Exchange and
trade under the symbol "XTOpA." The Series A Preferred Stock ranks prior to
all shares of Common Stock as to payment of dividends and liquidation
distributions and provides for a liquidation preference of $25.00 per share
and cumulative dividends of $1.5625 per share per year. The Series A Preferred
Stock is subject to redemption by the Company under certain conditions and is
convertible into Common Stock at the rate of 2.16 shares of Common Stock (as
adjusted for the three-for-two stock split distributed on February 25, 1998)
for each share of Series A Preferred Stock. Holders of Series A Preferred
Stock are entitled to vote (1) with the holders of Common Stock the number of
votes equal to the number of shares of Common Stock into which such Series A
Preferred Stock is convertible and (2) separately as a class to elect two
additional directors if Series A Preferred Stock dividends are in arrears for
at least six quarters.
The following is a description of certain general terms and provisions of
Preferred Stock that may be offered hereby. The particular terms of any series
of Preferred Stock will be described in the applicable Prospectus Supplement.
If so indicated in a Prospectus Supplement, the terms of any such series may
differ from the terms set forth below. Certain provisions applicable to the
Company's Common Stock are set forth below in "Description of Common Stock."
The summary of terms of the Company's preferred stock (including the
Preferred Stock) contained in this Prospectus does not purport to be complete
and is subject to, and qualified in its entirety by, the provisions of the
Company's Restated Certificate of Incorporation and the certificate of
designations relating to each class or series of Preferred Stock, which will
be filed as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus is a part at or prior to the time of
issuance of such series of the Preferred Stock.
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of Preferred Stock.
The applicable Prospectus Supplement will describe the following terms of
the series of Preferred Stock in respect of which this Prospectus is being
delivered: (1) the designation and stated value, if any, per share of such
Preferred Stock and the number of shares offered; (2) the amount of
liquidation preference per share and any priority relative to any other class
or series of Preferred Stock or Common Stock; (3) the initial public offering
price at which such Preferred Stock will be issued; (4) the dividend rate or,
if applicable, any index or formula used to determine the amount of dividends
payable, the dates on which dividends shall be payable and the dates from
which dividends will commence to cumulate, if any; (5) any redemption or
sinking fund provisions; (6) any conversion or exchange rights; (7) any voting
rights; and (8) other rights, preferences, privileges, limitations and
restrictions.
GENERAL
The Preferred Stock offered hereby will be issued in one or more classes or
series. The holders of Preferred Stock will have no preemptive rights.
Preferred Stock, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable. Neither the par value nor the
liquidation preference is indicative of the price at which the Preferred Stock
will actually trade on or after the date of issuance.
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RANK
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, rank prior to the
Company's Common Stock and to all other classes and series of equity
securities of the Company now or hereafter authorized, issued or outstanding
(the Common Stock and such other classes and series of equity securities
collectively may be referred to herein as the "Junior Stock"), other than any
classes or series of equity securities of the Company ranking on a parity with
(the "Parity Stock") or senior to (the "Senior Stock") the Preferred Stock as
to dividend rights and rights upon liquidation, winding up or dissolution of
the Company. The Preferred Stock will be junior to all outstanding debt of the
Company. The Preferred Stock will be subject to creation of Senior Stock,
Parity Stock and Junior Stock to the extent not expressly prohibited by the
Company's Restated Certificate of Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both. Each declared dividend will be payable
to holders of record as they appear at the close of business on the stock
books of the Company on such record dates, not more than 60 calendar days
preceding the payment dates therefor, as are determined by the Board of
Directors.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a class or series of Preferred Stock
are noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such class or series, then
holders of such Preferred Stock will have no right to receive a dividend in
respect of such dividend period, and the Company will have no obligation to
pay the dividend for such period, whether or not dividends are declared
payable on any future dates. Dividends on the shares of each class or series
of Preferred Stock for which dividends are cumulative will accrue from the
date on which the Company initially issues shares of such class or series.
No full dividends will be declared or paid or set apart for payment on
Parity Stock or Junior Stock for any period unless full dividends for the
immediately preceding dividend period on the Preferred Stock offered hereby
and by the applicable Prospectus Supplement (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on such
Preferred Stock are cumulative) have been paid or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment. When dividends are not so paid in full (or a sum
sufficient for such full payment is not so set apart) upon such Preferred
Stock and any Parity Stock, dividends upon shares of such Preferred Stock and
dividends on such Parity Stock shall be declared pro rata so that the amount
of dividends declared per share on such Preferred Stock and such Parity Stock
shall in all cases bear to each other the same ratio that accrued dividends
for the then-current dividend period per share on the shares of such Preferred
Stock (including any accumulation in respect of unpaid dividends for prior
dividend periods, if dividends on such Preferred Stock are cumulative) and
accrued dividends, including required or permitted accumulations, if any, on
shares of such Parity Stock, bear to each other. Unless full dividends on such
Preferred Stock have been declared and paid or set apart for payment for the
immediately preceding dividend period (including any accumulation in respect
of unpaid dividends for prior dividend periods, if dividends on such Preferred
Stock are cumulative) (a) no cash dividend or distribution (other than in
shares of Junior Stock) may be declared, set aside or paid on the Junior
Stock, (b) the Company may not repurchase, redeem or otherwise acquire any
shares of its Junior Stock (except by conversion into or exchange for other
Junior Stock) and (c) the Company may not, directly or indirectly, repurchase,
redeem or otherwise acquire any shares of Preferred Stock or Parity Stock
otherwise than pursuant to certain pro rata offers to purchase or a concurrent
redemption of all, or a pro rata portion, of the outstanding shares of such
Preferred Stock and Parity Stock (except by conversion into or exchange for
Junior Stock).
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CONVERTIBILITY
The terms, if any, on which shares of Preferred Stock of any class or series
may be exchanged for or converted (mandatorily or otherwise) into shares of
Common Stock of the Company or another class or series of Preferred Stock or
other securities of the Company will be set forth in the Prospectus Supplement
relating thereto. See "Description of Common Stock."
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any class or series
may be redeemed will be set forth in the related Prospectus Supplement.
LIQUIDATION
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of a class or series of Preferred
Stock will be entitled, subject to the rights of creditors, but before any
distribution or payment to the holders of Junior Stock, to receive an amount
per share as set forth in the related Prospectus Supplement plus accrued and
unpaid dividends for the then-current dividend period (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such class or series of Preferred Stock are cumulative). If the
amounts available for distribution with respect to the Preferred Stock and
Parity Stock upon liquidation are not sufficient to satisfy the full
liquidation rights of all the outstanding Preferred Stock and Parity Stock,
then the holders of such stock will share ratably in any such distribution of
assets in proportion to the full respective preferential amount to which they
are entitled. After payment of the full amount of the liquidation preference,
unless otherwise specified in the applicable Prospectus Supplement, the
holders of shares of Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company.
VOTING
The Preferred Stock of a class or series will be entitled to vote only as
specified in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus
Supplement, the Preferred Stock will have the following rights. At any time
dividends in an amount equal to six quarterly dividend payments on the
Preferred Stock shall have accrued and be unpaid, holders of the Preferred
Stock shall have the right to a separate class vote (together with the holders
of shares of any Parity Stock upon which like voting rights have been
conferred and are exercisable, "Voting Parity Stock") to elect two additional
members of the Board of Directors of the Company at any meeting of
stockholders at which directors are elected that is held during the period
such dividends remain in arrears. The right of holders of Voting Parity Stock
to elect such two additional directors and the term of office of such
additional directors will terminate at the time that all accrued and unpaid
dividends on such Voting Parity Stock shall be declared and paid or set apart
for payment. If the right to elect such two additional directors shall accrue
more than 90 days before the date established for the next annual meeting of
stockholders, the Chairman of the Board of the Company shall call a special
meeting of holders of Voting Parity Stock within 20 days after a written
request therefor signed by holders of at least 10% of such Voting Parity Stock
outstanding is received by the Company. Additionally, without the affirmative
vote of the holders of two-thirds of the shares of Preferred Stock then
outstanding (voting separately as a class together with any Voting Parity
Stock), the Company may not, either directly or indirectly or through merger
or consolidation with any other corporation, (i) approve the authorization,
creation or issuance, or an increase in the authorized or issued amount, of
any class or series of stock ranking prior to the shares of Preferred Stock in
rights and preferences or (ii) amend, alter or repeal its Restated Certificate
of Incorporation or the Certificate of Designations so as to materially and
adversely change the specific terms of the Preferred Stock. An amendment that
increases the number of authorized shares of or authorizes the creation or
issuance of other Parity Stock or Junior Stock, or substitutes the surviving
entity in a merger, consolidation, reorganization or other business
combination for the Company, will not be considered to be such an adverse
change.
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NO OTHER RIGHTS
The shares of a class or series of Preferred Stock will not have any
preferences, voting powers or relative, participating, optional or other
special rights except as set forth above or in the related Prospectus
Supplement, the Restated Certificate of Incorporation and in the certificate of
designations or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each class or series of Preferred Stock will be
designated in the related Prospectus Supplement.
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DESCRIPTION OF COMMON STOCK
The Company has 100,000,000 authorized shares of Common Stock, par value
$0.01 per share. Common Stock may be issued from time to time in one or more
series, or divided into additional classes and such classes into one or more
series, with such terms, including all rights, preferences, restrictions and
qualifications, as are specified in the resolution or resolutions adopted by
the Board of Directors designating such class or series. The particular terms
of any series or class of Common Stock will be described in the applicable
Prospectus Supplement. Such terms may include, among others, any or all of the
following: (1) the number of shares to constitute such class or series and the
distinctive designation thereof; (2) the voting power, which may be full,
limited or none; (3) the dividend or manner for determining the dividend
payable with respect to the shares of such class or series and the date or
dates from which dividends will accrue, whether such dividends will be
cumulative, and, if cumulative, the date or dates from which dividends will
accumulate and whether the shares in such class or series will be entitled to
preference or priority over any other class or series of stock of the Company
with respect to payment of dividends; (4) the terms and conditions, including
price or a manner for determining the price, of redemption, if any, of the
shares of such class or series; (5) the terms and conditions of a retirement
or sinking fund, if any, for the purchase or redemption of the shares of such
class or series; (6) the amount which holders of shares of such class or
series will be entitled to receive, if any, in the event of any liquidation,
dissolution or winding up of the Company and whether such shares will be
entitled to a preference or priority over shares of another class or series
with respect to amounts received in connection with any liquidation,
dissolution or winding up of the Company; (7) whether the shares of such class
or series will be convertible into, or exchangeable for, shares of stock of
any other class or classes, or any other series of the same or any other class
or classes of stock, of the Company and the terms and conditions of any such
conversion or exchange; (8) the voting rights, if any, of shares of stock of
such class or series; (9) the status as to reissuance or sale of shares of
such class or series redeemed, purchased or otherwise reacquired or
surrendered to the Company on conversion; (10) the conditions and
restrictions, if any, on the payment of dividends or on the making of other
distributions on, or the purchase, redemption or other acquisition by the
Company or any subsidiary of, any other class or series of stock of the
Company ranking junior to such shares as to dividends or upon liquidation; and
(11) the conditions, if any, on the creation of indebtedness of the Company,
or any subsidiary.
Unless specified by the Board of Directors in resolutions designating a
class or series, all shares of the Common Stock will rank equally, and be
identical within their classes in all respects regardless of series. All
shares of any one series of a class of Common Stock will be of equal rank and
identical in all respects, except that shares of any one series issued at
different times may differ as to the dates which dividends thereon will accrue
and be cumulative.
Holders of Common Stock are not entitled to any cumulative voting rights or
rights to subscribe for or to purchase additional shares of Common Stock, any
shares of any class or series of Preferred Stock, or any other securities of
the Company. Holders of outstanding shares of Common Stock are, and unless
otherwise specified in the applicable Prospectus Supplement holders of shares
of Common Stock offered hereby will be, entitled (i) to voting rights on the
basis of one vote per share, (ii) to receive dividends if, when and as
declared by the Board of Directors out of funds legally available therefor and
(iii) to share ratably in any assets available for distribution to holders of
the Company's Common Stock upon liquidation of the Company.
The outstanding shares of Common Stock are, and shares offered hereby when
issued and sold against full payment therefor will be, validly issued fully
paid and nonassessable.
The outstanding shares of Common Stock are listed on the New York Stock
Exchange and trade under the symbol "XTO." As of March 23, 1998, the Company
had 38,972,109 outstanding shares of Common Stock. Chemical Shareholder
Services Group, Inc. is the transfer agent, registrar and dividend disbursing
agent for the Common Stock.
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DESCRIPTION OF WARRANTS
The following is a description of certain general terms and provisions of
the Warrants. The particular terms of any series of Warrants will be described
in the applicable Prospectus Supplement. If so indicated in a Prospectus
Supplement, the terms of any such series may differ from the terms set forth
below.
GENERAL
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), as well as Warrants to purchase other types of
securities, including equity securities. Warrants may be issued independently
or together with any Debt Securities and may be attached to or separate from
such Debt Securities. Each series of Warrants will be issued under a separate
warrant agreement (each a "Warrant Agreement") to be entered into between the
Company and a warrant agent ("Warrant Agent"). The Warrant Agent will act
solely as an agent of the Company in connection with the Warrants of such
series and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of Warrants. The following sets
forth certain general terms and provisions of the Warrants offered hereby.
The Company currently has outstanding warrants to acquire 937,500 shares of
Common Stock at a price of $15.31 per share (as adjusted for the three-for-two
stock split distributed on February 25, 1998). These warrants were issued to
Amoco Corporation as part of the consideration for producing properties
acquired by the Company on December 1, 1997.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the following terms of
the Debt Warrants in respect of which this Prospectus is being delivered: (1)
the title of such Debt Warrants; (2) the aggregate number of such Debt
Warrants; (3) the price or prices at which such Debt Warrants will be issued;
(4) the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of such Debt Warrants; (5) if applicable,
the designation and terms of the Debt Securities with which such Debt Warrants
are issued and the number of such Debt Warrants issued with each such Debt
Security; (6) if applicable, the date on and after which such Debt Warrants
and the related Debt Securities will be separately transferable; (7) the price
at which the Debt Securities purchasable upon exercise of such Debt Warrants
may be purchased; (8) the date on which the right to exercise such Debt
Warrants will commence and the date on which such right will expire; (9) if
applicable, the minimum or maximum amount of such Debt Warrants which may be
exercised at any one time; (10) if applicable, any index or formula used to
determine the amount of payments of principal of and any premium and interest
on Debt Securities purchasable upon exercise of such Debt Warrants; (11)
information with respect to book-entry procedures, if any; (12) if applicable,
a discussion of certain United States federal income tax considerations; and
(13) any other terms of such Debt Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Debt Warrants.
OTHER WARRANTS
The Company may issue other Warrants. The applicable Prospectus Supplement
will describe the following terms of any such other Warrants in respect of
which this Prospectus is being delivered: (1) the title of such Warrants; (2)
the securities (which may include Preferred Stock or Common Stock) and/or
amount of cash consideration for which such Warrants are exercisable; (3) the
price or prices at which such Warrants will be issued; (4) if applicable, the
designation and terms of the Preferred Stock or Common Stock with which such
Warrants are issued and the number of such Warrants issued with each share of
Preferred Stock or Common Stock; (5) if applicable, the date on and after
which such Warrants and the related Preferred Stock or Common Stock will be
separately transferable; (6) if applicable, any index or formula used to
determine the price or prices at which such other securities and/or cash
consideration will be issued; (7) if applicable, a discussion of certain
United States federal income tax considerations; and (8) any other terms of
such Warrants, including terms, procedures and limitations relating to the
exchange and exercise of such Warrants.
24
<PAGE>
PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters, through agents
or dealers or directly to other purchasers. The applicable Prospectus
Supplement will set forth the names of any underwriters or agents and the
amount of Securities, if any, to be purchased by such underwriters or sold
through such agents.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers in the form of
discounts, concessions or commissions. Underwriters, agents and dealers
participating in the distribution of the Securities may be deemed to be
underwriters within the meaning of the Securities Act.
Pursuant to agreements which may be entered into between the Company and any
underwriters or agents named in the applicable Prospectus Supplement, such
underwriters or agents may be entitled to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company may
issue Securities to or through underwriters, agents or dealers in connection
with the conversion or redemption of its outstanding securities.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as agents for the Company to
solicit offers by certain institutional investors to purchase Securities from
the Company pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but shall in
all cases be subject to the approval of the Company. The obligations of the
purchaser under any such contract will not be subject to any conditions except
(i) the investment in the Securities by the institution shall not at the time
of delivery be prohibited by the laws of any jurisdiction in the United States
to which such institution is subject, and (ii) if a portion of the Securities
is being sold to underwriters, the Company shall have sold to such
underwriters the Securities not sold for delayed delivery. Underwriters and
such other persons will not have any responsibility in respect of the validity
or performance of such contracts.
Although the Company has previously issued debt securities, preferred stock,
common stock and warrants to purchase Common Stock, any Debt Securities,
Preferred Stock, Common Stock and Warrants offered may be a new issue of
securities with no established trading market. Any underwriters to whom such
Debt Securities, Preferred Stock and Warrants are sold by the Company for
public offering and sale may make a market in such Debt Securities, Preferred
Stock and Warrants, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of or the trading markets for any Debt
Securities, Preferred Stock or Warrants.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
The specific terms and manner of sale of the Securities in respect of which
this Prospectus is being delivered will be set forth or summarized in the
applicable Prospectus Supplement.
VALIDITY OF SECURITIES
The validity of the Securities offered will be passed upon for the Company
by Kelly, Hart & Hallman, P.C., Fort Worth, Texas.
25
<PAGE>
EXPERTS
The information incorporated by reference in this Prospectus from the
Company's Annual Report on Form 10-K for the year ended December 31, 1996
regarding the quantities of proved reserves of the oil and gas properties
owned by the Company and the future net cash flows and the present values
thereof from such reserves is derived from reserve reports prepared or
reviewed by Miller and Lents, and, to such extent, are included or
incorporated by reference herein in reliance upon the authority of said firm
as experts with respect to the matters contained in such reports.
The consolidated financial statements of Cross Timbers Oil Company as of
December 31, 1997 and 1996, and for the three years in the period ended
December 31, 1997, incorporated by reference in this Prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting
and auditing in giving said reports.
With respect to the unaudited interim financial information for the Company
incorporated by reference herein, Arthur Andersen LLP has applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their separate reports thereon such
financial information incorporated by reference herein, they did not audit and
they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
In addition, Arthur Andersen LLP is not subject to the liability provisions of
Section 11 of the Securities Act for their report on the unaudited interim
financial information because these reports are not a "report" or a "part" of
the Registration Statement prepared or certified by Arthur Andersen LLP within
the meaning of Sections 7 and 11 of the Securities Act.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files periodic reports, proxy statements and
other information with the Commission. Reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 and at the regional offices of the Commission
located at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Suite 1400, Northwestern Atrium Center, 14th Floor, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may also be obtained at
prescribed rates by writing to the Commission, Public Reference Section, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and such
information may also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005. The Commission maintains
a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and other
information may be found on the Commission's Web site address,
http://www.sec.gov.
The Company has filed with the Commission in Washington, D.C. a Registration
Statement on Form S-3 (including all amendments thereto, the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information pertaining to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto,
which may be examined without charge at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission upon payment of the prescribed fees.
26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
Set forth below is an estimate of the approximate amount of the fees and
expenses expected to be incurred by the Company in connection with offerings
described in this Registration Statement.
<TABLE>
<S> <C>
Registration Fee...................................................... $118,000
Trustee's and its Counsel's Fees and Expenses......................... 50,000
Printing and Engraving................................................ 100,000
Accountants' Fees and Expenses........................................ 40,000
Blue Sky and Fees and Expenses........................................ 10,000
Rating Agency Fees.................................................... 90,000
Legal Fees and Expenses............................................... 100,000
Engineers' Fees and Expenses.......................................... 10,000
Miscellaneous......................................................... 132,000
--------
$650,000
========
</TABLE>
- --------
* All amounts, other than the registration fee, are estimated and are subject
to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is incorporated in Delaware. Under Section 145 of the Delaware
General Corporation Law (the "DGCL"), a Delaware corporation has the power,
under specified circumstances, to indemnify its directors, officers, employees
and agents in connection with actions, suits or proceedings brought against
them by a third party or in the right of the corporation, by reason of the
fact that they were or are such directors, officers, employees or agents,
against expenses and liabilities incurred in any such action, suit or
proceeding so long as they acted in good faith and in a manner that they
reasonably believed to be in, or not opposed to, the best interests of such
corporation, and with respect to any criminal action, that they had no
reasonable cause to believe their conduct was unlawful. With respect to suits
by or in the right of such corporation, however, indemnification is generally
limited to attorneys' fees and other expenses and is not available if such
person is adjudged to be liable to such corporation unless the court
determines that indemnification is appropriate. A Delaware corporation also
has the power to purchase and maintain insurance for such persons. Article
Nine of the Restated Certificate of Incorporation of the Company permits
indemnification of directors and officers to the fullest extent permitted by
Section 145 of the DGCL. Reference is made to the Restated Certificate of
Incorporation of the Company.
Additionally, the Company has acquired directors and officers insurance in
the amount of $10,000,000, which includes coverage for liability under the
federal securities laws.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director provided that such provisions may not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock)
of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit. Article Ten of the Company's Restated Certificate
of Incorporation contains such a provision.
The above discussion of the Company's Restated Certificate of Incorporation
and Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive
and is qualified in its entirety by such Restated Certificate of Incorporation
and statutes.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <S>
4.1 Restated Certificate of Incorporation of the Company, incorporated by
reference from Exhibit 4.1 to the Company's Registration Statement on
Form S-8 (Reg. No. 33-81766), filed July 22, 1994
4.2 Bylaws of the Company, incorporated by reference from Exhibit 3.4 to
the Company's Registration Statement on Form S-1 (Reg. No. 33-59820),
filed March 19, 1993
4.3 Form of Indenture for Debt Securities
4.4* Form of Certificate of Designations of Preferred Stock
Form of Debt Warrant Agreement (including form of Debt Warrant
4.5* Certificate)
Form of Preferred Stock Warrant Agreement (including form of Preferred
4.6* Stock Warrant Certificate)
Form of Common Stock Warrant Agreement (including form of Common Stock
4.7* Warrant Certificate)
5.1 Opinion of Kelly, Hart & Hallman, P.C.
12.1 Computation of Ratio of Earnings to Fixed Charges, incorporated by
reference from Exhibit 12.1 to the Company's Annual Report on Form 10-
K for the year ended December 31, 1997
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Miller and Lents, Ltd.
Consent of Kelly, Hart & Hallman, P.C. (set forth in their opinion
23.3 filed as Exhibit 5.1)
24.1+ Power of Attorney
Statement of Eligibility of Trustee on Form T-1 with respect to Debt
25.1* Securities
</TABLE>
- --------
* To be filed by amendment
+ Previously filed
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes that, for the purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in this Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
II-2
<PAGE>
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, that are incorporated by reference in the Registration Statement;
(b) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN FORT WORTH, TEXAS ON THE 8TH DAY OF APRIL 1998.
Cross Timbers Oil Company
By: /s/ J. Richard Seeds
--------------------------
J. RICHARD SEEDS
EXECUTIVE VICE PRESIDENT
SIGNATURE TITLE
DATE
Director and April 8, 1998
* Chairman of the
- ------------------------------------- Board (Principal
BOB R. SIMPSON Executive Officer)
* Director, Vice April 8, 1998
- ------------------------------------- Chairman of the
STEFFEN E. PALKO Board and President
(Principal
Executive Officer)
/s/ J. Richard Seeds Director, Executive April 8, 1998
- ------------------------------------- Vice President
J. RICHARD SEEDS
* Director April 8, 1998
- -------------------------------------
J. LUTHER KING, JR.
* Director April 8, 1998
- -------------------------------------
JACK P. RANDALL
* Director April 8, 1998
- -------------------------------------
SCOTT G. SHERMAN
* Senior Vice April 8, 1998
- ------------------------------------- President and Chief
LOUIS G. BALDWIN Financial Officer
(Principal
Financial Officer)
* Senior Vice April 8, 1998
- ------------------------------------- President and
BENNIE G. KNIFFEN Controller
(Principal
Accounting Officer)
/s/ J. Richard Seeds
- -------------------------------------
J. RICHARD SEEDS
* BY ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <S>
4.1 Restated Certificate of Incorporation of the Company, incorporated by
reference from Exhibit 4.1 to the Company's Registration Statement on
Form S-8 (Reg. No. 33-81766), filed July 22, 1994
4.2 Bylaws of the Company, incorporated by reference from Exhibit 3.4 to
the Company's Registration
Statement on Form S-1 (Reg. No. 33-59820), filed March 19, 1993
4.3 Form of Indenture for Debt Securities
4.4* Form of Certificate of Designations of Preferred Stock
4.5* Form of Debt Warrant Agreement (including form of Debt Warrant
Certificate)
4.6* Form of Preferred Stock Warrant Agreement (including form of Preferred
Stock Warrant Certificate)
4.7* Form of Common Stock Warrant Agreement (including form of Common Stock
Warrant Certificate)
5.1 Opinion of Kelly, Hart & Hallman, P.C.
12.1 Computation of Ratio of Earnings to Fixed Charges, incorporated by
reference from Exhibit 12.1 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1997
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Miller and Lents, Ltd.
23.3 Consent of Kelly, Hart & Hallman, P.C. (set forth in their opinion
filed as Exhibit 5.1)
24.1+ Power of Attorney
25.1* Statement of Eligibility of Trustee on Form T-1 with respect to Debt
Securities
</TABLE>
- --------
* To be filed by amendment
+ Previously filed
<PAGE>
Exhibit 4.3
- --------------------------------------------------------------------------------
CROSS TIMBERS OIL COMPANY
----------------
DEBT SECURITIES
------------------------------------------------
INDENTURE
DATED AS OF ____________ __, 199_
-----------------------
-----------------------
TRUSTEE
- --------------------------------------------------------------------------------
1
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE....................... 1
SECTION 1.01. DEFINITIONS........................................... 1
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT........................................ 10
SECTION 1.03. RULES OF CONSTRUCTION................................. 11
ARTICLE 2 THE SECURITIES................................................... 11
SECTION 2.01. FORM AND DATING....................................... 11
SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES.................. 11
SECTION 2.03. EXECUTION OF SECURITIES............................... 15
SECTION 2.04. AUTHENTICATION AND DELIVERY OF SECURITIES............. 16
SECTION 2.05. DENOMINATION OF SECURITIES............................ 17
SECTION 2.06. REGISTRAR AND PAYING AGENT............................ 17
SECTION 2.07. REGISTRATION OF TRANSFER AND EXCHANGE................. 17
SECTION 2.08. TEMPORARY SECURITIES.................................. 19
SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN
SECURITIES........................................... 19
SECTION 2.10. CANCELLATION OF SURRENDERED SECURITIES................ 20
SECTION 2.11. PROVISIONS OF THE INDENTURE AND SECURITIES
FOR THE SOLE BENEFIT OF THE PARTIES AND THE HOLDERS.. 20
SECTION 2.12. PAYING AGENT TO HOLD MONEY IN TRUST................... 21
SECTION 2.13. PAYMENT OF INTEREST; INTEREST RIGHTS
PRESERVED............................................ 21
SECTION 2.14. SECURITIES DENOMINATED IN FOREIGN CURRENCIES.......... 21
SECTION 2.15. WIRE TRANSFERS........................................ 22
SECTION 2.16. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.. 22
SECTION 2.17. DEFAULTED INTEREST.................................... 24
SECTION 2.18. JUDGMENTS............................................. 25
SECTION 2.19. CUSIP NUMBERS......................................... 26
SECTION 2.20. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION....................................... 26
ARTICLE 3 REDEMPTION....................................................... 26
SECTION 3.01. APPLICABILITY OF ARTICLE.............................. 26
SECTION 3.02. NOTICES TO TRUSTEE.................................... 26
SECTION 3.03. SELECTION OF SECURITIES TO BE REDEEMED................ 27
SECTION 3.04. NOTICE OF REDEMPTION.................................. 27
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION........................ 28
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE........................... 28
SECTION 3.07. SECURITIES REDEEMED IN PART........................... 28
SECTION 3.08. MANDATORY AND OPTIONAL SINKING FUNDS.................. 28
ii
<PAGE>
SECTION 3.09. REDEMPTION OF SECURITIES FOR SINKING FUND............. 29
ARTICLE 4 COVENANTS........................................................ 29
SECTION 4.01. PAYMENT OF SECURITIES................................. 29
SECTION 4.02. CHANGE OF CONTROL..................................... 30
SECTION 4.03. MAINTENANCE OF OFFICE OR AGENCY....................... 31
SECTION 4.04. MONEY FOR THE SECURITY PAYMENTS TO BE
HELD IN TRUST........................................ 31
SECTION 4.05. PAYMENT OF TAXES AND OTHER CLAIMS..................... 32
SECTION 4.06. CORPORATE EXISTENCE................................... 32
SECTION 4.07. COMPLIANCE CERTIFICATE................................ 32
SECTION 4.08. FURTHER INSTRUMENTS AND ACTS.......................... 32
SECTION 4.09. PROHIBITION ON COMPANY BECOMING
INVESTMENT COMPANY................................... 33
ARTICLE 5 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............. 33
SECTION 5.01. COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS... 33
SECTION 5.02. SUCCESSOR SUBSTITUTED................................. 33
ARTICLE 6 DEFAULTS AND REMEDIES............................................ 34
SECTION 6.01. EVENTS OF DEFAULT..................................... 34
SECTION 6.02. ACCELERATION.......................................... 35
SECTION 6.03. OTHER REMEDIES........................................ 36
SECTION 6.04. WAIVER OF PAST DEFAULTS............................... 36
SECTION 6.05. CONTROL BY MAJORITY................................... 37
SECTION 6.06. LIMITATION ON SUITS................................... 37
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.................. 37
SECTION 6.08. COLLECTION SUIT BY TRUSTEE............................ 37
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM...................... 38
SECTION 6.10. PRIORITIES............................................ 38
SECTION 6.11. UNDERTAKING FOR COSTS................................. 39
ARTICLE 7 TRUSTEE.......................................................... 39
SECTION 7.01. DUTIES OF TRUSTEE..................................... 39
SECTION 7.02. RIGHTS OF TRUSTEE..................................... 40
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.......................... 42
SECTION 7.04. TRUSTEE'S DISCLAIMER.................................. 42
SECTION 7.05. NOTICE OF DEFAULTS.................................... 42
SECTION 7.06. COMPENSATION AND INDEMNITY............................ 42
SECTION 7.07. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE.............. 43
SECTION 7.08. SUCCESSOR TRUSTEE BY MERGER........................... 44
SECTION 7.09. ELIGIBILITY; DISQUALIFICATION......................... 44
SECTION 7.10. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..... 44
ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.............. 44
iii
<PAGE>
SECTION 8.01. APPLICABILITY OF ARTICLE.............................. 44
SECTION 8.02. DISCHARGE OF LIABILITY ON SECURITIES.................. 44
SECTION 8.03. DEFEASANCE............................................ 45
SECTION 8.04. CONDITIONS TO DEFEASANCE.............................. 46
SECTION 8.05. APPLICATION OF TRUST MONEY............................ 47
SECTION 8.06. REPAYMENT TO COMPANY.................................. 47
SECTION 8.07. INDEMNITY FOR GOVERNMENT OBLIGATIONS.................. 47
SECTION 8.08. REINSTATEMENT......................................... 47
ARTICLE 9 SUPPLEMENTAL INDENTURES.......................................... 48
SECTION 9.01. WITHOUT CONSENT OF HOLDERS............................ 48
SECTION 9.02. WITH CONSENT OF HOLDERS............................... 49
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT................... 50
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND
WAIVERS.............................................. 50
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES................. 51
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURE................ 51
ARTICLE 10 SUBORDINATION OF THE SECURITIES................................. 51
SECTION 10.01. APPLICABILITY OF ARTICLE; AGREEMENT
TO SUBORDINATE...................................... 51
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY................. 52
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS....................... 53
SECTION 10.04. SECURITY PAYMENTS PERMITTED IF NO DEFAULT............ 55
SECTION 10.05. WHEN SECURITY PAYMENT MUST BE PAID OVER.............. 55
SECTION 10.06. NOTICES BY THE COMPANY............................... 55
SECTION 10.07. SUBROGATION.......................................... 55
SECTION 10.08. RELATIVE RIGHTS...................................... 55
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY..... 56
SECTION 10.10. DISTRIBUTION OF NOTICE TO REPRESENTATIVE............. 56
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT................... 56
SECTION 10.12. CONSENT OF HOLDERS OF SPECIFIED
SENIOR INDEBTEDNESS................................. 57
SECTION 10.13. CONTRACTUAL SUBORDINATION............................ 57
ARTICLE 11 CONVERSION OF SECURITIES........................................ 57
SECTION 11.01. APPLICABILITY; CONVERSION PRIVILEGE AND
CONVERSION PRICE.................................... 57
SECTION 11.02. EXERCISE OF CONVERSION PRIVILEGE..................... 58
SECTION 11.03. FRACTIONS OF SHARES.................................. 59
SECTION 11.04. ADJUSTMENT OF CONVERSION PRICE....................... 59
SECTION 11.05. NOTICE OF ADJUSTMENT OF CONVERSION PRICE............. 61
SECTION 11.06. NOTICE OF CERTAIN CORPORATION ACTION................. 61
SECTION 11.07. COMPANY TO RESERVE COMMON SHARES..................... 62
SECTION 11.08. TAXES ON CONVERSION.................................. 62
SECTION 11.09. COVENANT AS TO COMMON STOCK.......................... 62
iv
<PAGE>
SECTION 11.10. COMPANY TO RECEIVE CONVERTED SECURITIES.............. 62
SECTION 11.11. PROVISIONS IN CASE OF CONSOLIDATION,
MERGER OR SALE OF ASSETS............................ 62
SECTION 11.12. RESPONSIBILITY OF TRUSTEE AND CONVERSION AGENT....... 63
ARTICLE 12 HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY................ 64
SECTION 12.01 DISCLOSURE OF NAMES AND ADDRESSES OF
HOLDERS............................................. 64
SECTION 12.02 REPORTS BY TRUSTEE................................... 64
SECTION 12.03 REPORTS BY COMPANY................................... 64
ARTICLE 13 MISCELLANEOUS................................................... 65
SECTION 13.01. COMPLIANCE CERTIFICATES AND OPINIONS................. 65
SECTION 13.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE............... 65
SECTION 13.03. ACTS OF HOLDERS...................................... 66
SECTION 13.04. TRUST INDENTURE ACT CONTROLS......................... 67
SECTION 13.05. NOTICES.............................................. 67
SECTION 13.06. COMMUNICATION BY HOLDERS WITH OTHER
HOLDERS............................................. 68
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR......... 68
SECTION 13.08. LEGAL HOLIDAYS....................................... 68
SECTION 13.09. GOVERNING LAW........................................ 69
SECTION 13.10. NO RECOURSE AGAINST OTHERS........................... 69
SECTION 13.11. SUCCESSORS........................................... 69
SECTION 13.12. MULTIPLE ORIGINALS................................... 69
SECTION 13.13. TABLE OF CONTENTS; HEADINGS.......................... 69
v
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INDENTURE dated as of ____________ __, 199_, among CROSS TIMBERS OIL
COMPANY, a Delaware corporation (the "COMPANY"), and ________________________, a
__________ corporation, as trustee (the "TRUSTEE").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of unsecured debentures,
notes or other evidences of indebtedness (herein called the "Securities") to be
issued by the Company, unlimited as to principal amount, to bear such rates of
interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of a series thereof, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under 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 Stock, by contract or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
"BANK CREDIT FACILITY" means collectively, one or more senior credit
facilities or commercial paper facilities with banks or other institutional
lenders (including, without limitation, the credit facility pursuant to the
Revolving Credit Agreement, dated November 21, 1997, as amended, among the
Company, Morgan Guaranty Trust Company of New York and NationsBank of Texas,
N.A., as co-agents and the banks named therein), together with any security and
related documents, as all such credit facilities and documents may be amended,
supplemented, extended, increased, refinanced or replaced from time to time.
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"BANKRUPTCY LAW" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions are authorized or obligated by
law or executive order to close in New York, New York and, with respect to any
payment of cash or delivery of securities, the place of such payment or
delivery.
"CAPITALIZED LEASE OBLIGATION" of any Person means the obligation of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Securities convertible into an equity
interest), warrants or options to subscribe for or to acquire an equity interest
in such Person; PROVIDED, HOWEVER, that "Capital Stock" shall not include
Redeemable Stock.
"CHANGE OF CONTROL" shall be deemed to occur if (i) any "person" or "group"
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 40% of the total voting power of all classes of the
Voting Stock of the Company and/or warrants or options to acquire such Voting
Stock, calculated on a fully diluted basis, (ii) the Company is merged with or
into or consolidated with another Person and, immediately after giving effect to
the merger or consolidation, (A) less than 50% of the total voting power of the
outstanding Voting Stock of the surviving or resulting Person is then
"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if a record date has been set to determine
the stockholders of the Company entitled to vote with respect to such merger or
consolidation, the stockholders of the Company as of such record date and (B)
any "person" or "group" has become the direct or indirect "beneficial owner" of
more than 40% of the total voting power of the Voting Stock of the surviving or
resulting Person; (iii) the Company, either individually or in conjunction with
one or more Subsidiaries, sells conveys, transfers or leases all or
substantially of the assets of the Company and the Subsidiaries, taken as a
whole (either in one transaction or a series of related transactions), including
capital stock of the Subsidiaries, to any Person (other than the Company or
Wholly Owned Subsidiary); (iv) during any consecutive two-year period,
individuals who at
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the beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (v) the
liquidation or dissolution of the Company.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument, such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at
________________, ______________.
"CURRENCY" means Dollars or Foreign Currency.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"DEFAULT" means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.
"DEPOSITARY" means, unless otherwise specified by the Company pursuant to
either Section 2.02 or 2.16 with respect to Registered Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, The Depository Trust Company, New York, New York, or any successor
thereto registered as a clearing agency under the Exchange Act or other
applicable statute or regulations.
"DOLLAR" or "$" means such currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
"DOLLAR EQUIVALENT" means, with respect to any monetary amount in a Foreign
Currency, at any time for the determination thereof, the amount of Dollars
obtained by converting such Foreign Currency involved in such computation into
Dollars at the spot rate for the purchase of Dollars with the applicable Foreign
Currency as quoted by Morgan Guaranty Trust Company of New York (unless another
comparable financial institution is designated by the Company) in New York, New
York at approximately 11:00 a.m. (New York time) on the date two business days
prior to such determination.
"EVENT OF DEFAULT" has the meaning specified in Section 6.01.
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"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended.
"EXCHANGE RATE CONTRACT" means, with respect to any Person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or any combination thereof, designed and entered
into in order to provide protection against fluctuations in currency exchange
rates, and entered into in the ordinary course of business of such Person.
"EUROPEAN CURRENCY UNITS" has the meaning assigned to it from time to time
by the Council of the European Communities.
"FOREIGN CURRENCY" means a currency issued by the government of any country
other than the United States or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries.
"GAAP" means United States generally accepted accounting principles as in
effect on the date of this Indenture, unless stated otherwise.
"GLOBAL SECURITY" means with respect to any series of Securities issued
hereunder, a Security which is executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and any Indentures
supplemental hereto, or resolution of the Board of Directors and set forth in an
Officers' Certificate, which shall be registered in the name of the Depositary
or its nominee and which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all the Outstanding Securities of
such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due and interest rate or method of determining interest.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation, any Lien on the
assets of such Person securing obligations of the primary obligor and any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase or payment of) any security for the payment of
such Indebtedness, (ii) to purchase Property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "GUARANTEED,"
"GUARANTEEING" and "GUARANTOR" shall have meanings correlative to the
foregoing); PROVIDED, HOWEVER, that a Guarantee by any Person shall not include
endorsements by such Person for collection or deposit in the ordinary course of
business.
"HOLDER" means the Person in whose name a Security is registered on the
Registrar's books.
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"INCUR" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"INCURRENCE," "INCURRED," "INCURRABLE" and "INCURRING" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that a change in GAAP that
results in an obligation of such Person that exists at such time, and is not
theretofore classified as Indebtedness, becoming Indebtedness shall not be
deemed an Incurrence of such Indebtedness. For purposes of this definition, any
non-interest bearing or other discount Indebtedness shall be deemed to have been
Incurred only on the date of the original issuance thereof.
"INDEBTEDNESS" means at any time (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person,
and whether or not contingent, (i) all liabilities of such Person for borrowed
money or for the deferred purchase price of property or services, including,
without limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit, bankers' acceptance or other similar
credit transaction, (ii) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (iii) all Indebtedness of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person, (iv) all Capitalized
Leased Obligations of such Person, (v) all Indebtedness referred to in the
preceding clauses of other Persons, the payment of which is secured by any Lien
upon Property owned by such Person even though such Person has not assumed or
become liable for the payment of such Indebtedness, (vi) all Guarantees by such
Person of Indebtedness referred to in this definition, (vii) all Redeemable
Stock of such Person, which is redeemable at the option of the holder, or
mandatorily redeemable by the Company, prior to 91 days after the stated
maturity of the applicable Debt Security, (viii) all Obligations of such Person
under Exchange Contracts and Interest Rate Protection Agreements and (ix) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of such Person of the types referred to in clauses (i) through
(viii) above.
"INTEREST PAYMENT DATE" means, when used with respect to any Security, the
Stated Maturity of an installment of interest on such Security.
"INTEREST RATE PROTECTION AGREEMENT" means, with respect to any Person, any
interest rate swap agreement, forward rate agreement, interest rate cap or other
rate hedge arrangement to or under which such Person is a party or a
beneficiary.
"ISSUE DATE" means the date upon which Securities of any series first are
issued and authenticated under this Indenture.
"LIEN" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, lien
(statutory or other), charge, easement, encumbrance, preference, priority or
other security or similar agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
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"OBLIGATION" means any principal, interest, premium, penalty, fee and any
other liability payable under the documentation governing any Indebtedness.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers meeting
the requirements set forth in Section 12.01 and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"ORDER" or "COMPANY ORDER" means a written order signed in the name of the
Company by an Officer and delivered to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.02.
"OUTSTANDING", when used with respect to any series of Securities, means,
as of the date of determination, all Securities of that series theretofore
authenticated and delivered under this Indenture, except:
(i) Securities of that series theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities of that series for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any paying agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
paying agent) for the Holders of such Securities; PROVIDED, that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
theTrustee has been made; and
(iii) Securities of that series which have been paid or in exchange
for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the
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Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or an Affiliate of the Company or of such
other obligor. In determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the maturity thereof pursuant to Section 6.02. In determining whether the
Holders of the requisite principal amount of the Outstanding Securities of any
series have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, the principal amount of a Security denominated in one or
more foreign currencies or currency units that shall be deemed to be Outstanding
for such purposes shall be the Dollar Equivalent, determined in the manner
provided as contemplated by Section 2.02 on the date of original issuance of
such Security, of the principal amount (or, in the case of any Original Issue
Discount Security, the Dollar Equivalent on the date of original issuance of
such Security of the amount determined as provided in the preceding sentence
above) of such Security.
"PAYING AGENT" has the meaning specified in Section 2.06.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or government or
any agency or political subdivision thereof or other entity.
"PLACE OF PAYMENT" means, when used with respect to the Securities of any
series, the place or places where the principal of, and premium, if any, and
interest on, the Securities of that series are payable as specified pursuant to
Section 2.02.
"PRINCIPAL AGENT" means the administrative agent(s) (or the institution(s)
performing similar functions) under the Bank Credit Facility.
"PROPERTY" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed or tangible or
intangible, including, without limitation, Capital Stock and other securities
issued by any other Person (but excluding Capital Stock or other securities
issued by such first mentioned Person).
"REDEEMABLE STOCK" of any Person means any equity security of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or otherwise (including on the happening of an
event), is or could become required to be redeemed for cash or other Property or
is or could become redeemable for cash or other Property at the option of the
holder thereof, in whole or in part, or is or could become exchangeable at the
option of the holder thereof for Indebtedness at any time in whole or in part,
PROVIDED, HOWEVER, that "REDEEMABLE STOCK" shall not include any security by
virtue of the fact that it may be exchanged or converted at the option of the
holder for Capital
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Stock of the Company having no preferences as to dividends or liquidation over
any other Capital Stock of the Company.
"REGISTERED HOLDER" means the Person in whose name a Security is registered
in the Security Register (as defined in Section 2.07(a)).
"REGISTRAR" has the meaning specified in Section 2.06.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
series, means the date specified for that purpose as contemplated by Section
2.02.
"REPRESENTATIVE" means any trustee, agent or representative (if any) for
the holders of any Indebtedness that constitutes Senior Indebtedness.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant secretary or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"SECURITY" has the meaning stated in the first paragraph of this Indenture
and more particularly means any Security of any series authenticated and
delivered under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, and interest
on any Indebtedness of the Company (including, in the case of any Bank Credit
Facility and Senior Securities, interest accruing after the filing of a petition
by or against the Company under any bankruptcy law, in accordance with and at
the rate, including any default rate, specified with respect to such
indebtedness, whether or not a claim for such interest is allowed as a claim
after such filing in any proceeding under such bankruptcy law), whether
outstanding on the date hereof or thereafter Incurred, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. [IF
SUBORDINATED INDEBTEDNESS, INSERT -- PROVIDED, HOWEVER, that any series of
Securities designated as Senior Subordinated Indebtedness shall constitute
Senior Indebtedness to any series of Securities designated as Subordinated
Indebtedness]. Notwithstanding the foregoing, Senior Indebtedness shall not
include (i) Indebtedness that is expressly subordinate or junior in right of
payment to any Senior Indebtedness of the Company, (ii) Indebtedness which, when
incurred and without respect to any election under Section 1111(b) of Title 11
United States Code, is by its terms without recourse to the Company, (iii) any
repurchase, redemption or other obligation in respect of Redeemable Stock of the
Company, which is redeemable at the option of the holer or mandatory redeemable
by the Company, prior to 91 days after the Stated Maturity of the Securities,
(iv) to the extent it might constitute Indebtedness, any liability for federal,
state, local or other taxes owed or owing by the Company, (v) Indebtedness of
the Company to a Subsidiary of the Company or any other Affiliate of the Company
or any of such Affiliate's Subsidiaries, and (vi) that portion of any
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Indebtedness of the Company which at the time of issuance is issued in violation
of the Indentures. [IF SENIOR SUBORDINATED INDEBTEDNESS, INSERT -- and (vii)
Indebtedness evidenced by the Securities.]
[If applicable, insert -- "SENIOR SUBORDINATED INDEBTEDNESS" means the
Securities and any other Indebtedness of the Company that specifically provides
that such Indebtedness is to rank PARI PASSU with other Senior Subordinated
Indebtedness of the Company and is not subordinated by its terms to any
Indebtedness of the Company which is not Senior Indebtedness.]
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Subsidiary of a Person that, together with its Subsidiaries, (A) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of such Person and its Subsidiaries or (B) as of the end
of such fiscal year, was the owner of more than 10% of the consolidated assets
of such Person and its Subsidiaries.
"SPECIFIED SENIOR INDEBTEDNESS" means Indebtedness of the Company under the
Bank Credit Facility.
"STATED MATURITY" when used with respect to any Security or any installment
of principal thereof or interest thereon, means the date specified in such
security as the fixed date on which the principal of such security or such
installment of principal or interest is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company that
specifically provides that such Indebtedness is to rank PARI PASSU with other
Subordinated Indebtedness of the Company and is not subordinated by its terms to
any Indebtedness of the Company which is not Senior Indebtedness or Senior
Subordinated Indebtedness.
"SUBSIDIARY" of a Person means (i) another Person which is a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned or
controlled by (A) the first Person, (B) the first Person and one or more of its
Subsidiaries or (C) one or more of the first Person's Subsidiaries or (ii)
another Person which is not a corporation (A) at least 50% of the ownership
interest of which and (B) the power to elect or direct the election of a
majority of the directors or other governing body of which are controlled by
Persons referred to in clause (i)(A), (i)(B) or (i)(C) above.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provision of this Indenture, and thereafter "Trustee" shall mean such
successor Trustee. If at any time there is more than one such Person, "Trustee"
as used with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.
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"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code as in
effect from time to time.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian, with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; PROVIDED, HOWEVER, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Subsidiary all of the
Voting Stock of which (except directors' qualifying shares) is at the time
owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities of any series.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
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SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(7) provisions apply to successive events and transactions; and
(8) references to agreements and other instruments include
subsequentamendments and waivers but only to the extent not prohibited by
this Indenture.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities of each series shall be in
substantially the form as shall be established, without the approval of any
Holder, by or pursuant to Board Resolutions of the Board of Directors of the
Company or in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with any law or the rules of any securities exchange
or to conform to general usage or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities. If the form of Securities of any series is established by action
taken pursuant to such Board Resolutions, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Order
contemplated by Section 2.02 for the authentication and delivery of such
Securities.
The definitive Securities of each series 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.
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SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities shall be issuable only in registered form in denominations
of $1,000 and integral multiples thereof or in the form of one or more Global
Securities in registered form. The Securities may be issued from time to time in
one or more series. All Securities of each series under this Indenture shall in
all respects be equally and ratably entitled to the benefits hereof with respect
to such series without preference, priority or distinction on account of the
actual time of the authentication and delivery or Stated Maturity of the
Securities of such series. There shall be established in or pursuant to Board
Resolutions of the Company and set forth, or determined in the manner provided,
in an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(b) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to the provisions of this Indenture);
(c) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security is
registered at the close of business on the Regular Record Date for such
interest;
(d) the date or dates on which the principal of the Securities of the
series is payable;
(e) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates are determined, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable on any Securities and the Regular Record Date for
any interest payable on any Interest Payment Date, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
(f) the place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee where the principal of and any
premium and interest on the Securities of the series shall be payable;
(g) the period or periods within which, the price or prices at which,
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
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(h) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund, purchase fund or
analogous obligation or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(i) the currency, currencies or currency unit or units in which the
Securities of such series shall be denominated and in which payment of the
principal of and any premium and interest on any Securities of such series
shall be payable if other than the currency of the United States of America
and the manner of determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of Dollar
Equivalent;
(j) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined by reference to
an index, formula or other method, including, without limitation, such
method based on (i) currency, currencies or currency units other than that
in which the Securities of such series are payable, (ii) changes in the
price of one or more other securities or groups or indices of securities,
or (iii) changes in the prices of one or more commodities or groups or
indexes of commodities or any combination of the foregoing, the manner in
which such amounts shall be determined and any commodities, currencies,
currency units or indices, value, rate or price relevant to such
determination;
(k) if the principal of or any premium or interest on any Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the period or periods within which, and the
terms and conditions upon which, such election is to be made and the amount
so payable or the manner in which such amount shall be determined;
(l) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.02 or provable in bankruptcy pursuant to Section 6.09;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series is not determinable upon original issuance thereof
or as of any date prior to Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such date
for any other purpose hereunder, including the principal amount thereof
which shall be due and payable upon any maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any date (or, in
any such case, the manner in which such principal amount shall be
determined);
(n) if applicable, that the Securities of the series shall be subject
to either or both of legal defeasance or covenant defeasance as provided in
Article 8 and the addition
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of additional covenants that may be subject to covenant defeasance
thereunder; PROVIDED THAT no series of Securities that is convertible into
or exchangeable for any other securities pursuant to Section 2.02(p) shall
be subject to legal defeasance pursuant to Section 8.03;
(o) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 2.16 and
any circumstances other than those set forth in Section 2.07 in which any
such Global Security may be transferred to, and registered and exchanged
for Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which any
such transfer may be registered;
(p) the terms and conditions, if any, pursuant to which the Securities
are convertible into or exchangeable at the option of the Holders thereof
or the Company, for or into new Securities of a different series, other
Securities of the same series of the same aggregate principal amount or a
different kind or different authorized denomination or denominations, or
other securities or other property, including shares of Common Stock of the
Company or any Subsidiaries of the Company or securities directly or
indirectly convertible into or exchangeable for such shares including the
extent to which the provisions of Article 11 are incorporated as part of
the Securities of such series, and any additions or deletions therefrom;
(q) if applicable, any covenants in addition to those set forth in
Article 4 to which the Company may be subject with respect to Securities of
such series; or any other additions, deletions or changes to the provisions
of Article 4 or any definitions relating to such Article that shall be
applicable to the Securities of the series (including a provision making
any Section of such Article inapplicable to the Securities of such series
or conditioning any merger, conveyance, transfer or lease permitted by
Article 5 upon the satisfaction of an Indebtedness coverage standard by the
Company and the Surviving Entity (as defined in Article 5));
(r) any trustees, authenticating or paying agents, transfer agents or
registrars;
(s) the terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Securities of the series of any properties, assets,
monies, proceeds, securities or other collateral, including whether certain
provisions of the TIA are applicable and any corresponding changes to
provisions of this Indenture as currently in effect;
(t) the terms, if any, of any Guarantee of the payment of principal
of, and premium, if any, and interest on, Securities of the series and any
corresponding additions to the provisions of this Indenture to provide for
such Guarantee;
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(u) the subordination, if any, of the Securities of the series and/or
any Guarantee thereof pursuant to Article 10 or otherwise and any changes
or additions to Article 10;
(v) with regard to Securities of the series that do not bear interest,
the dates for certain required reports to the Trustee;
(w) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series (including a provision making any Event of
Default set forth herein inapplicable to the Securities of that series) and
any change in the right of the Trustee or the Holders to declare the
principal of, and premium and interest on, such Securities due and payable;
(x) provisions, if any, regarding the appointment by the Trustee of an
authenticating agent in one or more places other than the location of the
office of the Trustee with power to act on behalf of the Trustee and
subject to its direction in the authentication and delivery of the
Securities of any one or more series in connection with such transactions
as shall be specified in the provisions of this Indenture or in or pursuant
to the Board Resolution or other supplemental indenture creating such
series;
(y) the provisions for the payment of any additional amounts, to the
extent not set forth herein;
(z) whether the provisions of Section 4.02 shall apply in respect of
such series; and
(aa) any other terms of the series, which shall not be inconsistent
with the provisions of this Indenture.
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 Resolutions of the Company referred to above and set forth, or determined
in the manner provided, in the Officers' Certificate referred to above or in any
such indenture supplemental hereto. All Securities of any one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.
If any of the terms of the series are established by action taken pursuant
to Board Resolutions of the Company, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificates setting forth the terms of the series.
SECTION 2.03. EXECUTION OF SECURITIES. The Securities shall be signed on
behalf of the Company by its Chairman of the Board, its Chief Executive Officer
or a Vice President and by its Secretary, an Assistant Secretary, a Treasurer or
an Assistant Treasurer. Such signatures upon the Securities may be the manual or
facsimile signatures of the present or any future such authorized officers and
may be imprinted or otherwise reproduced on the
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Securities. The seal of the Company, if any, may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities.
Only such Securities as shall bear thereon a certificate of authentication
substantially in the form hereinafter recited, signed manually by the Trustee,
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Trustee upon any Security executed by
the Company shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Securities so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Securities nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Securities had not ceased to be
such officer of the Company; and any Security may be signed on behalf of the
Company by such Persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Company, although at the date of
such Security or of the execution of this Indenture any such Person was not such
officer.
SECTION 2.04. AUTHENTICATION AND DELIVERY OF SECURITIES. At any time and
from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Securities to or upon an Order by the Company. In authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Securities;
(2) an executed supplemental Indenture, if any;
(3) an Officers' Certificate; and
(4) an Opinion of Counsel prepared in accordance with Section 13.01
which shall also state that the form of such Securities has been
established by or pursuant to a resolution of the Board of Directors or by
a supplemental Indenture as permitted by Section 2.02 in conformity with
the provisions of this Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate Securities of any series. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
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authenticating agent has the same rights as any Registrar, paying agent or agent
for service of notices and demands.
Unless otherwise provided in the form of Security for any series, each
Security shall be dated the date of its authentication.
SECTION 2.05. DENOMINATION OF SECURITIES. Unless otherwise provided in the
form of Security for any series, the Securities of each series shall be issuable
only as Registered Securities in such denominations as shall be specified or
contemplated by Section 2.02. In the absence of any such specification with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.06. REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "REGISTRAR") and an office or agency where Securities may
be presented for payment (the "PAYING AGENT"). Unless and until otherwise
determined by the Company by resolution of the Board of Directors, the register
of the Company for the purpose of registration, exchange or registration of
transfer of the Registered Securities shall be kept at the Corporate Trust
Office of the Trustee and, for this purpose, the Trustee shall be designated
"Registrar". The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may have one or more co-registrars and one or
more additional paying agents; PROVIDED, HOWEVER, that so long as
____________________ shall be the Trustee, without the consent of the Trustee,
there shall be no more than one Registrar or Paying Agent. The term "PAYING
AGENT" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the names and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.06. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
SECTION 2.07. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company shall keep or cause to be kept a register for each
series of Securities issued hereunder (hereinafter collectively referred to
as the "Security Register"), in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the
registration of Securities and the transfer of Securities as in this
Article 2 provided. At all reasonable times the Security Register shall be
open for inspection by the Trustee. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each Interest Payment Date and at such other
times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses
of Holders. Subject
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to Section 2.16, upon due presentment for registration of transfer of any
Security at any office or agency to be maintained by the Company in
accordance with the provisions of Section 4.03, the Company shall execute
and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Security or Securities of authorized
denominations for a like aggregate principal amount.
Securities of any series (other than a Global Security, except as set
forth below) may be exchanged for a like aggregate principal amount of
Securities of the same series of other authorized denominations. Subject to
Section 2.16, Securities to be exchanged shall be surrendered at the office
or agency to be maintained by the Company as provided in Section 4.03, and
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor the Security or Securities which the Holder making the
exchange shall be entitled to receive.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive.
(b) All Securities presented or surrendered for registration of
transfer, exchange or payment shall (if so required by the Company, the
Trustee or the Registrar) be duly endorsed or be accompanied by a written
instrument or instruments of transfer, in form satisfactory to the Company,
the Trustee and the Registrar, duly executed by the Holder or his attorney
duly authorized in writing.
All Securities issued in exchange for or upon transfer of Securities
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture as the Securities
surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto, other than
those expressly provided in this Indenture to be made at the Company's own
expense or without expense or without charge to the Holders.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Securities for a period of 15 days next preceding any
mailing of notice of redemption of Securities of such series or (b) to
register the transfer of or exchange any Securities selected, called or
being called for redemption.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, any paying agent or any Registrar may
deem and treat the Person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of, and premium, if any, and interest on, such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, any Paying Agent or Registrar shall be
affected by notice to the contrary.
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None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or any Registrar will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 2.08. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
photocopied, typewritten or otherwise produced) of any authorized denomination,
and substantially in the form of the definitive Securities in lieu of which they
are issued, in registered form, and with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as may
be appropriate. Every temporary Security shall be executed by the Company and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company at a Place of Payment for such series, without
charge to the Holder thereof, except as provided in Section 2.07 in connection
with a transfer 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 a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Securities represented thereby
pursuant to Section 2.07 or this Section 2.08, the temporary Global Security
shall be endorsed by the Trustee to reflect the reduction of the principal
amount evidenced thereby, whereupon the principal amount of such temporary
Global Security shall be reduced for all purposes by the amount so exchanged and
endorsed.
SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. If (i) any
mutilated Security is surrendered to the Trustee at its Corporate Trust Office
or (ii) the Company and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them and any Paying Agent harmless, and neither the Company nor the
Trustee receives notice that such Security has been acquired by a bona fide
purchaser, then the Company shall execute and, upon a Company Order, the Trustee
shall authenticate and deliver, if the requirements of Section 8-405 of the
Uniform Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security, a new Security of the same series of like
tenor, form, terms and principal amount, bearing a number not
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contemporaneously Outstanding, and neither gain nor loss in interest shall
result from such exchange or substitution. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. Upon the issuance of any substituted Security,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Security which has matured or is about
to mature or which has been called for redemption shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substituted
Security, pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Security) if the applicant for such payment
shall furnish the Company and the Trustee with such security or indemnity as
either may require to save it harmless from all risk, however remote, and, in
case of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Security and of the
ownership thereof.
Every substituted Security of any series issued pursuant to the provisions
of this Section 2.09 by virtue of the fact that any Security is destroyed, lost
or stolen shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be found at
any time, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly issued
hereunder. All Securities shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities, and shall preclude
any and all other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.10. CANCELLATION OF SURRENDERED SECURITIES. The Company at any
time may deliver Securities to the Trustee for cancellation. All Securities
surrendered for payment, redemption, registration of transfer or exchange shall,
if surrendered to the Company or any Paying Agent or a Registrar, be delivered
to the Trustee for cancellation by it, or if surrendered to the Trustee, shall
be canceled by it, and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee and
no one else shall cancel and destroy (subject to the record retention
requirements of the Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancellation and certification of their
destruction shall be delivered to the Company, unless otherwise directed. On
request of the Company, the Trustee shall deliver to the Company canceled
Securities held by the Trustee. If the Company shall acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented thereby unless and until the same
are delivered or surrendered to the Trustee for cancellation. The Company may
not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. PROVISIONS OF THE INDENTURE AND SECURITIES FOR THE SOLE
BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto, the Holders or any Registrar or Paying
Agent, any legal or equitable right,
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remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all its covenants, conditions and
provisions being for the sole benefit of the parties hereto, the Holders and any
Registrar and Paying Agents.
SECTION 2.12. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due date
of the principal and interest on any Security, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by the
Paying Agent. Upon complying with this Section, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.13. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Security that is payable and is punctually paid or
duly provided for on any Interest Payment Date shall be paid to the Person
in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest notwithstanding the
cancellation of such Security upon any transfer or exchange subsequent to
the Regular Record Date. Payment of interest on Securities shall be made at
the Corporate Trust Office of the Trustee (except as otherwise specified
pursuant to Section 2.02), or at the option of the Company, by check mailed
to the address of the Person entitled thereto as such address shall appear
in the Security Register or, if provided pursuant to Section 2.02 and in
accordance with arrangements satisfactory to the Trustee, at the option of
the Registered Holder by wire transfer to an account designated by the
Registered Holder.
(b) Subject to the clause (a) of this Section 2.13 and Section 2.17,
each Security of a particular series delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Security of the same series shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. SECURITIES DENOMINATED IN FOREIGN CURRENCIES.
(a) Payment of the principal of, and premium, if any, and interest on,
Securities of any series denominated in any Currency will be made in such
Currency.
(b) Unless Securities of any Series are denominated in a Currency,
payment of the principal of, and premium, if any, and interest on,
Registered Securities of such series will be made in Dollars.
(c) For the purposes of calculating the principal amount of Securities
of any series denominated in a Foreign Currency or Foreign Currencies
(including European Currency Units) for any purpose under this Indenture,
the principal amount of such
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Securities at any time Outstanding shall be deemed to be the Dollar
Equivalent of such principal amount as of the date of any such
calculation.
In the event any Foreign Currency or Currencies in which any payment
with respect to any series of Securities may be made ceases to be a freely
convertible Currency on United States Currency markets, for any date
thereafter on which payment of principal of, or premium, if any, or
interest on, the Securities of a series is due, the Company shall select
the Currency of payment for use on such date, all as provided in the
Securities of such series. In such event, the Company shall, as provided in
the Securities of such series, notify the Trustee of the Currency which it
has selected to constitute the funds necessary to meet the Company's
obligations on such payment date and of the amount of such Currency to be
paid. Such amount shall be determined as provided in the Securities of such
series. The payment to the Trustee with respect to such payment date shall
be made by the Company solely in the Currency so selected.
SECTION 2.15. WIRE TRANSFERS. Notwithstanding any other provision to the
contrary in this Indenture, the Company may make any payment of monies required
to be deposited with the Trustee on account of principal of, or premium, if any,
or interest on, the Securities (whether pursuant to optional or mandatory
redemption payments, interest payments or otherwise) by wire transfer in
immediately available funds to an account designated by the Trustee on or before
the date such monies are to be paid to the Holders of the Securities in
accordance with the terms hereof.
SECTION 2.16. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Section 2.02 that the
Securities of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute
and the Trustee or its agent shall, in accordance with Section 2.04,
authenticate and deliver, such Global Security or Securities, which (i)
shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, the Outstanding Securities of such series to
be represented by such Global Security or Securities, or such portion
thereof as the Company shall specify in an Officer's Certificate, (ii)
shall be registered in the name of the Depositary for such Global Security
or Securities or its nominee, (iii) shall be delivered by the Trustee or
its agent to the Depositary or pursuant to the Depositary's instruction and
(iv) shall bear a legend substantially to the following effect: "Unless and
until it is exchanged in whole or in part for the individual Securities
represented hereby, this Global Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary", or such other legend as may then be required
by the Depositary for such Global Security or Securities.
(b) Notwithstanding any other provision of this Section 2.16 or of
Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such
Global Security to be exchanged in whole or
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in part for definitive Securities in registered form, a Global Security
may be transferred, in whole but not in part and in the manner provided in
Section 2.07, only by the Depositary to a nominee of the Depositary for
such Global Security, or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary, or by the Depositary or a nominee of
the Depositary to a successor Depositary for such Global Security selected
or approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to continue
as Depositary for such Global Security or Securities or if at any time the
Depositary for the Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute,
rule or regulation, the Company shall appoint a successor Depositary with
respect to such Global Security or Securities. If a successor Depositary
for such Global Security or Securities is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company shall execute, and the Trustee or its
agent, upon receipt of a Company Order for the authentication and delivery
of such individual Securities of such series in exchange for such Global
Security, will authenticate and deliver, individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for
such Global Security or Securities.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securities of such series in
exchange in whole or in part for such Global Security, will authenticate
and deliver individual Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal
amount of such series or portion thereof in exchange for such Global
Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.02 with
respect to Securities issued or issuable in the form of a Global Security,
the Depositary for such Global Security may surrender such Global Security
in exchange in whole or in part for individual Securities of such series of
like tenor and terms in definitive form on such terms as are acceptable to
the Company, the Trustee and such Depositary. Thereupon the Company shall
execute, and the Trustee or its agent upon receipt of a Company Order for
the authentication and delivery of definitive Securities of such series
shall authenticate and deliver, without service charge, (1) to each Person
specified by such Depositary a new Security or Securities of the same
series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Global Security; and
(2) to such Depositary a new Global Security of like tenor and terms and in
an authorized denomination equal to the difference, if any, between the
principal amount of the
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surrendered Global Security and the aggregate principal amount of
Securities delivered to Holders thereof.
(iv) In any exchange provided for in this subsection (c), the
Company will execute and the Trustee or its agent will authenticate and
deliver individual Securities. Upon the exchange of the entire principal
amount of a Global Security for individual Securities, such Global Security
shall be canceled by the Trustee or its agent. Except as provided in
subsection (c)(iii), Registered Securities issued in exchange for a Global
Security pursuant to this Section 2.16 shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or the Registrar. The Trustee or
the Registrar shall deliver such Registered Securities to the Persons in
whose names such Registered Securities are so registered.
(v) Payments in respect of the principal of and interest on any
Securities registered in the name of the Depositary or its nominee will be
payable to the Depositary or such nominee in its capacity as the registered
owner of such Global Security. The Company and the Trustee may treat the
Person in whose name the Securities, including the Global Security, are
registered as the owner thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. None of the Company, the
Trustee, any Registrar, the Paying Agent or any agent of the Company or the
Trustee will have any responsibility or liability for (a) any aspect of the
records relating to or payments made on account of the beneficial ownership
interests of the Global Security by the Depositary or its nominee or any of
the Depositary's direct or indirect participants, or for maintaining,
supervising or reviewing any records of the Depositary, its nominee or any
of its direct or indirect participants relating to the beneficial ownership
interests of the Global Security, (b) the payments to the beneficial owners
of the Global Security of amounts paid to the Depositary or its nominee, or
(c) any other matter relating to the actions and practices of the
Depositary, its nominee or any of its direct or indirect participants. None
of the Company, the Trustee or any such agent will be liable for any delay
by the Depositary, its nominee, or any of its direct or indirect
participants in identifying the beneficial owners of the Securities, and
the Company and the Trustee may conclusively rely on, and will be protected
in relying on, instructions from the Depositary or its nominee for all
purposes (including with respect to the registration and delivery, and the
respective principal amounts, of the Securities to be issued).
SECTION 2.17. DEFAULTED INTEREST.
Any interest on any Security of a particular series which is payable,
but is not punctually paid or duly provided for, on the dates and in the
manner provided in the Securities of such series and in this Indenture
(herein called "Defaulted Interest") shall forthwith cease to be payable to
the Registered Holder thereof on the relevant record date by virtue of
having been such Registered Holder, and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in clause (i) or
(ii) below:
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(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such
Security of such series and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be
mailed, first class postage pre-paid, to each Holder thereof at its
address as it appears in the Security Register, not less than 10 days
prior to such special record date. 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 are registered at the
close of business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on
the Registered Securities of such series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which the Registered Securities of such series may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by
the Trustee.
SECTION 2.18. JUDGMENTS. The Company may provide pursuant to Section 2.02
for Securities of any series that (a) the obligation, if any, of the Company to
pay the principal of, and premium, if any, and interest on, the Securities of
any series in a Foreign Currency or Dollars (the "Designated Currency") as may
be specified pursuant to Section 2.02 is of the essence and agrees that, to the
fullest extent possible under applicable law, judgments in respect of Debt
Securities of such series shall be given in the Designated Currency; (b) the
obligation of the Company to make payments in the Designated Currency of the
principal of, and premium, if any, and interest on, such Securities shall,
notwithstanding any payment in any other Currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
Designated Currency that the Holder receiving such payment may, in accordance
with normal banking procedures, purchase with the sum paid in such other
Currency (after any premium and cost of exchange) on the business day in the
country of issue of the Designated Currency or in the international banking
community (in the case of a composite currency) immediately following the day on
which such Holder receives such payment; (c) if the amount
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in the Designated Currency that may be so purchased for any reason falls short
of the amount originally due, the Company shall pay such additional amounts as
may be necessary to compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
SECTION 2.19. CUSIP NUMBERS. The Company in issuing the Securities of any
series may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 2.20. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's Certificate of Authentication on all Securities authenticated by the
Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
As Trustee
By
----------------------------------
Authorized Signature
ARTICLE 3
REDEMPTION
SECTION 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their Stated Maturity except as otherwise specified as contemplated by Section
2.02 for Securities of such series.
SECTION 3.02. NOTICES TO TRUSTEE. If the Company elects to redeem all or
any part of the Securities of any series in accordance with their terms, it
shall notify the Trustee in writing of the redemption date, the principal amount
of Securities to be redeemed and the series and terms of the Securities pursuant
to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice
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shall be accompanied by an Officers' Certificate and an Opinion of Counsel from
the Company to the effect that such redemption will comply with the conditions
herein.
SECTION 3.03. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than all
the Securities of a series are to be redeemed, the Trustee shall select the
Securities of such series to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Securities of such series
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities of such series that have denominations
larger than $1,000. Securities and portions of them that the Trustee selects
shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.04. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a date for redemption of Securities of any series, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities of
such series to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent where payment will be made
upon presentation and surrender of Securities;
(4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(5) the terms of the Securities of that series pursuant to which the
Securities of that series are being redeemed;
(6) if fewer than all the outstanding Securities are to be redeemed, the
identification and principal amounts of the particular Securities to be
redeemed;
(7) that, unless the Company defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date, and, in the case
of Original Issue Discount Securities, original issue discount accrued after the
date fixed for redemption will cease to accrue; and
(8) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Securities.
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At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section at least
45 days before the redemption date.
The notice if given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to
the Holder of any Security of a series designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security of such series.
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Securities of a series called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date. If any
Security called for redemption shall not be so paid upon surrender thereof on
such redemption date, the principal, premium, if any, and interest shall bear
interest until paid from the redemption date at the rate borne by the Securities
of that series.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption date,
the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money in the
Currency in which such Securities are denominated sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which have been delivered by the Company to the Trustee for cancellation.
SECTION 3.07. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.08. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series,
resolution of the Board of Directors or a supplemental Indenture is herein
referred to as a "mandatory sinking fund payment", and any payment in excess of
such minimum amount provided for by the terms of Securities of any series,
resolution of the Board of Directors or a supplemental Indenture is herein
referred to as an "optional sinking fund payment".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option (a) deliver to the Trustee Securities of that series theretofore
purchased or otherwise acquired by the Company or (b) receive credit for the
principal amount of Securities of that series which have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, resolution or supplemental Indenture; PROVIDED, that
such Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Securities, resolution or supplemental Indenture for
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redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
SECTION 3.09. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60
days prior to each sinking fund payment date for any series of Securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms of that series, any resolution or supplemental Indenture, the portion
thereof, if any, which is to be satisfied by payment of cash in the Currency in
which the Securities of such series are denominated (except as provided pursuant
to Section 2.02) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to this Section 3.09
(which Securities, if not previously redeemed, will accompany such certificate)
and whether the Company intends to exercise its right to make any permitted
optional sinking fund payment with respect to such series. Such certificate
shall be irrevocable and upon its delivery the Company shall be obligated to
make the cash payment or payments therein referred to, if any, on or before the
next succeeding sinking fund payment date. Failure of the Company to deliver
such certificate (or to deliver the Securities specified in this paragraph)
shall not constitute a Default, but such failure shall require that the sinking
fund payment due on the next succeeding sinking fund payment date for that
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of such Securities subject to a mandatory sinking fund payment
without the option to deliver or credit Securities as provided in this Section
3.09 and without the right to make any optional sinking fund payment, if any,
with respect to such series.
The Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.03 and the Company shall
cause notice of the redemption thereof to be given in the manner provided in
Section 3.04 except that the notice of redemption shall also state that the
Securities are being redeemed by operation of the sinking fund. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in this Article 3.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay the
principal of and interest on the Securities of each series on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
a Paying Agent holds in accordance with this Indenture money sufficient to pay
in the Currency in which the Securities of such series are denominated, all
principal and interest then due and, in the case of Securities subordinated
pursuant to the terms of Article 10, the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Holders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
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SECTION 4.02. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of
the then outstanding Securities, in whole or in part, from the Holders of
such Securities in integral multiples of $1,000, at a purchase price (the
"Change of Control Purchase Price") equal to 101% of the aggregate
principal amount of such Securities, plus accrued and unpaid interest, if
any, to the Change of Control Purchase Date (as defined below), in
accordance with the procedures set forth in paragraphs (b), (c) and (d) of
this Section. The Company shall, subject to the provisions described below,
be required to purchase all securities properly tendered into the Change of
Control Offer and not withdrawn. The Company will not be required to make a
Change of Control Offer upon a Change of Control if a third party makes a
Change of Control Offer at the same purchase price, at the same times and
otherwise in substantial compliance with the requirements applicable to a
Change of Control Offer made by the Company and purchases all Securities
validly tendered and not withdrawn under such Change of Control Offer.
(b) The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the fifth
Business Day prior to the Change of Control Purchase Date (as defined
below).
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 13.05
and each Holder of the Securities in the manner provided in Section 13.05,
a notice (the "Change of Control Notice") stating:
(1) that a Change in Control has occurred and that such Holder
has the right to require the Company to repurchase such Holder's
Securities, or portion thereof, at the Change of Control Purchase
Price;
(2) any information regarding such Change of Control required to
be furnished pursuant to Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder;
(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than
70 days from the date the Change of Control occurred;
(4) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of
this Section 4.02, or payment is otherwise prevented, any Security, or
portion thereof, accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Purchase Date; and
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(6) the instructions a Holder must follow in order to have its
Securities repurchased in accordance with paragraph (d) of this
Section.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Company at the address specified in the
Change of Control Notice at least five Business Days prior to the Change of
Control Purchase Date. Holders will be entitled to withdraw their election
if the Company receives, not later than three Business Days prior to the
Change of Control Purchase Date, a facsimile transmission or letter setting
forth the name of the Holder, the certificate number(s) and principal
amount of the Securities delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is
withdrawing his election to have such Securities purchased. Holders whose
Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities
surrendered.
SECTION 4.03. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of such series may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of such
series and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more different or
additional offices or agencies (in or outside of The City of New York) where
Securities may be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; PROVIDED that no such
designation or rescission shall in any manner relieve the Company of its
obligations described in the preceding paragraph. The Company shall give prompt
written notice to the Trustee of any such designation and any change in the
location of any such other office or agency.
SECTION 4.04. MONEY FOR THE SECURITY PAYMENTS TO BE HELD IN TRUST. If the
Company, any Subsidiary of the Company or any of their respective Affiliates
shall at any time act as Paying Agent with respect to the Securities of any
series, such Paying Agent shall, on or before each due date of the principal of
(and premium, if any) or interest on any of the Securities, segregate and hold
in trust for the benefit of the Persons entitled thereto money sufficient to pay
the principal (and premium, if any) or interest so becoming due until such money
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
the Securities, it shall, prior to or on each due date of the principal of (and
premium, if any) or interest on any of the Securities, deposit with a Paying
Agent a sum sufficient to pay the
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principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Paying Agent shall
promptly notify the Trustee of the Company's action or failure so to act.
Any funds deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Securities and remaining unclaimed for two years after the date
upon which such payment shall have become due, shall be paid to the Company on
Order or, if then held by the Company, shall be discharged from such trust;
PROVIDED, HOWEVER, that the Company shall cause to be published at least once in
a newspaper of general circulation in The City of New York or mailed to each
Holder entitled to such unclaimed funds, notice that such funds remain unclaimed
and that, after a date specified therein, which shall be a date not less than 30
days from the date of such publication or mailing, any unclaimed balance of such
money remaining as of such date shall be repaid to the Company. After repayment
to the Company, Holders entitled to such funds shall look only to the Company
for payment without interest thereon, as an unsecured general creditor, and the
Trustee and the Paying Agent shall have no further liability with respect to
such trust money, and the Company shall not be a trustee in respect of such
funds.
SECTION 4.05. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Subsidiaries or upon the income,
profits or property of the Company or any of its Subsidiaries and (b) all
material lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the property of the Company or any of its
Subsidiaries; PROVIDED that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.06. CORPORATE EXISTENCE. The Company will preserve and keep in
full force and effect its corporate existence in accordance with applicable law,
except as provided in Section 5.01.
SECTION 4.07. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).
SECTION 4.08. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
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SECTION 4.09. PROHIBITION ON COMPANY BECOMING INVESTMENT COMPANY. The
Company shall not become an "investment company" as defined in the Investment
Company Act of 1940, as amended.
ARTICLE 5
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 5.01. COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS. The
Company shall not, in any single transaction or a series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer or lease or otherwise dispose of all or substantially
its Properties to any Person or group of Affiliated Persons, unless at the time
and after giving affect thereto:
(a) either (i) if the transaction or transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or
consolidation, or (ii) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
Properties of the Company as the case may be, are sold, assigned, conveyed,
transferred, leased or otherwise disposed of (any such surviving Person or
transferee Person being the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia and shall, in either case,
expressly assume by a supplemental indenture to this Indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company for the due and punctual payment of the
principal of (and premium, if any, on) and interest on all the Securities
and the performance and observance of every covenant of this Indenture on
the part of the Company to be performed or observed, and this Indenture
shall remain in full force and effect;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any Indebtedness not previously an obligation of the Company which becomes
the obligation of the Company in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default shall have
occurred and be continuing;
(c) if any of the Properties of the Company would upon such
transaction or series of related transactions become subject to any Lien,
the creation or imposition of such Lien shall have been in compliance with
the terms of any applicable supplemental indenture.
5.02 SUCCESSOR SUBSTITUTED. Upon any consolidation of the Company
with or merger of the Company with or into any other corporation or any sale,
assignment, lease, conveyance, transfer or other disposition of all or
substantially all of the Properties of the Company to any Person in accordance
with Section 5.01 hereof, the successor Person formed by such consolidation or
into which the Company is merged or which such sale, assignment,
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conveyance, transfer or other dispositions (other than by lease) is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and in the event of any such sale,
assignment, lease, conveyance, transfer or other disposition, the Company (which
term shall for this purpose mean the Person named as the "Company" in the first
paragraph of this Indenture or any successor Person which shall theretofore
become such in the manner described in Section 5.01 hereof), except in the case
of a lease, shall be discharged of all obligations and covenants under this
Indenture and the Securities and the Company may be dissolved and liquidated and
such dissolution and liquidation shall not cause a Change of Control under
clause (e) of the definition thereof to occur unless the merger, or the sale,
assignment, lease, conveyance, transfer or other disposition of all or
substantially all of the Properties of the Company to any Person otherwise
result in a Change of Control.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. Whenever used herein, an "EVENT OF
DEFAULT" means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) the Company shall fail to make any payment of interest on the
Securities of any series within 30 days after any such amount becomes due
in accordance with the terms thereof;
(b) the Company shall fail to make any payment of principal of (or
premium, if any, on) the Securities of any series when due in accordance
with the terms thereof, whether upon maturity, acceleration, sinking fund
payment date, call for redemption,call for purchase or otherwise;
(c) the Company shall fail to observe or perform any other covenant or
agreement contained in the Securities of any series or this Indenture and
such failure continues for a period of 30 days after written notice of such
failure has been sent to the Company by the Trustee specifying such default
and requiring it to be remedied and stating that such notice is a "Notice
of Default";
(d) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case or files a request or petition for
a writ of execution to initiate bankruptcy proceedings or have itself
adjudicated as bankrupt;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
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(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its creditors;
or
(v) proposes or agrees to an accord or composition in bankruptcy
between itself and its creditors; or
(e) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of the property of the Company
or any Significant Subsidiary;
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
(iv) adjudicates the Company or a Significant Subsidiary as
bankrupt or insolvent; or
(v) ratifies an accord or composition in bankruptcy between the
Company or a Significant Subsidiary and the respective creditors
thereof;
and the order or decree remains unstayed and in effect for 60 days.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of
Default described in clause (d) or (e) above) with respect to Securities of a
series at the time Outstanding shall occur and be continuing, either the Trustee
or the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by written notice may declare the principal amount of
the Securities of that series (or, if the Securities of that series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) and interest on all the Securities of
that series to be due and payable immediately. If an Event of Default described
in clause (d) or (e) above with respect to the Securities of a series at the
time Outstanding shall occur, the principal amount (or, if the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) and interest
on all the Securities of that series will automatically, and without any action
by the Trustee or any Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series may rescind and annul such acceleration if
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(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel,
(ii) all overdue installments of interest on all Securities of
such series;
(iii) the principal of (and premium, if any, on ) any Securities
of such series that have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in the Securities of such series, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate prescribed therefor in the
Securities of such series;
(b) all Events of Default, other than the nonpayment of principal of
Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.04;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the Trustee
to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities of a series or to enforce the
performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities of a series by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security of such series or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected. When a Default is waived, it
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is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal
amount of the Securities of a series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders, it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudiced to such Holders, or would involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06. LIMITATION ON SUITS. No Holder of any Securities of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or a
trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to a series of
Securities;
(ii) the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities of such Series have made written
request, and such Holder or Holders have offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee; and
(iii) the Trustee has failed to institute such proceeding, and
has not received from the Holders of a majority in aggregate principal
amount of the Outstanding Securities of such series a direction
inconsistent with such request, within 60 days after such notice,
request and offer.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities of any series held by such Holder,
on or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and
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owing (together with interest on any unpaid interest to the extent lawful) and
the amounts provided for in Section 7.06.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company, its creditors or its property and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.06.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order, at the date or dates fixed by the Trustee for the distribution
of such monies or other property, upon presentation of the several Securities of
such series in respect of which monies or other property have been collected,
and the notation thereon of the payment, if only partially paid, and upon
surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 7.06;
[If applicable: SECOND: to holders of Senior Indebtedness of the
Company to the extent required by Article 10;]
[If applicable: THIRD: to holders of Senior Subordinated Indebtedness
of the Company to the extent required by Article 10;]
FOURTH: In case the principal of the Outstanding Securities in
respect of which such monies have been collected shall not have become due,
to the payment of interest on the Securities of such series in the order of
the maturity of the installments of such interest, with interest (to the
extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the rate or yield to maturity (in the
case of Original Issue Discount Securities) borne by the Securities of such
series, such payments to be made ratably to the Persons entitled thereto,
without discrimination or preference;
FIFTH: In case the principal of the Outstanding Securities in respect
of which such monies have been collected shall have become due, by
declaration or otherwise, to the payment of the whole amount then owing and
unpaid upon the Securities of such series for principal and premium, if
any, and interest, with interest on the overdue principal and premium, if
any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the rate or yield to
maturity (in the case of Original Issue Discount Securities) borne by the
Securities of such series; and, in case such monies shall be insufficient
to pay in full the whole amount so due and
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unpaid upon the Securities of such series, then to the payment of such
principal and premium, if any, and interest, without preference or priority
of principal and premium, if any, over interest, or of interest over
principal and premium, if any, or of any installment of interest over any
other installment of interest, or of any Security of such series over any
Security of such series, ratably to the aggregate of such principal and
premium, if any, and interest; and
SIXTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the Trustee
or a suit by a Holder pursuant to Section 6.07.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this subsection does not limit the effect of subsection (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the
Trust Indenture Act.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, Officer's Certificate, or other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or
document unless requested in writing to do so by the Holders of not less
than a majority in aggregate principal amount of the Securities then
outstanding; provided, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company
or, if advanced by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions, or agreements on
the part of the Company, except as otherwise set forth herein, but the
Trustee may require of the Company full information and advice as to the
performance of the covenants, conditions and agreements contained herein
and shall be entitled in connection herewith to examine the books, records
and premises of the Company.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not
be deemed to have notice of any Default or Event of Default unless
specifically notified in writing of such event by the Company or the
Holders of not less than 25% in aggregate principal amount of the relevant
series of Securities then Outstanding; as used herein, the term "actual
knowledge" means the
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actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-
paying agent may do the same with like rights. However, the Trustee must comply
with Sections 7.09 and 7.10.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in this Indenture or in any document issued in connection with
the sale of the Securities of any series or in the Securities of any series
other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Holder notice
of the Default within 90 days after it occurs. Except in the case of a Default
in payment of principal of or interest on any Security (including payments
pursuant to the mandatory redemption provisions of such Security, if any), the
Trustee may withhold the notice if and so long as the Trustee in good faith
determines that withholding the notice is in the interests of Holders.
SECTION 7.06. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee promptly upon request from time to time the compensation for its
services as agreed to by the Trustee and the Company. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The Company
shall indemnify the Trustee against any and all loss, liability or reasonable
expense (including reasonable attorneys' fees) incurred by it in connection with
the acceptance and administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
The Company need not pay for any settlement made by the Trustee without the
Company's consent, such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
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The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01 (d) or (e) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.07. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company may,
but need not, appoint a separate Trustee for any one or more series of
Securities. The Trustee may resign with respect to one or more or all series of
Securities at any time by notifying the Company. The Holders of a majority in
principal amount of the Securities of a particular series may remove the Trustee
for such series by notifying the Trustee and may appoint a successor Trustee.
The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.09;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities of a particular series and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders of Securities
of each applicable series. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities of any applicable series may petition
any court of competent jurisdiction for the appointment of a successor Trustee
for the Securities of such series.
If the Trustee fails to comply with Section 7.09, any Holder of Securities
of any applicable series may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee for the
Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.06 shall continue for the benefit of
the retiring Trustee.
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SECTION 7.08. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.09. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.10. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. APPLICABILITY OF ARTICLE. If, pursuant to Section 2.02,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in Dollars (except as
provided pursuant to Section 2.02), then the provisions of this Article 8
relating to defeasance of Securities shall be applicable except as otherwise
specified pursuant to Section 2.02 for Securities of such series. Defeasance
provisions, if any, for Securities denominated in a Foreign Currency may be
specified pursuant to Section 2.02.
SECTION 8.02. DISCHARGE OF LIABILITY ON SECURITIES.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities of any series for cancellation (other than Securities replaced
pursuant to Article 2 and Securities for whose payment money has
theretofore been deposited in trust and
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thereafter repaid to the Company as provided in Section 8.06), or (ii) all
outstanding Securities of such series have become due and payable, whether
at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee cash in the Currency in which such Securities are denominated, U.S.
Government Obligations or a combination thereof sufficient to pay at
maturity or upon redemption all outstanding Securities of such series,
including premium and interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Article 2), and premium, if
any, and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections
8.02(b), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Notwithstanding subsection (a) above, the Company's obligations in
Sections 2.06, 2.07, 2.09, 2.12, 7.06, 8.06, 8.07, 8.08 and 12.02 shall
survive until the Securities of such series have been paid in full.
Thereafter, the Company's obligations in Sections 8.06, 8.07 and 12.02
shall survive.
SECTION 8.03. DEFEASANCE.
(a) Subject to Sections 8.03(d), 8.04 and 8.07, the Company at any
time may terminate, with respect to Securities of a particular series, (i)
all its obligations under the Securities of such series and this Indenture
with respect to the Securities of such series ("LEGAL DEFEASANCE OPTION")
or (ii) its obligations with respect to the Securities of such series under
Sections 4.02, 4.05 and 12.03, and the operation of Sections 6.01(c),
6.01(d), and 6.01(e) ("COVENANT DEFEASANCE OPTION"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
(b) If the Company exercises its legal defeasance option, payment of
the Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of
Default specified in Sections 6.01(c), 6.01(d), and 6.01(e).
(c) Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(d) Notwithstanding subsection (a) above, the Company's obligations in
Sections 2.06, 2.07, 2.09, 2.12, 7.06, 8.06, 8.07, 8.08 and 12.02 shall
survive until the Securities of the defeased series have been paid in full.
Thereafter, the Company's obligations in Section 8.06, 8.07 and 12.02 shall
survive.
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SECTION 8.04. CONDITIONS TO DEFEASANCE. The Company may exercise its legal
defeasance option or its covenant defeasance option with respect to Securities
of a particular series only if:
(1) the Company irrevocably deposits in trust with the Trustee cash in
U.S. dollars, U.S. Government Obligations or a combination thereof for the
payment of principal of, interest on and premium, if any, on the Securities
of such series to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal, premium and interest
when due on all the Securities of such series to maturity or redemption, as
the case may be;
(3) At the time the deposit is made no Default shall have occurred and
be continuing;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance
had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and
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discharge of the Securities of such series as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities of such series at a future date
in accordance with Article 3.
SECTION 8.05. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal, premium and interest on the Securities of the defeased
series. In the event the Securities of the defeased series are subordinated
pursuant to Article 10, money and securities so held in trust are not subject to
Article 10.
SECTION 8.06. REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon Order any money held by them for the
payment of principal of, premium, if any, or interest on any Securities that
remains unclaimed for two years after the date upon which such payment shall
have become due; PROVIDED, HOWEVER, that the Company shall cause to be published
at least once in a newspaper of general circulation in The City of New York or
mailed to each Holder entitled to such unclaimed funds, notice that such funds
remain unclaimed and that, after a date specified therein, which shall be a date
not less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money remaining as of such date shall be repaid to the
Company. After repayment to the Company, Holders entitled to such funds shall
look only to the Company for payment without interest thereon, as an unsecured
general creditor, and the Trustee and the Paying Agent shall have no further
liability with respect to such money.
SECTION 8.07. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.08. REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities of the defeased series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of Securities of the
defeased series because of the reinstatement of its obligations,
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the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
(a) The Company and the Trustee may enter into an Indenture or
Indentures supplemental hereto or amend the Securities without notice to or
consent of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency
herein, in any supplemental Indenture or in any Security of any
series;
(ii) to provide for the assumption of the obligations of the
Company under this Indenture upon the merger, consolidation or sale or
other disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole and certain other events
specified in Section 5.01;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(iv) to comply with any requirement of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change, which change may affect only a particular
series of Securities, that does not adversely affect the rights of any
Holder of Securities of any series in any material respect;
(vi) to add guarantees by Subsidiary guarantors with respect to
Securities of any series, or to secure the Securities pursuant to the
procedures set forth in this Indenture;
(vii) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities appertaining thereto or
to surrender any right or power herein conferred upon the Company;
(viii) in the case of any Securities appertaining thereto
subordinated pursuant to Article 10, to make any change in Article 10
that would limit or terminate the benefits available to any holder of
Senior Indebtedness (or Representatives therefor) under Article 10;
(ix) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; provided,
however, that any such addition, change or elimination not otherwise
permitted under this
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Section 9.01 shall (i) neither (A) apply to any Security of any series
created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision or (ii)
shall become effective only when there is no such Security
Outstanding;
(x) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee; and
(xi) to establish the form or terms of Securities of any series
as permitted by Section 2.02.
(b) [Insert for Subordinated or Senior Subordinated Securities -- An
amendment under this Section may not make any change that adversely affects
the rights under Article 10 of any holder of Senior Indebtedness of the
Company then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent
to such change in writing.]
(c) After an amendment under this Section becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS.
(a) The Company and the Trustee, with the written consent of the
Holders of at least a majority of the principal amount of the Outstanding
Securities of each series affected by such supplemental Indenture, may
execute supplemental Indentures adding any provisions to or changing or
eliminating any of the provisions of this Indenture or of any supplemental
Indenture or modifying the rights of the Holders of the Securities of such
series, except that no supplemental Indenture or waiver, without the
consent of each Holder affected thereby, may:
(i) reduce the principal amount of Securities of any series whose
Holders must consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for payment of
interest on any Securities;
(iii) change the Currency in which any amount due in respect of
the Securities is payable from that stated in the Security;
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(iv) reduce the principal of or any premium on or change the
Stated Maturity of any Securities or alter the redemption or
repurchase provisions with respect thereto;
(v) reduce the relative ranking of any Securities;
(vi) release any security that may have been granted in respect
of the Securities;
(vii) impair the right of any Holder to institute suit for
enforcement of any payment on or with respect to such Holder's
Securities; or
(viii) make any change in Sections 6.04, 6.07 or 9.02.
(b) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed supplemental
Indenture, but it shall be sufficient if such consent approves the
substance thereof.
(c) A supplemental Indenture under this Section may not make any
change that adversely affects the rights under Article 10 of any holder of
Senior Indebtedness of the Company then outstanding unless the holders of
such Senior Indebtedness (or any group or representative thereof authorized
to give a consent) consent to such change in writing.
(d) After a supplemental Indenture under this Section becomes
effective, the Company shall mail to Holders a notice briefly describing
such supplemental Indenture. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of
a supplemental Indenture under this Section.
(e) A supplemental Indenture which changes or eliminates any covenant
or other provision of this Indenture which has been expressly included
solely for the benefit of one or more particular series of Securities 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.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
Indenture or amendment to the Securities shall comply with the Trust Indenture
Act as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.
(a) A consent to a supplemental Indenture or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent or waiver is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation before
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the date the supplemental Indenture or waiver becomes effective. After a
supplemental Indenture or waiver becomes effective, it shall bind every
Holder. A supplemental Indentures or waiver becomes effective upon the
execution of such supplemental Indenture or waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding subsection, those Persons who
were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If a supplemental
Indenture changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURE. The Trustee shall
sign any supplemental Indenture authorized pursuant to this Article 9 if the
supplemental Indenture does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such supplemental Indenture, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.01. APPLICABILITY OF ARTICLE; AGREEMENT TO SUBORDINATE. The
provisions of this Article 10 shall be applicable to the Securities of any
series (Securities of such series referred to in this Article 10 as
"Subordinated Debt Securities") designated pursuant to Section 2.02 as
subordinated to Senior Indebtedness. Notwithstanding any other provision to the
contrary in this Indenture, the Company covenants and agrees, and each Holder by
accepting a Subordinated Debt Security covenants and agrees, that the principal
of (and premium, if any) and interest on the Indebtedness now or hereafter
evidenced by the Subordinated Debt Security and this Indenture are subordinated
in right of payment, to the extent and in the manner provided in this Article,
to the prior payment in full in cash of all existing
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and future Senior Indebtedness, and that the subordination provisions set forth
in this Article are for the benefit of, and shall be enforceable directly by,
the holders of Senior Indebtedness.
Each Holder of a Subordinated Debt Securities authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate, in the sole discretion of the Trustee, to acknowledge or effectuate
the subordination between the Holders and the holders of Senior Indebtedness as
provided in this Article and appoints the Trustee as such Holder's attorney-in-
fact for any and all such purposes, including, in the event of any voluntary or
involuntary liquidation or dissolution of the Company, whether total or partial,
or in a bankruptcy, reorganization, insolvency, receivership, dissolution,
assignment for the benefit of creditors, marshaling of assets or similar
proceeding relating to the Company or its property, the timely filing of a claim
for the unpaid balance of such Holder's Securities in the form required in said
proceeding and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
20 days before the expiration of the time to file such claim or claims, then the
Principal Agent is hereby authorized to have the right to file and is hereby
authorized to file an appropriate claim for and on behalf of the Holders;
provided, however, that any such claim filed by the Principal Agent shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder of a Subordinated Debt Security by accepting a Security
acknowledges and agrees that the subordination provision set forth in this
Article are, and are intended to be, an inducement and consideration to each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created
before or after the issuance of the Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness, and such holder of Senior
Indebtedness shall be deemed conclusively to have relied upon such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness, and such holder is made an obligee hereunder and may
enforce directly such subordination provisions.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or
distribution (whether in cash, property, debt, equity or other securities, a
combination thereof or otherwise) to creditors or equity holders of the Company
in a voluntary or involuntary liquidation or dissolution of the Company, whether
total or partial, or in bankruptcy, reorganization, insolvency, receivership,
assignment for the benefit of creditors, marshaling of assets or similar
proceeding relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of all amounts due or to become due on or in
respect of all Senior Indebtedness before Holders of Subordinated Debt
Securities shall be entitled to receive any Security Payment (as defined in
Section 10.03(a)); and
(b) until all Senior Indebtedness is paid in full in cash, any
Security Payment (as defined in Section 10.03(a)) to which Holders of a
Subordinated Debt Securities would be entitled but for this Article shall
be made to holders of Senior Indebtedness, as their interests may appear.
Upon any prepayment, payment or distribution referred to in this
Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of
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competent jurisdiction in which such proceedings are pending for the
purpose of ascertaining the identity of Persons entitled to participate in
such payment or distribution, the holders of Senior Indebtedness, the
amount thereof or payable thereon and all other facts pertinent thereto or
to this Article, and the Trustee and the Holders shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other Person
(including any Representative of holders of Senior Indebtedness) making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the identity of Persons entitled to participate in such
payment or distribution, the holders of Senior Indebtedness, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person, as a holder of Senior
Indebtedness, to participate in any payment or distribution pursuant to
this Section, the Trustee may require such Person (at the expense of the
Holders) to furnish evidence to the reasonable satisfaction of the Trustee,
acting in good faith, as to the amount of such Senior Indebtedness held by
such Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Section, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive
payment.
For purposes of this Article, a distribution may consist of cash,
securities or other property, by set-off or otherwise; PROVIDED that, for
purposes of this Article only, the words "cash, securities or other
property" shall not be deemed to include securities of the Company or any
other corporation ("REORGANIZATION SECURITIES") provided for by a plan of
reorganization or readjustment of the Company the payment of which is
subordinated, at least to the extent provided in this Article with respect
to the Subordinated Debt Securities, to the payment of all Senior
Indebtedness that may at the time be outstanding.
The consolidation or merger of the Company with or into any Person, or
the sale, assignment, transfer, lease, conveyance or other disposition of
all or substantially all of the Company's assets to any Person, upon the
terms and conditions set forth in Article 5, shall not be deemed to be
liquidation, dissolution or reorganization or similar proceeding relating
to the Company for purposes of this Section if the Person formed by or
surviving such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made, shall, as a part
of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, comply with the conditions set forth in
Article 5.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS.
(a) Upon any Senior Indebtedness becoming due and payable, whether at
the stated maturity thereof or by acceleration or otherwise, such Senior
Indebtedness shall first be irrevocably and indefeasibly paid in full in
cash, or the immediate payment thereof duly provided for in cash, before
the Company or any Person acting on behalf of the Company shall directly or
indirectly pay, prepay, redeem, retire, repurchase or otherwise acquire for
value, or make any deposit pursuant to Article 8 in respect of, or
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make any other prepayment, payment or distribution (whether in cash,
property, securities or a combination thereof or otherwise) on account of
the principal of (or premium, if any) or interest on, any Subordinated Debt
Securities (each, a "SECURITY PAYMENT").
(b) If there exists a default in payment of all or any portion of any
principal of (and premium, if any) and interest and fees, expenses, costs
and other obligations on Senior Indebtedness, and (i) such default shall
not have been cured or waived in writing or the benefits of this sentence
waived in writing by or on behalf of the holders of such Senior
Indebtedness or (ii) any judicial proceeding shall be pending with respect
to any such default, then no Security Payment shall be made.
(c) In addition, during the continuance of any event of default (other
than a default referred to in subsection (b) of this Section 10.03) with
respect to any Specified Senior Indebtedness, as such event of default is
defined therein or in the instrument under which such Specified Senior
Indebtedness is outstanding, permitting the holders of such Specified
Senior Indebtedness to accelerate the maturity thereof under the terms of
such Specified Senior Indebtedness, and upon written notice of such event
of default given by the Principal Agent to the Trustee, with a copy to the
Company (the delivery of such shall not affect the validity of the notice
to the Trustee), then, unless and until such event of default shall have
been cured or waived or shall have ceased to exist, no Security Payment
shall be made; provided, that if the holders of the Specified Senior
Indebtedness to which the default relates have not declared such Specified
Senior Indebtedness to be immediately due and payable within 179 days after
the occurrence of such default (or have declared such Specified Senior
Indebtedness to be immediately due and payable and within such period have
rescinded such declaration of acceleration), then, subject to the
provisions of Section 10.02 and 10.03(a), the Company shall resume making
any and all unpaid scheduled Security Payments. Any period during which any
Security Payment is prohibited pursuant to the immediately preceding
sentence is referred to in this Article as a "PAYMENT BLOCKAGE PERIOD."
Notwithstanding any other provisions of this Article or any other provision
of this Indenture, in no event shall a payment blockage period under this
Article extend beyond 179 days from the date on which such payment blockage
period commenced. Not more than one payment blockage period may be
commenced within any consecutive 365-day period with respect to the
Subordinated Debt Securities. For all purposes of this Article, no event of
default that existed or was continuing on the date of the commencement of
any payment blockage period with respect to the Specified Senior
Indebtedness initiating such payment blockage period shall be, or be made,
the basis for the commencement of a second payment blockage period by the
holder or holders of such Specified Senior Indebtedness at any time after
the 365-day period referred to in the previous sentence unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days.
(d) The Company covenants that it will, upon request of the Trustee,
deliver an Officers' Certificate (with copies thereof to the Representative
of each class of Senior Indebtedness) showing in reasonable detail the
Senior Indebtedness outstanding as of the date of such Officers'
Certificate and the Representative of each class of Senior Indebtedness.
The Trustee may conclusively rely thereon except to the extent that it
shall
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have received, from the Representative of any class of Senior Indebtedness,
notice in writing controverting any of the statements made therein. Not
less than 10 days prior to making any distribution in respect of Senior
Indebtedness pursuant to this Section, the Trustee shall deliver to each
Representative of any class of Senior Indebtedness copies of the most
recent Officers' Certificate filed with it by the Company pursuant to this
subsection (d).
SECTION 10.04. SECURITY PAYMENTS PERMITTED IF NO DEFAULT. Nothing
contained in this Article or elsewhere in this Indenture, or in any of the
Subordinated Debt Securities, shall prevent the Company or any Person acting on
behalf of the Company, at any time except as otherwise provided in Sections
10.02 and 10.03 from making any Security Payment.
SECTION 10.05. WHEN SECURITY PAYMENT MUST BE PAID OVER. In the event that
any Security Payment is made to the Trustee or the Holders of Subordinated Debt
Securities that, because of this Article, should not have been so made or may
not be paid over to the Holders, such Security Payment shall be held by the
Trustee or the Holders who receive such Security Payment, as the case may be,
for the benefit of, and shall forthwith be paid over or delivered to, the
holders of the Senior Indebtedness remaining unpaid or their Representatives, as
their interests may appear, to the extent necessary to irrevocably and
indefeasibly pay such Senior Indebtedness in full in cash in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
SECTION 10.06. NOTICES BY THE COMPANY. The Company shall promptly notify
the Trustee, each Paying Agent and the Principal Agent of any facts known to the
Company that would cause a Security Payment to violate this Article, but failure
to give such notice shall not affect the subordination provided in this Article
of the Subordinated Debt Securities to Senior Indebtedness. Without limiting the
foregoing, if payment of the Subordinated Debt Securities is accelerated because
of an Event of Default, the Company shall promptly notify the Principal Agent of
the acceleration.
SECTION 10.07. SUBROGATION. After all Senior Indebtedness is irrevocably
and indefeasibly paid in full in cash and until the Subordinated Debt Securities
are paid in full, Holders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to Holders have been applied to the
payment of Senior Indebtedness. A distribution made under this Article to
holders of Senior Indebtedness which otherwise would have been made to Holders
is not, as between the Company and the Holders, payment by the Company on Senior
Indebtedness.
SECTION 10.08. RELATIVE RIGHTS. This Article defines the relative rights
of Holders of Subordinated Debt Securities and holders of Senior Indebtedness.
Nothing in this Indenture shall:
(a) impair, as between the Company and the Holders of Subordinated
Debt Securities, the obligation of the Company, which is absolute and
unconditional, to pay
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the principal of (and premium, if any) and interest on the Subordinated
Debt Securities in accordance with their terms;
(b) affect the relative rights of Holders of Subordinated Debt
Securities and creditors of the Company other than holders of Senior
Indebtedness; or
(c) prevent the Trustee or any Holder of Subordinated Debt Securities
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders of Senior Indebtedness to receive
prepayment, payments and distributions otherwise payable to Holders of
Subordinated Debt Securities.
If the Company fails because of this Article to pay the principal of (or
premium, if any) or interest on a Subordinated Debt Security on the due date or
upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Indebtedness to enforce the subordination
of the Indebtedness evidenced by the Subordinated Debt Securities shall be
impaired by (a) any act or failure to act by the Company or by its failure to
comply with this Indenture, (b) any release of any collateral or any Guarantor
of the Company's obligations under the Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of the Senior
Indebtedness, (d) any settlement or compromise of any Senior Indebtedness, (e)
the unenforceability of any of the Senior Indebtedness or (f) the failure of any
holder of Senior Indebtedness to pursue claims against the Company.
SECTION 10.10. DISTRIBUTION OF NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT. The Trustee or any
Payment Agent may continue to make payments in respect of the Subordinated Debt
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payment unless, not less than three
Business Days prior to the date of any such payment, a Responsible Officer of
the Trustee receives written notice reasonably satisfactory to it that payments
in respect of the Subordinated Debt Securities may not be made under this
Article. Only the Company, a Representative (satisfactorily identified to the
Trustee) or a holder of a class of Senior Indebtedness that has no
Representative (satisfactorily identified to the Trustee) may give the notice.
Prior to the receipt of such notice, the Trustee and any Paying Agent shall be
entitled in all respects to assume that no such facts exist. In any case, the
Trustee shall have no responsibility to the holders of Senior Indebtedness for
payments made to Holders by the Company or any Paying Agent unless cash payments
are made at the direction of the Trustee after receipt of such notice referred
to above.
Neither the Trustee nor any Payment Agent shall be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
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The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have it were not Trustee.
This Section is solely for the benefit of the Trustee and any Payment
Agents and shall not limit the obligations of the Holders under Section 10.05.
SECTION 10.12. CONSENT OF HOLDERS OF SPECIFIED SENIOR INDEBTEDNESS. The
provisions of this Article (including the definitions contained in this Article
and references to this Article contained in this Indenture) shall not be
amended, waived or modified in a manner that would adversely affect the rights
of the holders of any Specified Senior Indebtedness, and no such amendment,
waiver or modification shall become effective, unless the holders of such
Specified Senior Indebtedness shall have consented in writing (in accordance
with the provisions of the agreement governing such Specified Senior
Indebtedness) to such amendment, waiver or modification.
SECTION 10.13. CONTRACTUAL SUBORDINATION. This Article 10 represents a
bona fide agreement of contractual subordination pursuant to Section 510(b) of
the United States Bankruptcy Code.
ARTICLE 11
CONVERSION OF SECURITIES
SECTION 11.01. APPLICABILITY; CONVERSION PRIVILEGE AND CONVERSION PRICE.
If pursuant to a Board Resolution with respect to Securities of any series
denominated and payable in Dollars, Securities of such series may be convertible
into Common Stock of the Company, such conversion shall be in accordance with
the terms of such Board Resolution and (except as otherwise specified as
contemplated by Section 2.02 for Securities of any series) in accordance with
this Article. Conversion provisions, if any, for Securities denominated in a
Foreign Currency or for conversion into a security other than Company Common
Stock shall be specified pursuant to Section 2.02.
Subject to and upon compliance with the provisions of this Article at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof which is U.S. $1,000 or an integral multiple of U.S. $1,000
(unless otherwise specified in a Board Resolution or supplemental indenture with
respect to the Securities of the relevant series), may be converted at the
principal amount thereof, or of such portion thereof, into fully paid and non-
assessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100 of a share) of the Company, at the Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall expire at the close of business on the date specified for Securities of
such series. In case a Security or portion thereof is called for redemption,
such conversion right in respect of the Security or portion so called shall
expire at the close of business on the redemption date, unless the Company
defaults in making the payment due upon redemption.
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The price at which Common Stock shall be delivered upon conversion (the
"Conversion Price") shall initially be the price per share of Common Stock at
which the Securities of the relevant series are convertible as set forth in any
Board Resolution with respect to such series (or any supplemental indenture with
respect thereto). The Conversion Price shall be adjusted in certain instances as
provided in Section 11.04.
SECTION 11.02. EXERCISE OF CONVERSION PRIVILEGE. In order to exercise the
conversion privilege, the Holder of any Security to be converted shall surrender
such Security, duly endorsed or assigned to the Company or in blank, at any
office or agency of the Company maintained for that purpose pursuant to Section
4.04, accompanied by written notice to the Company (which shall be substantially
in the form set forth in the form of Security) at such office or agency or, if
applicable, by notice in accordance with specified procedures that the Holder
elects to convert such Security or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted. Securities
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of Securities
or portions thereof which have been called for redemption on a redemption date
within such period) be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Securities
being surrendered for conversion; PROVIDED, HOWEVER, that a Security surrendered
for conversion on an Interest Payment Date need not be accompanied by a payment,
and interest on the principal amount of the Securities being converted will be
paid on such Interest Payment Date, to the Holder of such Security on the
immediately preceding Record Date. Except as provided in the Securities, no
payment or adjustment shall be made upon any conversion on account of any
interest accrued on the Securities surrendered for conversion or on account of
any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to received the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the date of conversion, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 11.03.
All Securities converted in accordance with the provisions of this Article
11 are, and shall be deemed to have been, transferred to or for the account of
the Company.
In the case of any Security which is converted in part only, upon such
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
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SECTION 11.03. FRACTIONS OF SHARES. No fractional shares of Common Stock
or other such securities shall be issued upon conversion of Securities. If more
than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the closing price per share of Common Stock at the
close of business on the day prior to the day of conversion on the New York
Stock Exchange or, if the Common Stock is not listed or admitted to trading on
such exchange, on the principal (as determined by the Company's Board of
Directors) U.S. securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any U.S.
securities exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any U.S. securities exchange or quoted on such National
Market System, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for that purpose.
SECTION 11.04. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price with
respect to any Security which is convertible into Common Stock shall be subject
to adjustment from time to time as follows:
(a) If the Company shall pay or make a dividend or other distribution
on any class of equity capital of the Company which is payable in Common
Stock, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction of which (i) the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and (ii) the denominator shall be the
sum of such number of shares referred to in the preceding clause and the
total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
(b) If the Company shall issue rights or warrants to all holders of
its Common Stock entitling them to subscribe for or purchase Common Stock
at a price per share less than the current market price per share of Common
Stock (determined as provided in paragraph 11.04(d)) on the date fixed for
the determination of stockholders entitled to receive such rights or
warrants, the Conversion Price in effect at the opening of business on the
day following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction of which (i) the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase
would purchase at such current market price and (ii) the denominator shall
be the number of shares of Common stock outstanding at the close of
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business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination.
(c) If outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which the
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall be
consolidated into a smaller number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be,
to become effective immediately after the opening of business on the day
following the day upon which such subdivision or consolidation becomes
effective.
(d) For the purpose of any computation under Section 11.03 and
11.04(b), the current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the five
consecutive trading days selected by the Company commencing not more than
20 trading days before, and ending not later than, the earlier of the day
in question and the day before the "ex" date with respect to the issuance
requiring such computation. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if
the Common Stock is not listed or admitted to trading on such exchange, on
the principal (as determined by the Company's Board of Directors) U.S.
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any U.S. securities
exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any U.S. securities exchange or quoted on such
National Market System, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose. For
purposes of this paragraph, the term "ex date," when used with respect to
any issuance means the first date on which the Common Stock trades regular
way on such exchange or in such market without the right to receive such
issuance or distribution.
(e) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 11.04(a) through 11.04(c), as it
considers to be advisable in order that any event treated for the United
States federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients. The Company shall have the power to
resolve any ambiguity or correct any error in this paragraph 11.04(e) and
its actions in so doing shall be final and conclusive.
(f) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least one
percent in such price; PROVIDED, HOWEVER, that any adjustments which by
reason of this paragraph
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11.04(f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Article shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be.
(g) For purposes of this Section, each Holder of Securities shall be
deemed to have failed to exercise any right to elect the kind or amount of
securities receivable upon the payment of any such dividend, subdivision,
consolidation or reclassification (PROVIDED THAT if the kind or amount of
securities receivable upon such dividend, subdivision, consolidation or
reclassification for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing
shares).
SECTION 11.05. NOTICE OF ADJUSTMENT OF CONVERSION PRICE. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 11.04 and shall prepare a certificate signed by an
Officer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and at each
office or agency maintained for the purpose of conversion of Securities
pursuant to Section 4.03; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Security Register.
SECTION 11.06. NOTICE OF CERTAIN CORPORATION ACTION. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of equity capital of any class or of any other rights; or
(c) the Company or any Subsidiary shall commence a tender offer or
other offer to purchase any of its Common Stock; or
(d) of any reclassification of the Common Stock of the Company (other
than a subdivision or consolidation of its outstanding Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(e) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company,
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then the Company shall cause to be filed at the Corporate Trust Office of
the Trustee and at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 4.05, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record, effective or
expiration date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, (ii)
the date on which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for
securities, cash or other property deliverable upon such reclassification
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up, or (iii) the date on which such tender offer or other offer to purchase
commenced, the date on which such tender offer or other offer to purchase
is scheduled to expire unless extended, the consideration offered and the
other material terms thereof (or the material terms of any amendment
thereto). Neither the failure to give any such notice nor any defect
therein shall affect the legality or validity of any action described in
clauses (a) through (e) of this Section 11.06.
SECTION 11.07. COMPANY TO RESERVE COMMON SHARES. The Company shall at all
times reserve and keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the number of its duly authorized shares of Common
Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 11.08. TAXES ON CONVERSION. The Company will pay any and all
taxes that may be payable in respect of the issue or delivery of Common Stock on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.
SECTION 11.09. COVENANT AS TO COMMON STOCK. The Company covenants that
all Common Stock which may be issued upon conversion of Securities will upon
issue be fully paid and non-assessable and, except as provided in Section 11.08,
the Company will pay all taxes, liens and charges with respect to the issue
thereof.
SECTION 11.10. COMPANY TO RECEIVE CONVERTED SECURITIES. All Securities
surrendered for conversion pursuant to Section 11.02 shall be delivered to the
Company.
SECTION 11.11. PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF
ASSETS. In case of any consolidation of the Company with, or merger of the
Company into, any other corporation, any merger of another corporation into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of
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outstanding Common Stock of the Company) or any sale or transfer of all or
substantially all of the assets of the Company (treating the Company and its
Subsidiaries as a single consolidated entity and treating any sale by a
Subsidiary as a sale by the Company for such purpose), the corporation formed by
such consolidation or resulting from such merger or which acquires such assets,
as the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security shall be convertible as
specified in Section 11.01, to convert such Security only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming such
holder of Common Stock of the Company (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("constituent
Person"), or an Affiliate of a constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
(PROVIDED THAT if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by others than a
constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then, for the
purpose of this Section, the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The Trustee shall
not be under any responsibility to determine the correctness of any provision
contained in such supplemental indenture relating to either the kind or amount
of shares, other securities, cash or property receivable by Holders upon the
conversion of their Securities after any such consolidation, merger, sale or
transfer. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
SECTION 11.12. RESPONSIBILITY OF TRUSTEE AND CONVERSION AGENT. Neither the
Trustee nor any agent appointed to effect conversions shall at any time be under
any duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any such
conversion agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Stock or of any securities or property which
may at any time be issued or delivered upon the conversion of any Security; and
neither the Trustee nor any such conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any Common Stock or stock
certificates or other securities or property or to make any cash payment upon
the delivery of any Security for the purpose of conversion or to comply with any
of the covenants contained in this Article.
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ARTICLE 12
HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY
SECTION 12.01 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS. Every Holder
of Securities, by receiving and holding the same, agrees with the Company, the
Subsidiary Guarantors, if any, the Security Registrar and the Trustee that none
of the Company, the Subsidiary Guarantors, the Security Registrar or the
Trustee, or any agent of either of them, shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with TIA Section 312, regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 12.02 REPORTS BY TRUSTEE. Within 60 days after ___________ of
each year commencing with _________, 1998, the Trustee shall transmit by mail to
the Holders, as their names and addresses appear in the Security Register, a
brief report dated as of such _________ in accordance with and to the extent
required under TIA Section 313(a). The Trustee shall also comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders of
Securities, shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
SECTION 12.03 REPORTS BY COMPANY. The Company shall:
(a) file with the Trustee, and provide to each Holder, without cost to
such Holder, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
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(c) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (a) and (b) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee, to the extent
required by the TIA or this Indenture, (i) an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Indenture (including any
covenant, compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 13.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of,
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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, and may
state that it is so based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows that the certificate of
opinion or representations with respect to such matters is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 13.03. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage of Holders of Securities of a particular series may be
embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Holders of Securities
of a particular series in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are received by the
Trustee and, where it is hereby expressly required, by the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 7.01 and 7.02)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the
Trustee deems sufficient, including the execution of such instrument or
writing without more.
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(c) The ownership, principal amount and serial numbers of Securities
of any series held by any Person, and the date of holding the same, shall
be proved by the Security Register.
(d) If the Company shall solicit from the Holders of Securities of any
series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to
Board Resolution, fix in advance a record date for the determination of
Holders of Registered Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall
be a date not earlier than the date 30 days prior to the first solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record of
Registered Securities at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities of any series have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities of any series shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Security of any series shall bind
every future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon, whether or not notation
of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any different part of such principal
amount.
SECTION 13.04. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the Trust Indenture Act, the
required provision shall control. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 13.05. NOTICES. Any notice or communication shall be in writing
and delivered in person, or sent by registered or certified mail, by air courier
guaranteeing overnight delivery or by fax (promptly confirmed by telephone) and
addressed as follows:
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if to the Company:
Cross Timbers Oil Company
810 Houston Street
Suite 2000
Fort Worth, Texas 76102
Phone: (817) 870-2800
Fax: (817) 882-7278
if to the Trustee:
___________________________
___________________________
Attention:_________________
Phone:_____________________
Fax:_______________________
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication sent to a Registered Holder shall be sent to
the Registered Holder at the Holder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so sent within the
time prescribed.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
Failure to send a notice or communication to a Holder or any defect in it
shall not effect its sufficiency with respect to other Holders. If a notice or
communication is given in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 13.06. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee
may make reasonable rules for action by or a meeting of Holders. The Registrar
and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08. LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
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SECTION 13.09. GOVERNING LAW. This Indenture and the Securities shall be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 13.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 13.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture. This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 13.13. TABLE OF CONTENTS; HEADINGS. The table of contents, cross-
reference sheet and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
69
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first above written.
THE COMPANY:
CROSS TIMBERS OIL COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TRUSTEE:
--------------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
70
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
310 (a)(1).......................................................... 7.09
(a)(2).......................................................... 7.09
(a)(3).......................................................... N.A.
(a)(4).......................................................... N.A.
(b)............................................................. 7.09
(c)............................................................. N.A.
311 (a)............................................................. 7.10
(b)............................................................. 7.10
(c)............................................................. N.A.
312 (a)...................................................... 2.07; 12.01
(b)..................................................... 12.01; 13.06
(c)..................................................... 12.01; 13.06
313 (a)............................................................ 12.02
(b)(1).......................................................... N.A.
(b)(2)......................................................... 12.02
(c)..................................................... 12.02; 12.03
(d)............................................................ 12.02
314 (a)...................................................... 4.07; 12.03
(b)............................................................. N.A.
(c)(1)......................................................... 13.01
(c)(2)......................................................... 13.01
(c)(3).......................................................... N.A.
(d)............................................................. N.A.
(e)............................................................ 13.01
(f)............................................................. 4.08
315 (a)............................................................. 7.01
(b)............................................................. 7.05
(c)............................................................. 7.01
(d)............................................................. 7.01
(e)............................................................. 6.11
316 (a)(last sentence).............................................. 1.01
(a)(1)(A)....................................................... 6.05
(a)(1)(B)....................................................... 6.04
(a)(2).......................................................... N.A.
(b)............................................................. 6.07
317 (a)(1).......................................................... 6.08
(a)(2).......................................................... 6.09
(b)............................................................. 2.06
318 (a)............................................................ 13.04
N.A. Means Not Applicable
- --------------------------------------------------------------------------------
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
<PAGE>
EXHIBIT 5.1
April 8, 1998
Cross Timbers Oil Company
810 Houston Street, Suite 2000
Fort Worth, Texas 76102
Re: Registration Statement on Form S-3
Gentlemen:
This firm has acted as counsel to Cross Timbers Oil Company, a Delaware
corporation (the "Company"), in connection with the filing of a registration
statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, for the
registration of the sale from time to time (A) by the Company of up to
$390,000,000 aggregate amount of (i) debt securities of the Company (the "Debt
Securities"), (ii) preferred stock, par value $0.01 per share, of the Company
(the "Preferred Stock"), (iii) common stock, par value $0.01 per share, of the
Company (the "Common Stock") and (iv) warrants of the Company to purchase Debt
Securities, Preferred Stock or Common Stock (the "Warrants") and (B) by certain
selling stockholders of the Company to be named in the Registration Statement of
up to $10,000,000 of Common Stock.
In connection with this opinion, we have made the following assumptions:
(i) all documents submitted to or reviewed by us, including all amendments and
supplements thereto, are accurate and complete and if not originals are true and
correct copies of the originals; (ii) the signatures on each of such documents
by the parties thereto are genuine; (iii) each individual who signed such
documents had the legal capacity to do so; and (iv) all persons who signed such
documents on behalf of a corporation were duly authorized to do so. We have
assumed that there are no amendments, modifications or supplements to such
documents other than those amendments, modifications and supplements that are
known to us.
Based on the foregoing, and subject to the limitations and qualifications
set forth herein, we are of the opinion that:
1. The Company was incorporated, exists and is in good standing under the
laws of the State of Delaware.
2. Assuming that any indenture, any Debt Securities and any supplemental
indenture to be entered into in connection with the issuance of such Debt
Securities have been duly authorized, when (i) an indenture and any applicable
supplemental indenture relating to the Debt Securities have been duly executed
and delivered, (ii) the terms of the Debt Securities have been duly established
in accordance with the applicable indenture and the applicable supplemental
indenture relating to
<PAGE>
Cross Timbers Oil Company
April 8, 1998
Page 2
such Debt Securities so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company and (iii)
the Debt Securities have been duly executed and authenticated in accordance with
the applicable indenture and the applicable supplemental indenture relating to
such Debt Securities and paid for, duly issued and delivered by the Company in
the manner contemplated in the Registration Statement and any prospectus
supplement relating thereto, then the Debt Securities will constitute valid and
binding obligations of the Company, enforceable in accordance with their terms,
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereinafter in effect relating to or affecting the enforcement of
creditor's rights generally and (b) the availability of equitable remedies may
be limited by equitable principles of general applicability (regardless of
whether considered in a proceeding at law or in equity).
3. When all necessary corporate action on the part of the Company has been
taken to authorize the issuance and sale of the shares of the class of
currently outstanding Common Stock proposed to be sold by the Company, or upon
designation of the relative rights, preferences and limitations of any other
class or series of Common Stock by the Board of Directors of the Company and the
proper filing with the Secretary of State of the State of Delaware of a
Statement of Designations, Preferences and Rights relating to such class or
series of Common Stock, all necessary corporate action on the part of the
Company will have been taken to authorize the issuance and sale of such class or
series of Common Stock proposed to be sold by the Company, and when such shares
of Common Stock are paid for, issued and delivered in accordance with the
applicable underwriting or other agreement, then such shares of Common Stock
(including any shares of Common Stock issuable upon (i) conversion or exchange
of any Debt Securities that are convertible or exchangeable into Common Stock,
(ii) conversion or exchange of any shares of Preferred Stock that are
convertible or exchangeable into Common Stock or (iii) exercise of any Warrants
for Common Stock) will be validly issued, fully paid and non-assessable.
4. Upon designation of the relative rights, preferences and limitations of
any class or series of Preferred Stock by the Board of Directors of the Company
and the proper filing with the Secretary of State of the State of Delaware of a
Statement of Designations, Preferences and Rights relating to such class or
series of Preferred Stock, all necessary corporate action on the part of the
Company will have been taken to authorize the issuance and sale of such class or
series of Preferred Stock proposed to be sold by the Company, and when such
shares of Preferred Stock are paid for, issued and delivered in accordance with
the applicable underwriting or other agreement, then such shares of Preferred
Stock (including any shares of Preferred Stock issuable upon exercise of any
Warrants for Preferred Stock) will be validly issued, fully paid and non-
assessable.
5. Assuming that a warrant agreement relating to the Warrants, (the
"Warrant Agreement") has been duly authorized, when (i) the Warrant Agreement
has been duly executed and delivered, (ii) the terms of the Warrants and of
their issuance and sale have been duly established in conformity with the
Warrant Agreement relating to such Warrants so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or
<PAGE>
Cross Timbers Oil Company
April 8, 1998
Page 3
governmental or regulatory body having jurisdiction over the Company and (iii)
the Warrants have been duly executed and countersigned in accordance with the
Warrant Agreement relating to such Warrants, and issued and sold in the form and
in the manner contemplated in the Registration Statement and any prospectus
supplement relating thereto, then such Warrants will constitute valid and
binding obligations of the Company, enforceable in accordance with their terms,
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereinafter in effect relating to or affecting creditors' rights
generally and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether considered
in a proceeding at law or in equity).
This opinion is further limited and qualified in all respects as follows:
This opinion is specifically limited to matters of the existing laws of the
United States of America and the General Corporation Law of the State of
Delaware. We express no opinion as to the applicability of the laws of any
other particular jurisdiction to the transactions described in this opinion.
This opinion is limited to the specific opinions expressly stated herein,
and no other opinion is implied or may be inferred beyond the specific opinions
expressly stated herein.
This opinion is intended solely for your benefit. It is not to be quoted
in whole or in part, disclosed, made available to or relied upon by any other
person, firm or entity without our express prior written consent.
This opinion is based upon our knowledge of the law and facts as of the
date hereof. We assume no duty to update or supplement this opinion to reflect
any facts or circumstances that may hereafter come to our attention or to
reflect any changes in any law that may hereafter occur or become effective.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the heading
"Validity of Securities" in the Prospectus constituting a part of such
Registration Statement.
Respectfully submitted,
KELLY, HART & HALLMAN
(a professional corporation)
<PAGE>
EXHIBIT 23.1
INDEPENDENT PUBLIC ACCOUNTANTS' CONSENT
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of Cross Timbers Oil
Company of our report dated March 18, 1998, included in Cross Timbers Oil
Company's Annual Report on Form 10-K for the year ended December 31, 1997, and
to all references to our firm included in this registration statement.
Arthur Andersen LLP
Fort Worth, Texas
April 8, 1998
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF MILLER AND LENTS, LTD. APPEARS HERE]
April 8, 1998
Cross Timbers Oil Company
810 Houston Street, Suite 2000
Fort Worth, TX 76102
Re: Securities and Exchange Commission Form S-3 Registration Statement, No.
333-46909
Gentlemen:
The firm of Miller and Lents, Ltd., consents to the incorporation of its
estimated Proved Reserves, Future Net Revenues, and Present Values of Future
Net Revenues in the Cross Timbers Oil Company Form S-3 Registration Statement,
No. 333-46909, and to reference to our Firm in such registration statement.
Miller and Lents, Ltd. has no interests in Cross Timbers Oil Company or any
of its affiliated companies or subsidiaries and is not to receive any such
interest as payment for such reports and has no director, officer, or
employee, or otherwise, connected with Cross Timbers Oil Company. We are not
employed by Cross Timbers Oil Company on a contingent basis.
Yours very truly,
Miller and Lents, Ltd.
/s/ James C. Pearson
By: _________________________________
James C. Pearson
President
