<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1997
REGISTRATION NO. 333-20483
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
MESA INC.
MESA OPERATING CO.
(Exact name of registrant as specified in its charter)
TEXAS DELAWARE
(State or other jurisdiction of incorporation or organization)
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
(972) 444-9001
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
75-2394500 75-2516853
(I.R.S. Employer Identification No.)
STEPHEN K. GARDNER
1400 WILLIAMS SQUARE WEST
5205 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
(972) 444-9001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
Copy to:
CARLOS A. FIERRO
BAKER & BOTTS, L.L.P.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 953-6818
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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. [ ]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED FEBRUARY 5, 1997
PROSPECTUS
$500,000,000
MESA
DEBT SECURITIES
COMMON STOCK
Mesa Operating Co. ("MOC") may offer from time to time unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(collectively, the "Debt Securities"). The Debt Securities will be guaranteed on
an unsecured basis by MESA Inc. (the "Company" and together with MOC, the
"Issuers"), of which MOC is a wholly owned subsidiary. The Company may also
offer and sell from time to time shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company. The aggregate initial offering price
of the Debt Securities and the Common Stock to be offered hereby (the
"Securities") will not exceed $500,000,000 or, if applicable, the equivalent
thereof in any other currency or currency unit. The Securities may be offered as
separate series in amounts, at prices and on terms to be determined in light of
market conditions at the time of sale and set forth in a Prospectus Supplement.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any terms
for optional or mandatory redemption, which may include redemption at the option
of holders upon the occurrence of certain events, or payment of additional
amounts or any sinking fund provisions, any initial public offering price, the
net proceeds to MOC and any other specific terms in connection with the offering
and sale of such series will be set forth in a Prospectus Supplement.
The Securities may be sold directly by the Issuers to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of the Issuers or any underwriters are
involved in the sale of any Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Issuers from such sale also will be set forth in a Prospectus
Supplement.
The Common Stock is listed on the New York Stock Exchange under the Symbol
MXP. Any Common Stock offered will be listed, subject to notice of issuance, on
such exchange.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN INVESTMENT
IN THE SECURITIES.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
---------------------
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.
---------------------
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 3
NO DEALERS, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING COVERED
BY THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE ISSUERS. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL, OR A SOLICITATION OF ANY
OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR
TO ANY PERSON WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission, 450
Fifth Street, NW, Judiciary Plaza, Washington, D.C. 20549; and at the following
regional offices of the Commission: 7 World Trade Center, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661 and through the Commission's Internet site at www.sec.gov. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
at prescribed rates. The Company's Common Stock and its Series A Preferred Stock
are listed on the New York Stock Exchange and such reports, proxy statements and
other information may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Issuers with the Commission under the Securities Act
with respect to the securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement, and reference is made to the
Registration Statement for further information with respect to the Issuers and
the securities offered hereby. Statements contained herein concerning the
provisions of any contract, agreement or any other document or exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete; with respect to each such contract, agreement or document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus, and subject in each case to
information contained in this Prospectus, are the following documents filed by
the Company with the Commission pursuant to the Exchange Act: (1) the Company's
Annual Report on Form 10-K/A for the fiscal year ended December 31, 1995, filed
January 27, 1997 (2) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; (3) the
Company's Current Reports on Form 8-K filed March 1, 1996, April 29, 1996, June
26, 1996 and September 30, 1996; (4) the description of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A (File No.
1-10874), dated September 27, 1991; and (5) the description of the Company's
Series A Preferred Stock contained in the Company's Registration Statement on
Form 8-A (File No. 1-10874), filed May 20, 1996.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing of such document. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
2
<PAGE> 4
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statements as modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all of the documents incorporated by
reference herein (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents). Such request should
be directed to Investor Relations, MESA Inc., 1400 Williams Square West, 5205
North O'Connor Boulevard, Irving, Texas 75039 (telephone (972) 444-9001).
THE ISSUERS
The Company is a holding company and conducts its operations through its
wholly-owned subsidiary, MOC. The Issuers maintain their principal executive
offices at 1400 Williams Square West, 5205 North O'Connor Boulevard, Irving,
Texas 75039, where their telephone number is (972) 444-9001. Unless the context
otherwise requires, the term "Mesa" means the Company and its subsidiaries taken
as a whole and includes the Company's predecessors.
Mesa is one of the largest independent oil and gas companies in the United
States and considers itself one of the most efficient operators of domestic
natural gas properties.
RISK FACTORS
Prospective Investors should consider carefully the following factors
together with the information and financial data set forth elsewhere in this
Prospectus and any accompanying Prospectus Supplement prior to making an
investment decision.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes and any Prospectus Supplement may include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements other than statements of
historical fact included in this Prospectus or in any Prospectus Supplement,
including without limitation those regarding Mesa's financial position and
liquidity, the amount of and its ability to make debt service payments and
payments of dividends, its strategic plans, cost reduction efforts and other
matters, are forward-looking statements. Although Mesa believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Important
factors that could cause actual results to differ materially from Mesa's
expectations are disclosed in this Prospectus and may be disclosed in any
Prospectus Supplement, including without limitation in conjunction with the
forward-looking statements included in this Prospectus or in any Prospectus
Supplement. All subsequent written and oral forward-looking statements
attributable to Mesa or persons acting on its behalf are expressly qualified in
their entirety by the Cautionary Statements.
SUBSTANTIAL INDEBTEDNESS
Mesa had long term indebtedness (including current maturities) of
approximately $839.7 million and stockholders' equity of approximately $249.2
million at September 30, 1996. Mesa's level of indebtedness will have several
important effects on its future operations, including that (i) a portion of
Mesa's cash flow from operations will be dedicated to the payment of interest on
its indebtedness and will not be available for other purposes, (ii) the
covenants contained in Mesa's bank credit facility (the "Credit Facility") and
in the indentures governing Mesa's 10 5/8% Senior Subordinated Notes due 2006
(the "Senior Subordinated Notes") and Mesa's 11 5/8% Senior Subordinated
Discount Notes due 2006 (the "Discount Notes" and, together with the Senior
Subordinated Notes, the "Notes") require Mesa to meet certain financial tests
and other restrictions, will limit its ability to borrow additional funds, to
grant liens and to dispose of assets and will
3
<PAGE> 5
affect Mesa's flexibility in planning for and reacting to changes in its
business, including possible acquisition activities, and (iii) Mesa's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes may be
impaired. At December 31, 1996, Mesa had outstanding $325 million in Senior
Subordinated Notes, $159 million in Discount Notes and $319 million under the
Credit Facility (with $195 million of additional borrowing capacity, net of
letter of credit obligations).
Mesa's ability to meet its debt service obligations and to reduce its total
indebtedness will be dependent upon Mesa's future performance, which will be
subject to oil and gas prices, Mesa's level of production and to general
economic conditions and financial, business and other factors affecting the
operations of Mesa, many of which are beyond its control. There can be no
assurance that Mesa's future performance will not be adversely affected by such
changes in oil and gas prices and/or production nor by such economic conditions
and/or financial, business and other factors.
HISTORY OF LOSSES
Mesa had a net loss of $67.3 million for the nine months ended September
30, 1996 and had net losses of $79.2 million, $89.2 million, $102.4 million,
$83.4 million and $57.6 million for the years ended December 31, 1991, 1992,
1993, 1994 and 1995, respectively. Mesa was profitable in the first two fiscal
quarters of 1996, with net income of $1.1 million and $4.5 million in the first
and second quarters of 1996, respectively. In the third quarter of 1996, Mesa
had a net loss of $72.9 million, which included an extraordinary loss totaling
approximately $59.4 million related to the early extinguishment of long-term
debt associated with the completion of a recapitalization of its balance sheet
(the "Recapitalization"). During 1997, and assuming no change in its
capitalization, Mesa's annual interest expense is expected to be approximately
$85 million, with approximately $65 million payable in cash, which amounts are
expected to vary in subsequent years based on outstanding borrowings and
interest rates under the Credit Facility and the accretion of interest on the
Discount Notes. The 8% dividend on the Company's Series A 8% Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") and the Company's
Series B Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"
and, together with the Series A Preferred Stock, the "Preferred Stock") will be
paid in kind (with additional shares of Preferred Stock) rather than in cash
until at least September 2000. Mesa may continue to incur net losses and, to the
extent that natural gas prices are low, such losses may be substantial. See
"--Volatility of Natural Gas and NGL Prices."
CONTROL BY SIGNIFICANT SHAREHOLDER
DNR-MESA Holdings L.P., a Texas limited partnership ("DNR"), whose sole
general partner is Rainwater Inc., a Texas corporation owned by Richard E.
Rainwater, owned approximately 61.2 million shares of Series B Preferred Stock,
which represented approximately 32.9% of Mesa's fully diluted common shares
(excluding outstanding stock options) as of December 31, 1996. Additionally, DNR
has special voting rights granted to it as holder of the Series B Preferred
Stock which allows it to elect a majority of the directors on Mesa's board.
Accordingly, DNR's board representatives have significant power and authority
over the management and affairs of Mesa and, consequently, DNR has significant
control over Mesa.
VOLATILITY OF NATURAL GAS AND NGL PRICES
Revenues generated from Mesa's operations are highly dependent upon the
sales prices of, and demand for, natural gas and natural gas liquids ("NGLs").
Historically, the markets for natural gas and NGLs have been volatile and are
likely to continue to be volatile in the future. Prices for natural gas and NGLs
are subject to wide fluctuation in response to market uncertainty, changes in
supply and demand and a variety of additional factors, all of which are beyond
the control of Mesa. These factors include domestic and foreign political
conditions, the overall level of supply of and demand for oil, natural gas and
NGLs, the price of imports of oil and natural gas, weather conditions, the price
and availability of alternative fuels and overall economic conditions. Mesa's
future financial condition and results of operations will be dependent, in part,
4
<PAGE> 6
upon the prices received for Mesa's natural gas and NGL production, as well as
the costs of acquiring, finding, developing and producing reserves.
As of December 31, 1995, approximately 65% of Mesa's proved reserves,
calculated on an energy-equivalent basis, were natural gas and substantially all
of its other reserves were NGLs. Substantially all of Mesa's sales of natural
gas and NGLs are made in the spot market, or pursuant to contracts based on spot
market prices, and not pursuant to long term, fixed price contracts. Any
significant decline in prices for natural gas and NGLs could have a material
adverse effect on Mesa'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, Mesa may not be able to generate sufficient cash flows from
operations to meet its obligations and make planned capital expenditures.
The availability of a ready market for Mesa's natural gas and NGL
production also depends on a number of factors, including the demand for and
supply of natural gas and NGLs and the proximity of reserves to, and the
capacity of, oil and gas gathering systems, pipelines or trucking and terminal
facilities.
USE AND RISKS OF HEDGING TRANSACTIONS AND SPECULATIVE INVESTMENTS
In order to manage its exposure to price risks in the marketing of its oil
and natural gas, Mesa has in the past and may in the future enter into oil and
natural gas futures contracts on the New York Mercantile Exchange ("NYMEX"),
fixed price delivery contracts and financial swaps as hedging devices. While
intended to reduce the effects of volatility of the price of oil and natural
gas, such transactions may limit potential gains by Mesa if oil and natural gas
prices were to rise substantially over the price established by the hedge. In
addition, such transactions may expose Mesa to the risk of financial loss in
certain circumstances, including instances in which (i) production is less than
expected, (ii) there is a widening of price differentials between delivery
points for Mesa's production and Henry Hub (in the case of NYMEX futures
contracts) or delivery points required by fixed price delivery contracts to the
extent they differ from those of Mesa's production or to the extent Mesa has not
otherwise fixed such price differential, (iii) Mesa's customers or the counter
parties to its futures contracts fail to purchase or deliver the contracted
quantities of oil or natural gas or (iv) a sudden, unexpected event materially
impacts oil or natural gas prices. Mesa also invests from time to time in oil
and gas or other futures contracts which are not intended to be hedges of its
oil and gas production. However, such speculative investments in energy futures
contracts, which in prior periods have been profitable, are expected to be
limited in the future.
RESERVES AND FUTURE NET CASH FLOWS
Information relating to Mesa's proved oil and gas reserves is based upon
engineering estimates. Reserve engineering is a subjective process of estimating
the recovery from underground accumulations of oil and natural gas that cannot
be measured in an exact manner, and the accuracy of any reserve estimate is a
function of the quality of available data and of engineering and geological
interpretation and judgment. Estimates of economically recoverable oil and 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
regulations by governmental agencies and assumptions concerning future oil and
gas prices, future operating costs, severance and excise taxes, development
costs and workover and remedial costs, all of which may in fact vary
considerably from actual results. Because all reserve estimates are to some
degree speculative, the quantities of oil and natural gas that are ultimately
recovered, production and operation costs, the amount and timing of future
development expenditures and future oil and natural gas sales prices may all
vary from those assumed in these estimates and such variances may be material.
In addition, different reserve engineers may make different estimates of reserve
quantities and cash flows based upon the same available data.
The present values of estimated future net cash flows should not be
construed as the current market value of the estimated proved oil and gas
reserves attributable to Mesa's properties. In accordance with applicable
requirements of the Commission, the estimated discounted future net cash flows
from proved reserves are generally based on prices and costs as of the date of
the estimate, whereas actual future prices and costs may
5
<PAGE> 7
be materially higher or lower. Actual future net cash flows also will be
affected by factors such as the amount and timing of actual production, supply
and demand for oil and gas, curtailments or increases in consumption by gas
purchasers and changes in governmental regulations or taxation. Mesa's producing
properties in the Hugoton field and the West Panhandle field are subject to
production limitations imposed by state regulatory authorities, by contracts or
both, and any future limitation on production would affect the expected decline
in reserves. The timing of actual future net cash flows from proved reserves,
and thus their actual present value, will be affected by the timing of both the
production and the incurrence of expenses in connection with development and
production of oil and gas properties. In addition, the 10% discount factor,
which is required by the Commission to be used to calculate discounted future
net cash flows for reporting purposes, is not necessarily the most appropriate
discount factor based on interest rates in effect from time to time and risks
associated with Mesa's business or the oil and gas industry in general.
Estimates of Mesa's oil and gas reserves include revisions of certain
reserve estimates attributable to proved properties included in the preceding
year's estimates. Such revisions reflect additional information from subsequent
activities, production history of the properties involved and any adjustments in
the projected economic life of such properties resulting from changes in product
prices. In addition, the upward revisions at year end 1994 reflect a change by
Mesa to the use of reserve estimates prepared by Mesa's internal reserve
engineers instead of estimates prepared by an independent petroleum engineering
firm. Any downward revisions in the future could adversely affect Mesa's
financial condition, borrowing base under the Credit Facility, future prospects
and the market value of its securities.
REPLACEMENT OF RESERVES
Mesa's future performance depends in part upon its ability to acquire, find
and develop additional oil and gas reserves that are economically recoverable.
Without successful acquisition, development or exploration activities, Mesa's
reserves will decline. No assurances can be given that Mesa will be able to
acquire or find and develop additional reserves on an economic basis.
Mesa's business is capital intensive and, to maintain its asset base of
proved oil and gas reserves, a significant amount of cash flow from operations
must be reinvested in property acquisitions, development or exploration
activities. To the extent cash flow from operations is reduced and external
sources of capital become limited or unavailable, Mesa's ability to make the
necessary capital investments to maintain or expand its asset base would be
impaired. Without such investment, Mesa's oil and gas reserves would decline.
In recent years, the majority of Mesa's capital expenditures have been
dedicated to developing and upgrading its existing long lived reserve base
through infill drilling of its Hugoton reserves, additions to its compression
and gathering system and pipeline interconnects, and the construction and
expansion of gas processing plants. Relatively modest expenditures have been
made to explore for, develop or acquire new reserve additions. In order to
increase reserves and production, Mesa must continue its development and
exploration drilling program or undertake other replacement activities. Mesa's
strategy includes increasing its reserve base through acquisitions and
exploitation of producing properties and continued exploitation of its existing
properties. The successful acquisition of producing properties requires an
assessment of recoverable reserves, future oil and gas prices and operating
costs, potential environmental and other liabilities and other factors. Such
assessments are necessarily inexact and their accuracy inherently uncertain.
There can be no assurance that Mesa's acquisition activities and exploration and
development projects will result in increases in reserves. Mesa's operations may
be curtailed, delayed or canceled as a result of lack of adequate capital and
other factors, such as title problems, weather, compliance with governmental
regulations or price controls, mechanical difficulties or shortages or delays in
the delivery of equipment. Furthermore, while Mesa's revenues may increase if
prevailing gas and oil prices increase significantly, Mesa's finding costs for
additional reserves could also increase. In addition, the costs of exploration
and development may materially exceed initial estimates.
6
<PAGE> 8
OPERATING HAZARDS; LIMITED INSURANCE COVERAGE
Mesa's operations are subject to hazards and risks inherent in drilling for
and production and transportation of natural gas and oil, such as fires, natural
disasters, explosions, encountering formations with abnormal pressures,
blowouts, cratering, pipeline ruptures and spills, any of which can result in
loss of hydrocarbons, environmental pollution, personal injury claims and other
damage to properties of Mesa and others. These risks could result in substantial
losses to Mesa due to injury and loss of life, severe damage to and destruction
of property and equipment, pollution and other environmental damage and
suspension of operations. Moreover, Mesa's Gulf of Mexico offshore operations
are subject to a variety of operating risks peculiar to the marine environment,
such as hurricanes or other adverse weather conditions, to more extensive
governmental regulation, including regulations that may, in certain
circumstances, impose strict liability for pollution damage, and to interruption
or termination of operations by governmental authorities based on environmental
or other considerations.
As protection against operating hazards, Mesa maintains insurance coverage
against some, but not all, potential losses. Mesa's coverages include, but are
not limited to, operator's extra expense, physical damage on certain assets,
employer's liability, comprehensive general liability, automobile, workers'
compensation and loss of production income insurance and limited coverage for
sudden environmental damages, but Mesa does not believe that insurance coverage
for environmental damages that occur over time is available at a reasonable
cost. Moreover, Mesa does not believe that insurance coverage for the full
potential liability that could be caused by sudden environmental damages is
available at a reasonable cost. Accordingly, Mesa may be subject to liability or
may lose substantial portions of its properties in the event of environmental
damages. The occurrence of an event that is not fully covered by insurance could
have an adverse impact on Mesa's financial condition and results of operations.
GOVERNMENTAL REGULATION
General. Mesa's operations are affected from time to time in varying
degrees by political developments and federal and state laws and regulations. In
particular, oil and natural gas production, operations and economics are or have
been affected by price controls, taxes and other laws relating to the oil and
natural gas industry, by changes in such laws and by changes in administrative
regulations. Mesa cannot predict how existing laws and regulations may be
interpreted by enforcement agencies or court rulings, whether additional laws
and regulations will be adopted, or the effect such changes may have on its
business or financial condition.
Environmental. Mesa's operations are subject to numerous laws and
regulations governing the discharge of materials into the environment or
otherwise relating to environmental protection. These laws and regulations
require the acquisition of a permit before drilling commences, restrict the
types, quantities and concentration of various substances that can be released
into the environment in connection with drilling and production activities,
limit or prohibit drilling activities on certain lands lying within wilderness,
wetlands and other protected areas, and impose substantial liabilities for
pollution which might result from Mesa's operations. Moreover, the recent trend
toward stricter standards in environmental legislation and regulation is likely
to continue. For instance, legislation has been proposed in Congress from time
to time that would reclassify certain crude oil and natural gas exploration and
production wastes as "hazardous wastes" which would make the reclassified wastes
subject to much more stringent handling, disposal and clean-up requirements. If
such legislation were to be enacted, it could have a significant impact on the
operating costs of Mesa, as well as the oil and gas industry in general.
Initiatives to further regulate the disposal of crude oil and natural gas wastes
are also pending in certain states, and these various initiatives could have a
similar impact on Mesa. Mesa could incur substantial costs to comply with
environmental laws and regulations. In addition to compliance costs, government
entities and other third parties may assert substantial liabilities against
owners and operators of oil and gas properties for oil spills, discharge of
hazardous materials, remediation and clean-up costs and other environmental
damages, including damages caused by previous property owners. The imposition of
any such liabilities on Mesa could have a material adverse effect on Mesa's
financial condition and results of operations.
7
<PAGE> 9
The Oil Pollution Act of 1990 imposes a variety of regulations on
"responsible parties" related to the prevention of oil spills. The
implementation of new, or the modification of existing, environmental laws or
regulations, including regulations promulgated pursuant to the Oil Pollution Act
of 1990, could have a material adverse impact on Mesa.
COMPETITION
Mesa operates in the highly competitive areas of natural gas and oil
production, development and exploration with other companies. Mesa also competes
with companies for the acquisition of desirable natural gas and oil properties,
as well as for the equipment and labor required to develop and operate such
properties. Factors affecting Mesa's ability to compete in the marketplace
include the availability of funds and information relating to a property, the
standards established by Mesa for the minimum projected return on investment,
the availability of alternate fuel sources and the intermediate transportation
of gas. Mesa's competitors include major integrated oil companies and a
substantial number of independent energy companies, many of which may have
substantially larger financial resources, staffs and facilities than Mesa.
USE OF PROCEEDS
Except as otherwise described in any Prospectus Supplement, the net
proceeds from the sale of Securities will be used for general corporate
purposes, which may include acquisitions, working capital, capital expenditures,
repayment of indebtedness and repurchases and redemptions of securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated fixed charges in excess of
earnings for the Company for the indicated periods.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Fixed charges in excess of earnings(a)... 67,441 58,476 83,460 109,650 95,451 82,582
</TABLE>
- ---------------
(a) For purposes of calculating fixed charges in excess of earnings, earnings
consist of net income (loss) after depreciation, depletion and amortization,
but before fixed charges, income taxes, minority interest and the loss of an
investment accounted for under the equity method. Fixed charges consist of
interest expense and capitalized interest. Earnings were not adequate to
cover fixed charges in the indicated periods.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement and the extent, if
any, to which such general provisions may apply to the Debt Securities so
offered will be described in the Prospectus Supplement relating to such Debt
Securities. The Debt Securities constitute either Senior Debt Securities or
Subordinated Debt Securities. The Debt Securities will be issued under one or
more separate indentures among MOC, the Company and a U.S. banking institution,
as trustee. Senior Debt Securities will be issued under a "Senior Indenture" and
Subordinated Debt Securities will be issued under a "Subordinated Indenture."
Each of the Senior Indenture and the Subordinated Indenture is referenced herein
as an "Indenture" and both of such indentures are referenced herein collectively
as the "Indentures." A form of each of the Indentures is filed as an exhibit to
the Registration Statement.
8
<PAGE> 10
The terms of the Debt Securities include those stated in the applicable
Indentures and those made part of such Indentures by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Debt
Securities are subject to all such terms, and prospective purchasers are
referred to the applicable Indentures and the Trust Indenture Act for a
statement of those terms. The following summaries of certain provisions of each
of the Indentures 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
respective Indenture, including the definitions of certain terms used therein.
Wherever particular defined terms of the Indentures are referenced, it is
intended that such defined terms shall be incorporated herein by reference in
their entirety. Unless otherwise noted, such references to particular defined
terms refer to such defined terms in each of the Indentures. Capitalized terms
used but not defined in this section captioned "Description of Debt Securities"
shall have the respective meanings given to them in the Indentures. Further
terms of the Debt Securities in respect of which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement.
RANKING OF THE DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other debt of MOC
that is unsecured and unsubordinated. The Subordinated Debt Securities will rank
junior to all Senior Debt (as hereinafter defined) of MOC that may be
outstanding from time to time. See "-- Provisions Applicable to the Subordinated
Indenture."
GUARANTEES
MOC's payment obligations under the Debt Securities will be unconditionally
guaranteed (the "Guarantees") by the Company. The Guarantees relating to any
Subordinated Debt Securities will be subordinated to indebtedness of the Company
to the same extent and in the same manner as the Subordinated Debt Securities
are subordinated to Senior Debt. See "-- Provisions Applicable to the
Subordinated Debt Indenture."
Each Indenture will provide that the Company may not consolidate with or
merge into or sell, assign, transfer or lease all or substantially all of its
assets to another corporation or other person other than MOC, unless (i) the
person is a corporation organized under the laws of the United States of America
or any state thereof, (ii) the person assumes by supplemental indenture all the
obligations of the Company relating to such Indenture and the Debt Securities
issued thereunder, (iii) immediately after the transaction, no Default or Event
of Default exists.
GENERAL PROVISIONS APPLICABLE TO EACH OF THE INDENTURES
Debt Securities consisting of unsecured debentures, notes and other
evidences of indebtedness may be issued from time to time in series under each
of the Indentures. The Indentures do not limit the aggregate principal amount of
Debt Securities or of any particular series of Debt Securities that may be
issued thereunder nor do they, unless otherwise stated in the applicable
Prospectus Supplement, restrict transactions between MOC and its Affiliates, the
payment of dividends by MOC or the transfer of assets by MOC to the Company or
any subsidiaries of the Company.
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the Debt Securities being offered
hereby: (i) the title of such Debt Securities; (ii) any limit on the aggregate
principal amount of such Debt Securities; (iii) the date or dates (or manner of
determining the same) on which such Debt Securities will mature; (iv) the rate
or rates (or manner of determining the same) at which such Debt Securities will
bear interest, if any, and the date or dates from which such interest will
accrue; (v) the dates (or manner of determining the same) on which such interest
will be payable and the Regular Record Dates for such Interest Payment Dates;
(vi) the place or places where the principal of and premium, if any, and
interest, if any, on such Debt Securities will be payable; (vii) the obligation
of MOC, if any, to redeem or purchase Debt Securities pursuant to any mandatory
or optional sinking fund or analogous provisions; (viii) the date, if any, after
which, and the price or prices at which, such Debt Securities are payable
pursuant to any optional or mandatory redemption provisions; (ix) the
denominations in which such Debt Securities will be issuable, if other than
denominations of $1,000 and any
9
<PAGE> 11
integral multiple thereof; (x) whether such Debt Securities are to be issued as
discounted Debt Securities; (xi) any "Events of Default" with respect to such
Debt Securities in addition to those described herein; (xii) whether such Debt
Securities are to be issued, in whole or in part, in the form of one or more
global securities ("Global Securities") and, if so, the identity of the
depositary, if any, for such Global Securities; (xiii) the identity of any
trustee, authenticating agent, paying agent or registrar with respect to such
Debt Securities, if other than the Trustee under such Indenture; (xiv) the
period or periods within which, the price or prices at which, and the terms and
conditions upon which Debt Securities of such series may be converted into other
Debt Securities of MOC; and (xv) any other specific terms of such Debt
Securities.
Pursuant to each Indenture, and unless otherwise indicated in the
applicable Prospectus Supplement, principal of and premium, if any, and
interest, if any, on the Debt Securities issued pursuant to such Indenture will
be payable, and the transfer of such Debt Securities will be registrable, at the
office or agency of the Trustee under such Indenture in New York City, except
that, at the option of MOC, interest may be paid by mailing a check on or before
the due date to the person entitled thereto as it appears on the Security
Register for such Debt Securities. No service charge will be made to any Holder
for any transfer or exchange of Debt Securities, except that MOC may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.
Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate that at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the applicable Prospectus Supplement.
Unless otherwise stated in the applicable Prospectus Supplement, there are
no covenants or provisions contained in the Indentures that may afford Holders
of Debt Securities protection in the event of a change of control of the Company
or MOC or a restructuring or other highly leveraged transactions involving the
Company or MOC.
Global Securities
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with or on behalf
of a depositary (a "Depositary") identified in the Prospectus Supplement
relating to such series.
Book-Entry Securities
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities that 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 or its nominee. Upon the issuance of a Global
Security in registered form, the Depositary for such Global Security 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 shall be designated by the
underwriters or agents of such Debt Securities or by MOC, if such Debt
Securities are offered and sold directly by MOC. Ownership of beneficial
interests in such Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Securities will be shown on, and the transfer of
such ownership interests will be effected only through, records maintained by
the Depositary or its nominee for such Global Security. Ownership of beneficial
interests in Global Securities by persons that hold through participants will be
shown on, and the transfer of such ownership interests within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of Debt Securities take
physical delivery of such Debt Securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Security for all purposes under
the
10
<PAGE> 12
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Securities will not be entitled to have
Securities of the series represented by such Global Debt Security registered in
their names, will not receive or be entitled to receive physical delivery of
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or holder of the Global Security representing such Debt Securities. None
of MOC or the Trustee, the Paying Agent or the Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
MOC expects that the Depositary for Debt Securities of a particular series,
upon receipt of any payment of principal of and premium, if any, and interest,
if any, on a Global Security, will immediately credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security as shown on the records of such
Depositary. MOC also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with Debt Securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants. However, MOC has no control over the practices of the Depositary
or the participants and there can be no assurance that these practices will not
be changed.
A Global Security may not be transferred 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 such nominee to a successor of such
Depositary or a nominee of such successor. If a Depositary for Debt Securities
of a particular series is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by MOC within 90 days,
MOC will issue Debt Securities in definitive registered form in exchange for the
Global Security or Debt Securities representing such Debt Securities. In
addition, MOC may at any time and in its sole discretion determine not to have
any Debt Securities represented by one or more Global Securities and, in such
event, will issue Debt Securities in definitive form in exchange for the Global
Securities representing such Debt Securities. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name.
Restrictions on Mergers, Consolidations and Transfers of Assets
Each of the Indentures provides that MOC will not consolidate or merge into
or sell, assign, transfer or lease all or substantially all of its assets to
another person unless (i) the person is a corporation organized under the laws
of the United States of America or any state thereof, (ii) the person assumes by
supplemental indenture all the obligations of MOC relating to such Indenture and
the Debt Securities issued thereunder and (iii) immediately after the
transaction no Default or Event of Default exists. Upon any such consolidation,
merger, sale, assignment or transfer, the successor corporation will be
substituted for MOC under such Indenture and MOC may thereafter liquidate and
dissolve. The successor corporation may then exercise every power and right of
MOC under such Indenture, and MOC will be released from all of its liabilities
and obligations in respect of such Debt Securities and such Indenture. Each
Indenture also provides that in the event MOC leases all or substantially all of
its assets, the lessee corporation will be the successor to MOC and may exercise
every power and right of MOC such Issuer under such Indenture, but MOC will not
be released from its obligations to pay the principal of and premium, if any,
and interest, if any, on the Debt Securities issued under such Indenture.
11
<PAGE> 13
Amendments of the Indentures
Amendments of each of the Indentures or the Debt Securities of any series
issued thereunder may be made by MOC and the Trustee thereunder without the
consent of the Holders of such Debt Securities (i) to cure any ambiguity, defect
or inconsistency or to make such provisions with respect to matters or questions
arising under such Indenture as may be necessary or desirable and not
inconsistent with such Indenture or with any indenture supplemental thereto or
any Board Resolution establishing any series of such Debt Securities, provided
that such amendment does not adversely affect the rights of the Holders thereof,
(ii) to comply with the merger or sale of assets provision in such Indenture,
(iii) to add additional covenants to such Indenture, (iv) to establish the form
or terms of Debt Securities of any additional series to be issued thereunder,
(v) to provide for the acceptance of appointment of a successor Trustee under
such Indenture or (vi) to provide for the exchange of Global Securities for Debt
Securities issued in definitive form and to make a appropriate changes for such
purpose.
Each of the Indentures provides that amendments of such Indenture affecting
the Debt Securities of any series issued under such Indenture or amendments of
the Debt Securities of such series issued under such Indenture may be made by
MOC and the Trustee under such Indenture with the consent of the Holders of a
majority in aggregate principal amount of the Debt Securities of such series;
provided that, without the consent of each Holder affected, no such amendment
shall be made that will (i) reduce the percentage in principal amount of the
Debt Securities issued under such Indenture whose Holders must consent to an
amendment, (ii) reduce the rate of or change the time for payment of interest on
any Debt Security issued under such Indenture, (iii) reduce the principal of,
change the Stated Maturity of, reduce the amount payable on redemption of or
alter the requirements with respect to the mandatory redemption, if any, of any
Debt Security issued under such Indenture, (iv) make any such Debt Security
payable in money other than that stated in such Debt Security, (v) make any
change in the provisions of such Indenture with respect to waiver of existing
Defaults, rights of Holders to receive payment and to bring suit for the
enforcement of such rights, or the requirement of obtaining the written consent
of each affected Holder to certain amendments of such Indenture or any Debt
Security issued thereunder or (vi) in the case of the Subordinated Indenture,
modify the subordination provisions thereof in a manner adverse to the Holders.
Events of Default
Each of the Indentures will provide that each of the following constitutes
an Event of Default with respect to any series of Debt Securities issued under
such Indenture: (i) a default for 30 consecutive days in the payment when due of
interest on any Debt Security of such series (in the case of Subordinated Debt
Securities, whether or not prohibited by the subordination provisions of the
Subordinated Indenture); (ii) a default in the payment when due of the principal
of or premium, if any, on any Debt Security of any series (in the case of
Subordinated Debt Securities, whether or not prohibited by the subordination
provisions of the Subordinated Indenture); (iii) the failure by MOC to comply
with its obligations under "Restrictions on Mergers, Consolidations and
Transfers of Assets" above; (iv) the failure by MOC for 60 consecutive days
after notice from the applicable Trustee or the Holders of at least 25% in
aggregate principal amount of any Debt Security of such series then outstanding
to comply with any of its other agreements in the applicable Indenture or
applicable Debt Securities for the benefit of such Debt Securities of such
series; (v) except as permitted by the Indentures, the Guarantee of the Debt
Securities of such series shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or the Company, or any person acting on behalf of the Company, shall deny
or disaffirm its obligations under such guarantee; (vi) a default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by MOC or
the Company thereunder, whether such indebtedness now exists or is created after
the date of the Indentures, which default (a) is caused by a failure to pay such
indebtedness within any applicable grace period after final maturity (a "Payment
Default") or (b) results in the acceleration of such indebtedness prior to its
final maturity and, in each case, the principal amount of such indebtedness,
together with the principal amount of any other such indebtedness under which
there is then existing a Payment Default or the maturity of which has been so
accelerated, aggregates $10,000,000 or more; provided, that if any such default
is cured or waived or any such
12
<PAGE> 14
acceleration rescinded, or such indebtedness is repaid, within a period of 10
days from the continuation of such default beyond the applicable grace period or
the occurrence of such acceleration, as the case may be, such Event of Default
under the Indentures and any consequential acceleration of the Debt Securities
shall be automatically rescinded; (vii) final judgments or orders rendered
against MOC that are unsatisfied and that require the payment in money, either
individually or in an aggregate amount, that is more than $10,000,000 over the
coverage under applicable insurance policies and either (a) commencement by any
creditor of an enforcement proceeding upon such judgment (other than a judgment
that is stayed by reason of pending appeal or otherwise) or (b) the occurrence
of a 60-day period during which a stay of such judgment or order, by reason of
pending appeal or otherwise, was not in effect; (viii) certain events of
bankruptcy or insolvency with respect to MOC or the Company; and (ix) any other
event established as an event of default in accordance with such Indenture with
respect to Debt Securities of such series.
If any Event of Default occurs and is continuing with respect to any series
of Debt Securities, the applicable Trustee or the Holders of at least 25% in
principal amount of any Debt Securities of such series then outstanding may
declare the principal of and accrued but unpaid interest on all the Debt
Securities of such series to be due and payable immediately. MOC may not pay the
Debt Securities of such series until five business days after such holders
receive such notice of acceleration and, in the case of Subordinated Debt
Securities, thereafter, may pay the Debt Securities of such series only to the
extent the subordination provisions of the Subordinated Indenture permit such
payment. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to MOC, all
outstanding Debt Securities will become due and payable without further action
or notice. Holders any series of Debt Securities may not enforce the applicable
Indenture of such Debt Securities except as provided in the applicable
Indenture. Subject to certain limitations, Holders of a majority in principal
amount outstanding of the Debt Securities of such series may direct the relevant
Trustee in its exercise of any trust or power. Each Trustee may withhold from
Holders of the Debt Securities of such series notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest) if it determines that withholding notice is in
the interest of the Holders of the Debt Securities of such series.
After a declaration of acceleration under an Indenture, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, Holders of a majority in principal amount outstanding of the
Debt Securities of such series, by written notice to MOC and the applicable
Trustee, may rescind such declaration if (i) MOC has paid or deposited with the
applicable Trustee a sum sufficient to pay (a) all sums paid or advanced by such
Trustee under the applicable Indenture and the reasonable compensation,
expenses, disbursements and advances of such Trustee, its agents and counsel and
(b) all overdue interest on the Debt Securities of such series, if any, (ii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iii) all Events of Default, other than the
nonpayment of principal of, premium, if any, and interest on the Debt Securities
of such series that has become due solely by such declaration of acceleration,
have been cured or waived.
The Holders of a majority in aggregate principal amount outstanding of the
Debt Securities of such series by notice to the relevant Trustee may on behalf
of the Holders of all of the Debt Securities of such series waive any existing
Default or Event of Default and its consequences under the relevant Indenture
except a continuing Default or Event of Default in the payment of interest or
premium on, or the principal of, the Debt Securities of such series.
MOC and the Company are required to deliver to each Trustee annually a
statement regarding compliance with the relevant Indenture, and MOC and the
Company are required, within five business days after becoming aware of any
Default or Event of Default, to deliver to each Trustee a statement specifying
such Default or Event of Default.
Defeasance of the Indentures and Securities
Each of the Indentures provides that MOC may at any time satisfy its
obligations with respect to payments of principal of and premium, if any, and
interest, if any, on the Debt Securities of any series issued under such
Indenture by irrevocably depositing in trust with the Trustee under such
Indenture money or U.S. Government Obligations or a combination thereof
sufficient to make such payments when due without
13
<PAGE> 15
reinvestment thereof. If such a deposit is sufficient to make all payments of
(i) interest, if any, on the Debt Securities of such series prior to and on
their redemption or maturity, as the case may be, and (ii) principal of and
premium, if any, on the Debt Securities of such series when due upon redemption
or at Stated Maturity, as the case may be, then all the obligations of MOC with
respect to the Debt Securities of such series and such Indenture insofar as it
relates to the Debt Securities of such series will be satisfied and discharged
(except as otherwise provided in such Indenture). In the event of any such
defeasance, Holders of the Debt Securities of such series would be able to look
only to such trust fund for payment of principal of and premium, if any, and
interest, if any, on the Debt Securities of such series until Stated Maturity or
redemption.
Each of the Indentures also provides that such a trust may only be
established if, among other things, (i) MOC has obtained an opinion of legal
counsel (which may be based on a ruling from, or published by, the Internal
Revenue Service) to the effect that Holders of the Debt Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge had
not occurred and (ii) at that time, with respect to any series of Debt
Securities issued under such Indenture and then listed on The New York Stock
Exchange, the rules of The New York Stock Exchange do not prohibit such deposit
with such Trustee.
Annual Reports by the Trustee
To the extent required by the Trust Indenture Act, the Trustee under each
Indenture shall, within 60 days after May 15 in each year, furnish to each
Holder of Debt Securities issued under such Indenture an annual report that
complies with Section 313 of the Trust Indenture Act. The Indentures do not
require that MOC or the respective Trustee thereunder furnish any other reports,
documents or information to the Holders of Debt Securities.
Notices and Communications
Notices or communications to Holders of Debt Securities will be given by
first-class mail to the addresses of such Holders as they appear in the Debt
Security Register.
Holders of Debt Securities may communicate with other Holders of such Debt
Securities with respect to their rights under such Debt Securities or the
Indenture governing such Debt Securities pursuant to the provisions of Section
312(b) of the Trust Indenture Act, which require a trustee to provide
securityholders access to information regarding the addresses of other
securityholders in certain situations.
Governing Law
The Indentures and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
PROVISIONS APPLICABLE TO THE SUBORDINATED INDENTURE
The payment of principal of, premium, if any, and interest on the
Subordinated Debt Securities and any other payment obligations of MOC in respect
of any Subordinated Debt Securities (including any obligation to repurchase the
Subordinated Debt Securities) will be subordinated in right of payment, as set
forth in the Subordinated Indenture, to the prior payment in full in cash of all
Senior Debt (as defined below), whether outstanding on the date of the
Indentures or thereafter incurred.
Upon any payment or distribution of property or securities to creditors of
MOC of any Subordinated Debt Securities in a liquidation or dissolution of MOC
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to MOC or its property, or in an assignment for the benefit
of creditors or any marshaling of MOC's assets and liabilities, the holders of
Senior Debt will be entitled to receive payment in full in cash of all
obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not a claim for such
14
<PAGE> 16
interest would be allowed in such proceeding) before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment with
respect to the Subordinated Debt Securities and, until all obligations with
respect to Senior Debt are paid in full in cash, any distribution to which the
Holders of the Subordinated Debt Securities would be entitled shall be made to
the holders of Senior Debt (except that Holders of the Subordinated Debt
Securities may receive payments made from the trust described under
"-- Defeasance of the Indentures and Securities" if the deposit into such trust
was permitted to be made under the terms of the applicable Indenture).
MOC also may not make any payment (whether by redemption, purchase,
retirement, defeasance or otherwise) upon or in respect of such Subordinated
Debt Securities (except from the trust described under "-- Defeasance of the
Indentures and Securities") if (i) a default in the payment of the principal of,
premium, if any, or interest on Designated Senior Debt (as defined below) occurs
or (ii) any other default occurs and is continuing with respect to Designated
Senior Debt that permits, or with the giving of notice or passage of time or
both (unless cured or waived) will permit, holders of the Designated Senior Debt
as to which such default relates to accelerate its maturity and the Trustee
receives a notice of such default (a "Payment Blockage Notice") from a
representative of the holders of any Designated Senior Debt.Cash payments on any
Subordinated Debt Securities shall be resumed (a) in the case of a payment
default, upon the date on which such default is cured or waived and (b) in case
of a nonpayment default, the earliest of (1) the date on which such nonpayment
default is cured or waived, (2) the date the applicable Payment Blockage Notice
is retracted by written notice to the Trustee from a representative of the
holders of the Designated Senior Debt that have given such Payment Blockage
Notice and (3) 179 days after the date on which the applicable Payment Blockage
Notice is received, unless any of the events described in clause (i) of this
paragraph has then occurred and is continuing or a default of the type described
in clause (ix) under the caption "Events of Default" has occurred. No new period
of payment blockage may be commenced unless and until 360 days have elapsed
since the date of commencement of the payment blockage period resulting from the
immediately prior Payment Blockage Notice. No nonpayment default in respect of
Designated Senior Debt that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Subordinated Indenture will further require that MOC promptly notify
Holders of Senior Debt if payment of such Subordinated Debt Securities is
accelerated because of an Event of Default.As a result of the subordination
provisions described above, in the event of a liquidation or insolvency of
MOC.Holders of such Subordinated Debt Securities may recover less ratably than
creditors of MOC who are holders of Senior Debt. The principal amount of
unsubordinated borrowings of Mesa outstanding at September 30, 1996 would have
been approximately $355 million.
The terms "Senior Debt" and "Designated Senior Debt" are defined in the
Subordinated Indenture to have the meaning given to such term in the Board
Resolution or supplemental indenture pursuant to which Debt Securities may be
issued in accordance with such Subordinated Indenture. The definition of such
terms will be set forth in the Prospectus Supplement respecting any such Debt
Securities.
15
<PAGE> 17
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The authorized capital stock of the Company consists of 600 million shares
of Common Stock, par value $.01 per share, and 500 million shares of Preferred
Stock, par value $.01 per share, of which 140 million shares have been
designated as Series A Preferred Stock, 140 million shares have been designated
as Series B Preferred Stock and 1,000,000 shares have been designated as Series
A Junior Participating Preferred Stock. As of December 31, 1996, 64,279,568
shares of Common Stock, 60,443,259 shares of Series A Preferred Stock and
61,200,427 shares of Series B Preferred Stock were issued and outstanding.
COMMON STOCK
Holders of Common Stock have no preemptive rights to purchase or subscribe
for securities of the Company, and the Common Stock is not convertible into any
other securities or subject to redemption by the Company.
Subject to the rights of the holders of any class of capital stock of the
Company having any preference or priority over the Common Stock, the holders of
the Common Stock are entitled to dividends in such amounts as may be declared by
the Board of Directors of the Company from time to time out of funds legally
available for such payments and, in the event of liquidation, to share ratably
in any assets of the Company remaining after payment in full of all creditors
and provision for any liquidation preferences on any outstanding Preferred Stock
ranking prior to the Common Stock.
American Stock Transfer & Trust Company serves as registrar and transfer
agent for the Common Stock.
PREFERRED STOCK
The Board of Directors, without further action by the shareholders, is
authorized to issue up to 500 million shares of preferred stock in one or more
series and to fix and determine as to any series all the relative rights and
preferences of shares in such series, including, without limitation,
preferences, limitations or relative rights with respect to redemption rights,
conversion rights, if any, voting rights, if any, dividend rights and
preferences on liquidation.
The terms of the Series A Preferred Stock and Series B Preferred Stock are
identical in all respects, except as described below under "Voting Rights" and
"Transferability; Conversion of Series B to Series A Preferred Stock."
Voting Rights. Subject to certain special voting rights of the holders of
Series B Preferred Stock (described below), holders of Series A and Series B
Preferred Stock will generally have the right to vote (on an as-converted basis)
as a single class with the holders of Common Stock on all other matters coming
before the Company's stockholders, except matters for which class voting is
required under the Company's Articles of Incorporation, including the Statement
of Resolution establishing the Preferred Stock, or the Texas Business
Corporation Act (the "TBCA").
With respect to any matter for which class voting is required by the TBCA,
except as otherwise described herein or required by law, the holders of Series A
and Series B Preferred Stock will vote together as a single class and not as
separate classes or series apart from each other, including any vote to approve
or adopt (i) any plan of merger, consolidation or share exchange for which the
TBCA requires a stockholder vote; (ii) any disposition of assets for which the
TBCA requires a stockholder vote; and (iii) any dissolution of the Company for
which the TBCA requires a stockholder vote.
16
<PAGE> 18
The following matters will require the approval of the holders of at least
a majority of the outstanding Series A and Series B Preferred Stock, voting
together as a single class:
(i) the authorization, creation or issuance, or any increase in the
authorized or issued amount, of any class or series of stock ranking senior
to or in parity with the Series A or Series B Preferred Stock or any
security convertible into or exchangeable for any such class or series
(provided that, if the holders of Series A and Series B are affected
differently, each series will vote as a separate class); or
(ii) any amendment of the Company's Articles of Incorporation to
eliminate cumulative voting.
Without the affirmative vote or consent of the holders of two-thirds of the
shares of Series A Preferred Stock voting as a separate class, the Company may
not adopt any amendment to the Articles of Incorporation or the Bylaws that
would materially affect the terms of the Series A Preferred Stock. Without the
affirmative vote or consent of the holders of at least a majority of the shares
of Series B Preferred Stock voting as a separate class, the Company may not
adopt any amendment to the Articles of Incorporation or the Bylaws that would
materially affect the terms of the Series B Preferred Stock.
For so long as any shares of Series B Preferred Stock remain outstanding,
the affirmative vote or consent of the holders of at least a majority of such
shares will be required in order to permit, affect or validate the amendment,
alteration or repeal of any provisions of the Articles of Incorporation
(including the Statement of Resolution relating to the Series A and Series B
Preferred Stock) or Bylaws of the Company that would limit the authority of the
Board to amend or repeal any provision of The Company's Bylaws, or that would
adversely affect any rights, preferences, privileges or voting power of the
Series B Preferred Stock differently from the rights, preferences, privileges or
voting power of the Series A Preferred Stock (to the extent such rights,
preferences, privileges or voting power of such two series are the same prior to
such amendment).
For so long as the Minimum Ownership Condition is satisfied, the holders of
the Series B Preferred Stock will be entitled, voting separately as a class, to
elect a majority of the members of the Company's Board (excluding any Series A
Directors, as defined below). The directors elected by the holders of Series B
Preferred Stock (the "Series B Directors") may be removed with or without cause,
and may only be removed by a vote or consent of the holders of a majority of the
outstanding shares of Series B Preferred Stock, voting separately as a class.
Vacancies among the Series B Directors will be filled by a majority vote of the
remaining Series B Directors or by the holders of Series B Preferred Stock. Upon
any termination of the right of the holders of Series B Preferred Stock to elect
Series B Directors, (i) the Series B Directors then serving may continue to hold
office for the remainder of their term, subject to the right of the majority of
the other directors (other than any Series A Directors) to request their prior
resignation, and (ii) upon the expiration of the term of office or earlier
resignation of each Series B Director, the size of the Board will automatically
be reduced accordingly unless a majority of the non-Series B Directors by
resolution determine otherwise and elect additional directors to fill any
resulting vacancies.
If the Company is in arrears in the payment of dividends (whether payable
in cash or in kind) on the shares of Series A and Series B Preferred Stock for a
total of six quarters, then the size of the Board will automatically be
increased by two additional directors and the holders of Series A Preferred
Stock, voting as a separate class, will have the exclusive right to elect two
directors (the "Series A Directors") immediately and at the next and every
subsequent annual meeting of shareholders called for the election of directors.
The right of the Series A Preferred holders to elect the Series A Directors will
terminate when all dividends accumulated on the Series A Preferred Stock have
been paid in full, subject to revesting at such time as the Company is again in
arrears in the payment of dividends.
During any period in which the holders of Series A Preferred Stock are
entitled to elect Series A Directors, or the holders of Series B Preferred Stock
are entitled to elect Series B Directors, the holders of Series A and Series B
Preferred Stock will have certain special rights to call a special meeting of
the Company in lieu of the Company's annual meeting or for the purpose of
electing Series A or Series B Directors. At a meeting held for the purpose of
electing a Series A or Series B Director, at least one-third of the outstanding
shares of Series A Preferred Stock or Series B Preferred Stock, as applicable,
present in person or by proxy, will be required to constitute a quorum.
17
<PAGE> 19
During any period in which the holders of Series B Preferred Stock are
entitled to elect Series B Directors, (i) the holders of Series B Preferred
Stock will not be entitled to vote in the election of any directors other than
the Series B Directors, (ii) no Series B Director will have the right to vote in
the election of any person to fill any vacancy on the Board, other than a
vacancy of a Series B Director, and all such rights with respect to non-Series A
and Series B Directors will be exercised for and on behalf of the Board by a
majority of the non-Series A and Series B Directors, and (iii) only the
non-Series A and Series B Directors will have the right to vote in any action by
or on behalf of the Board with respect to nominating persons to serve as
non-Series A and Series B Directors to be elected at any meeting of shareholders
that is held after the 1996 annual meeting of shareholders. The persons to be
nominated by or on behalf of the Board for election as non-Series A and B
Directors at the 1996 annual meeting will be the persons most recently
designated as such nominees by action of the Board prior to the date of the
First Closing (or, if any of such nominees shall be unable or unwilling to
serve, such other person or persons as shall be designated by the other such
nominee or nominees), unless otherwise agreed after such date by the unanimous
vote of all non-Series A and B Directors then in office. Nothing in clause (ii)
or (iii) above shall limit or restrict the right of holders of shares of Common
Stock and Series A Preferred Stock to nominate and to elect, subject to and in
accordance with applicable law, the other provisions of the Articles of
Incorporation and the Bylaws, persons to serve as non-Series A and Series B
Directors. The foregoing provision may not be amended without (x) the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and (y) the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock.
Dividends. Subject to the satisfaction of certain conditions described
below, holders of Preferred Stock will be entitled to receive, as and when
declared by the Company out of funds legally available therefor, cumulative
dividends at the rate of 8.0% per annum of the stated value (the "Stated Value")
of such shares (initial stated value of $2.26), compounded quarterly. Dividends
will be payable quarterly in arrears on the last business day of each March,
June, September and December, beginning September 30, 1996. Prior to the fourth
anniversary of the issuance of the Preferred Stock, dividends will be payable in
additional shares of Preferred Stock, based upon their Stated Value. On and
after the fourth anniversary of the issue date, the Company may elect to pay
dividends in cash rather than shares of Preferred Stock for any quarter in which
any of the following conditions is satisfied as of the record date for such
dividend:
Fixed Charge Coverage Ratio. The Company's average Fixed Charge
Coverage Ratio at the end of the four preceding quarters is in excess of
2.5. "Fixed Charge Coverage Ratio" means the ratio of (i) the sum of (A)
Consolidated EBITDA plus (B) one-third of gross operating rents paid before
sublease income (as defined by Standard & Poor's Corporation), if any
("Gross Rents") to (ii) the sum of (A) interest expense, both expensed and
capitalized, of the Company and its consolidated subsidiaries, plus (B)
one-third of Gross Rents plus (C) scheduled principal amortization of
indebtedness (including borrowed money and capitalized leases) of the
Company and its consolidated subsidiaries. "Consolidated EBITDA" means the
consolidated net income or loss of the Company for the period, excluding
gains and losses not arising from operations (including interest income,
gains and losses from investments, gains and losses from dispositions of
oil and gas properties, collections and settlements of claims and
litigation, adjustments of contingency reserves and other extraordinary
gains and losses), plus, to the extent the following have been deducted in
determining such income or loss, interest expense, income taxes,
depreciation, depletion and amortization expense and impairment expense.
Gas Price Realization. The Average Gas Equivalent Price realized by
the Company on an Mcf equivalent basis (using a 6:1 conversion ratio)
during the four preceding quarters as reported in the Company's financial
statements is in excess of $2.95. "Average Gas Equivalent Price" means the
average price received by the Company from sales of oil and gas production,
to be calculated as follows:
(i) the aggregate revenues of the Company and its consolidated
subsidiaries during such period from sales of natural gas, natural gas
liquids and oil and condensate produced (other than that used for fuel,
and shrinkage) and sold by the Company and its consolidated
subsidiaries, as reported in the Company's consolidated financial
statements, divided by
(ii) the sum of (A) the total volume, on an Mcf basis, of natural
gas produced (other than that used for fuel, and shrinkage) and sold by
the Company and its consolidated subsidiaries during such
18
<PAGE> 20
period plus (B) the product of 6 times the total number of barrels of
natural gas liquids, oil and condensate produced (other than that used
for fuel, and shrinkage) and sold by the Company and its consolidated
subsidiaries during such period, as derived from the Company's
consolidated financial statements.
Stock Price Threshold. The average closing price of the Common Stock
during any 90 consecutive trading days preceding the tenth day prior to the
record date for any dividend payment date after the fourth anniversary of
the issue date is more than three times the conversion price then in
effect.
If the stock price threshold described above is met, the Company will
thereafter have the option to pay dividends either in kind or in cash on any
subsequent dividend payment date, regardless of any subsequent changes in the
price of the Common Stock. However, the indentures governing the Notes and the
Credit Facility may limit the Company's ability to pay cash dividends even if
permitted by the terms of the Preferred Stock.
To the extent dividends are not paid in cash or in kind on a scheduled
dividend payment date, all accrued but unpaid dividends will be added to the
Stated Value of each share of Preferred Stock outstanding and shall remain a
part thereof until paid, and dividends will accrue and be paid thereafter on the
basis of the Stated Value, as adjusted.
Conversion. Shares of Series A and Series B Preferred Stock are convertible
into shares of Common Stock at any time at the option of the holder, at an
initial conversion ratio of one share of Common Stock per share of Preferred
Stock. The conversion ratio is subject to customary anti-dilution adjustment in
the event the Company (a) subdivides the outstanding shares of Common Stock into
a greater number of shares; (b) combines the outstanding shares of Common Stock
into a smaller number of shares; (c) declares, orders, pays or makes any
dividend or other distribution to holders of Common Stock payable in Common
Stock; (d) declares, orders, pays or makes any dividend or other distribution to
all holders of Common Stock, other than a dividend payable in shares of Common
Stock (including dividends or distributions payable in cash, evidences of
indebtedness, rights, options or warrants to subscribe for or purchase shares of
Common Stock or other securities, or any other securities or other property, but
excluding any rights to purchase stock or other securities if such rights are
not separable from the Common Stock except upon occurrence of a contingency
beyond the control of the Company); or (e) issues or sells any shares of Common
Stock or any rights, options, warrants to subscribe for or purchase shares of
Common Stock or shares having the same rights, privileges and preferences as the
Common Stock or securities convertible into Common Stock or equivalent common
stock, at a price per share of Common Stock or equivalent common stock (or
having a conversion price per share, in the case of a security convertible into
shares of Common Stock or equivalent common stock) less than the market price of
the Common Stock on the date of such issue or sale, other than (i) the
conversion or redemption of shares of Series A or Series B Preferred Stock, (ii)
the payment of any stock dividend on the Series A or Series B Preferred Stock,
(iii) the issuance of options to officers, directors and employees of the
Company and its subsidiaries to purchase shares of Common Stock, including any
such options as are issued and outstanding as of the original issue of the
Series B Preferred Stock, (iv) the issuance and sale of Common Stock upon
exercise of any rights, options or warrants described in the foregoing clause
(iii) or in clause (d) above or (v) the issuance and sale of Common Stock in an
underwritten public offering at a price of not less than 95% of the closing
price of the Common Stock on the date of pricing such offering.
If, at any time after the original issue date, the Company is a party to
any transaction (including a merger, consolidation, statutory share exchange,
sale of all or substantially all of the Company's assets or recapitalization of
the Common Stock), as a result of which shares of Common Stock (or any other
securities of the Company then issuable upon conversion of the Series A or
Series B Preferred Stock) will be converted into the right to receive stock,
securities or other property (including cash) or any combination thereof (a
"Fundamental Change Transaction"), then the shares of Series A and Series B
Preferred Stock remaining outstanding will thereafter no longer be convertible
into Common Stock (or such other securities), but instead each share will be
convertible into the kind and amount of stock and other securities and property
receivable upon the consummation of such Fundamental Change Transaction by a
holder of that number of shares of
19
<PAGE> 21
Common Stock (or such other securities) into which one share of Series A or
Series B Preferred Stock was convertible immediately prior to such Fundamental
Change Transaction (assuming such holder of Common Stock or other securities
failed to exercise any right of election as to the kind of consideration to be
received in such Fundamental Change Transaction). The Company is prohibited from
being a party to any Fundamental Change Transaction after which shares of Series
A and Series B Preferred Stock will remain outstanding unless the terms of such
Fundamental Change Transaction are consistent with the foregoing, and it may not
consent or agree to the occurrence of any such Fundamental Change Transaction
until it has entered into an agreement with the successor or purchasing entity,
as the case may be, for the benefit of the holders of the Series A and Series B
Preferred Stock containing provisions enabling such holders to convert such
shares into the consideration received by holders of Common Stock (or other
securities of the Company then issuable upon conversion of Series A or Series B
Preferred Stock), at the conversion ratio then in effect, after such Fundamental
Change Transaction. In the event that, as a result of an adjustment pursuant to
a Fundamental Change Transaction, the Series A and Series B Preferred Stock
become convertible into any securities other than shares of Common Stock, the
number of such other securities issuable upon conversion will be subject to
adjustment to prevent dilution and adjustment in the event of a successive
Fundamental Change Transaction in a manner and on terms as nearly equivalent as
practicable to those described herein.
Redemption. Subject to any restrictions imposed by the terms of the New
Credit Facility or the indentures governing the Notes, the Company may, at its
option, redeem all or part of the outstanding shares of Series A and Series B
Preferred Stock (pro rata or by lot among the outstanding shares of both series)
on any dividend payment date after the thirtieth day following the tenth
anniversary of the original date of issue of the Series B Preferred Stock. All
outstanding shares of Series A and Series B Preferred Stock are subject to
mandatory redemption on June 30, 2008. The redemption price upon any optional or
mandatory redemption will be equal to the Stated Value per share of the shares
to be redeemed, plus an amount equal to the dollar amount of all accrued and
unpaid dividends through the redemption date that have not been added to the
Stated Value of such shares. The redemption price may be paid either in cash or
in shares of Common Stock, at the option of the Company as announced 30 days
prior to the redemption date, with the number of shares of Common Stock used to
pay the redemption price to be determined based upon the average trading price
during the 20 day period ending five days before the redemption date.
Liquidation. Each share of Series A Preferred Stock and Series B Preferred
Stock will rank prior to each share of Common Stock with respect to the
distribution of assets upon a liquidation, dissolution or winding-up of the
Company. The Series A Preferred Stock and Series B Preferred Stock will be pari
passu as to liquidation rights. In the event of any such liquidation,
dissolution or winding-up, each holder of a share of Series A Preferred Stock or
Series B Preferred Stock will be entitled to receive, before any distribution to
the holder of Common Stock, a liquidation preference equal to the Stated Value
of such shares, plus all accrued and unpaid dividends thereon.
Ranking. The Series A Preferred Stock and the Series B Preferred Stock rank
on a parity with each other as to payment of dividends and distributions and
upon liquidation, dissolution or winding-up of the Company. In the event that
the Company is a party to any merger, consolidation or share exchange in which
the Series A Preferred Stock or Series B Preferred Stock is converted or
exchanged into any other securities, property, cash or other consideration, the
securities, property, cash or other consideration into which the Series A and
Series B Preferred Stock may be converted or exchanged must be identical in kind
and amount per share, and no shares of Series A or Series B Preferred Stock may
be converted or exchanged into any securities, property, cash or other
consideration unless all shares of Series A and Series B Preferred Stock may be
converted or exchanged into the same kind and amount per share of securities,
property, cash or other consideration. The Common Stock and the Series A Junior
Participating Preferred Stock will rank junior to the Series A and Series B
Preferred Stock with respect to the payments required or permitted to made to
the holders of such securities pursuant to their respective governing
instruments.
Authorization by Non-Series A and Series B Directors. A majority of the
Company's directors, other than Series A Directors and Series B Directors, is
required to make the determinations required or permitted (i) as to whether to
make payment of the redemption price of Series A and Series B Preferred Stock in
cash or in kind, (ii) as to whether to exercise the Company's option to redeem
outstanding shares of Series A or Series B
20
<PAGE> 22
Preferred Stock and (iii) as to whether to make payment of any dividends
declared by the Board on the Series A and Series B Preferred Stock in cash or in
kind on or after the fourth anniversary of the issue date (subject to the
requirement that the Company have sufficient cash legally available to make any
cash dividend payment).
Certain Covenants of the Company. For so long as any shares of Series A or
Series B Preferred Stock are outstanding, the Company must at all times reserve
and keep available for issuance upon the conversion of such shares such number
of its authorized but unissued shares of Common Stock as will be sufficient to
permit the conversion of all outstanding shares of Series A and Series B
Preferred Stock and all other securities and instruments convertible into shares
of Common Stock. The Company must endeavor to make the shares of stock that may
be issued upon redemption or conversion of Series A or Series B Preferred Stock
eligible for trading on any national securities exchange or automated quotation
system upon or through which the Common Stock is then traded. Prior to the
delivery of any securities upon redemption or conversion of Series A or Series B
Preferred Stock, the Company must endeavor to comply with all federal and state
securities laws and regulations requiring the registration of such securities
with, or the approval of or consent to the delivery of such securities by, any
governmental authority. The Company must pay all taxes and other governmental
charges (other than income or franchise taxes) that may be imposed with respect
to the issue or delivery of shares of Common Stock upon conversion or redemption
of shares of Series A or Series B Preferred Stock, but will not be required to
pay any transfer taxes incurred as a result of the issuance of shares of Common
Stock in a name other than that of the registered holder of the converted or
redeemed shares of Preferred Stock.
Transferability; Conversation of Series B to Series A Preferred Stock. The
Series A Preferred Stock offered hereby, and the shares of Common Stock issuable
upon conversion thereof, have been registered under the Securities Act and the
Exchange Act. Accordingly, shares of Series A Preferred Stock and shares of
Common Stock issuable upon conversion thereof will generally be freely
transferrable by the holders thereof. The Series A Preferred Stock is listed for
trading on the New York Stock Exchange under the symbol "MXPPrA."
Upon any transfer of shares of Series B Preferred Stock, or the beneficial
ownership thereof, to any person other than DNR, its partners and their
respective affiliates, such shares will automatically convert to an equal number
of shares of Series A Preferred Stock. In addition, at such time as the Minimum
Ownership Condition is no longer met, all shares of Series B Preferred Stock
then outstanding will automatically convert into an equal number of shares of
Series A Preferred Stock.
The Company has entered into a Registration Rights Agreement with DNR which
gives DNR certain demand and "piggyback" registration rights.
CONFIDENTIAL VOTE
The Company's Bylaws provide for an independent third party to collect and
tabulate shareholders' proxies so as to keep the votes of shareholders
confidential from the Company and other persons soliciting proxies, except to
the extent otherwise required by law or to resolve any dispute with respect
thereto.
SPECIAL MEETINGS
Special meetings of the shareholders of the Company may be called by the
chief executive officer, the Board of Directors or by shareholders holding not
less than 20% of the outstanding voting stock of the Company. Except as
otherwise provided in the resolutions of the Board of Directors establishing any
class or series of preferred stock, shareholders may not act by written consent
without a meeting.
VOTING
Holders of Common Stock and Series B Preferred Stock are, and holders of
Series A Preferred Stock will be, entitled to cast one vote per share on matters
submitted to a vote of shareholders, other than election or removal of
directors, which is subject to cumulative voting. In cumulative voting for
directors, each
21
<PAGE> 23
shareholder is entitled to a number of votes equal to the number of shares held
multiplied by the number of directors to be elected; the shareholder may cast
all such votes for a single director or may cast them for any or all of the
nominees in any manner the shareholder chooses. Each director will be elected
annually. Any director may be removed, with or without cause, at any meeting of
shareholders called expressly for that purpose, by a vote of the holders of a
majority of the outstanding shares entitled to vote in the election of such
director, except that, if less than the entire board is to be removed, no
director may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board.
Subject to the rights of the holders of the Series A Preferred Stock and
the Series B Preferred Stock and any additional voting rights that may be
granted to holders of future classes or series of stock and to the additional
voting requirements described in the next paragraph, the Company's Articles of
Incorporation require the affirmative vote of holders of a majority of the
outstanding shares entitled to vote thereon to approve any amendment to the
Articles of Incorporation, dissolution of the Company, sale of all or
substantially all the assets of the Company, share exchange or merger for which
a vote is required by the Texas Business Corporation Act.
The Articles of Incorporation of the Company contain an "equal price"
provision that applies to certain business combination transactions involving
any person or group that beneficially owns 20% or more of the aggregate voting
power of all of the outstanding stock of the Company (a "Related Person"). The
provision requires the affirmative vote of holders of at least 80% of the voting
stock of the Company to approve any merger, consolidation, sale or lease of all
or substantially all of the assets of the Company, issuance or transfer of the
Company's securities or certain other transactions involving the Related Person.
This voting requirement is not applicable to certain transactions, including (i)
any transaction in which the consideration to be received by the holders of each
class of stock is the same in form and amount as that paid in a tender offer in
which the Related Person acquired at least 50% of the outstanding shares of each
such class and which was consummated not more than one year earlier, (ii) any
other transaction that meets certain other specified pricing criteria or (iii)
any other transaction approved by the Company's continuing directors (as defined
in the Articles of Incorporation). This provision could have the effect of
delaying or preventing a change of control of the Company in a transaction or
series of transactions that did not satisfy the "equal price" criteria.
Approval of any other matter not described above that is submitted to the
shareholders requires the affirmative vote of the holders of a majority of the
shares entitled to vote represented at the meeting. The holders of a majority of
the shares entitled to vote shall constitute a quorum at meetings of
shareholders.
The Company's Bylaws provide that shareholders who wish to nominate
directors or to bring business before a shareholders' meeting must notify the
Company and provide certain pertinent information at least 80 days before the
meeting date (or within ten days after public announcement pursuant to the
Bylaws of the meeting date, if the meeting date has not been publicly announced
at least 90 days in advance).
LIMITATION OF DIRECTOR LIABILITY
The Articles of Incorporation of the Company contain a provision that
limits the liability of the Company's directors as permitted by the Texas
Business Corporation Act. The provision eliminates the personal liability of
directors to the Company, and its shareholders may be unable to recover monetary
damages against directors for negligent or grossly negligent acts or omissions
in violation of their duty of care. The provision does not change the liability
of a director for breach of his duty of loyalty to the Company or to
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, an act or omission for which the
liability of a director is expressly provided for by an applicable statute, or
in respect of any transaction from which a director received an improper
personal benefit. Pursuant to the Articles of Incorporation, the liability of
directors will be further limited or eliminated without action by shareholders
if Texas law is amended to further limit or eliminate the personal liability of
directors.
22
<PAGE> 24
PLAN OF DISTRIBUTION
The Issuers may sell the Securities in and/or outside the United States:
(i) through underwriters or dealers; (ii) directly to a limited number of
purchasers or to a single purchaser; or (iii) through agents. The Prospectus
Supplement with respect to the Securities will set forth the terms of the
offering of the Securities, including the name or names of any underwriters or
agents, the purchase price of the Securities and the proceeds to the Company
from such sale, any delayed delivery arrangements, any underwriting discounts
and other items constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Securities to be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters will be set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the Securities
will be subject to conditions precedent and the underwriters will be obligated
to purchase all the Securities if any are purchased.
If dealers are utilized in the sale of Securities in respect of which this
Prospectus is delivered, the Issuers will sell such Securities to dealers as
principals. The dealers may then resell such Securities to the public at varying
prices to be determined by such dealers at the time of resale. The names of the
dealers and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
The Securities may be sold directly by the Issuers or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Securities in respect to which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Prospectus Supplement arising thereto. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
The Securities may be sold directly by the Issuers to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any sale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, the Issuers will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Securities from the Issuers at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Issuers to indemnification by the Issuers against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Issuers
in the ordinary course of business.
The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for the Securities.
23
<PAGE> 25
LEGAL MATTERS
Certain legal matters in connection with the Securities offered hereby will
be passed upon for the Issuers by Baker & Botts, L.L.P. Robert L. Stillwell, a
partner of Baker & Botts, L.L.P., is a director of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1995
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
24
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses (other than underwriting discounts
and commissions) of the issuance and distribution of the securities being
registered payable by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $151,516
Printing and engraving expenses............................. 100,000
Accounting fees and expenses................................ 25,000
Counsel fees................................................ 75,000
Miscellaneous............................................... 98,484
--------
Total............................................. $450,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests,
(b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director of his good faith belief that he
has met the standard of conduct necessary for indemnification and a written
undertaking by or on behalf of the director to repay the amount if it is
ultimately determined that the director or officer is not entitled to
indemnification by the corporation. Texas law requires a corporation to
indemnify an officer or director against reasonable expenses incurred in
connection with the proceeding in which he is named defendant or respondent
because he is or was a director or officer if he is wholly successful in defense
of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.02-1.
The Company's Bylaws provide for the indemnification of its officers and
directors, and the advancement to them of expenses in connection with
proceedings and claims, to the fullest extent permitted by the Texas Business
Corporation Act. The Company has also entered into indemnification agreements
with its executive officers and directors that contractually provide for
indemnification and expense advancement. Both the Bylaws and the agreements
include related provisions meant to facilitate the indemnitees' receipt of such
benefits. These provisions cover, among other things: (i) specification of the
method of determining entitlement to indemnification and the selection of
independent counsel that will in some cases make such determination, (ii)
specification of certain time periods by which certain payments or
determinations must be made and actions must be taken and (iii) the
establishment of certain presumptions in favor of an indemnitee. The benefits of
certain of these provisions are available to an indemnitee only if there has
been a change in control (as defined). In addition, the Company carries
customary directors' and officers' liability insurance policies for its
directors and officers. Furthermore, the Bylaws and agreements with directors
and officers provide for indemnification for amounts (i) in respect of the
deductibles for such insurance policies, (ii) that exceed the liability limits
of such insurance policies and (iii) that would have been covered by prior
insurance policies of the Company or its predecessors. Such indemnification may
be made even though directors and
II-1
<PAGE> 27
officers would not otherwise be entitled to indemnification under other
provisions of the Bylaws or such agreements.
The above discussion of the Company's Bylaws and of Article 2.01-1 of the
Texas Business Corporation Act is not intended to be exhaustive and is
respectively qualified in its entirety by such statute and the Bylaws.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits a
corporation to indemnify any director or officer of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action, suit
or proceeding brought by reason of the fact that such person is or was a
director or officer of the corporation, if such person acted in good faith and
in a manner that he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, if he had no reason to believe his conduct was unlawful. In a
derivative action (i.e., one brought by or on behalf of the corporation),
indemnification may be made only for expenses actually and reasonably incurred
by any director or officer in connection with the defense or settlement of such
an action or suit, if such person acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
that the defendant is fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.
Delaware law also permits a corporation to purchase and maintain insurance
on behalf of any person who is or was a director or officer against any
liability asserted against him and incurred by him in such capacity or arising
out of his status as such, whether or not the corporation has the power to
indemnify him against that liability under Section 145 of the DGCL.
MOC's Bylaws provide that MOC may indemnify each person who is involved in
any litigation or other proceeding because such person is or was a director or
officer of MOC or its subsidiaries or is or was serving as an officer or
director of another entity at the request of MOC, against all expenses
reasonably incurred in connection therewith. Such indemnification shall be made
upon a determination by the Board of Directors, independent legal counsel or the
stockholders of the corporation that such indemnification is proper in the
circumstances because such person has met the applicable standard of conduct The
Bylaws also provide that MOC shall indemnify a director or officer against such
expenses to the extent that he has been successful on the merits or otherwise in
defense of any such litigation or other proceeding. The Bylaws also provide that
the right to indemnification includes the right to be paid expenses incurred in
defending any proceeding in advance of its final disposition; provided, however,
that such advance payment will only be made upon the delivery to MOC of an
undertaking, by or on behalf of the director or officer, to repay all amounts so
advanced if it is ultimately determined that such director or officer is not
entitled to indemnification.
MOC's Certificate of Incorporation provides that the personal liability of
a director of the corporation shall be limited to the fullest extent permitted
by the DGCL. Pursuant to Section 102(b)(7) of the DGCL, Article Sixth of MOC's
Certificate of Incorporation eliminates the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liabilities arising (i) from any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) from
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL or (iv) from any
transaction from which the director derived an improper personal benefit.
The above discussion of MOC's Bylaws and Certificate of Incorporation is
not intended to be exhaustive and is respectively qualified in its entirety by
such documents.
II-2
<PAGE> 28
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<C> <S>
4.1 -- Form of Senior Indenture among Mesa Operating Co., MESA
Inc. and Bankers Trust Company, as trustee.
4.2 -- Form of Subordinated Indenture among Mesa Operating Co.,
MESA Inc. and Bankers Trust Company, as trustee.
4.3 -- Form of Senior Indenture among Mesa Operating Co., MESA
Inc. and one or more banking institutions to be qualified
as Trustee pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939 (incorporated by reference to
Exhibit 4.1 except for name of Trustee)).
4.4 -- Form of Subordinated Indenture among Mesa Operating Co.,
MESA Inc. and one or more banking institutions to be
qualified as Trustee pursuant to Section 305(b)(2) of the
Trust Indenture Act of 1939 (incorporated by reference to
Exhibit 4.2 except for name of Trustee)).
5 -- Opinion of Baker & Botts, L.L.P.
*12 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Independent Public Accountants.
23.3 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5
to this Registration Statement).
*24 -- Powers of Attorney of directors and officers of MESA Inc.
26.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Bankers Trust Company
relating to the Senior Indenture.
26.2 -- Form T-I Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Bankers Trust Company
relating to the Subordinated Indenture.
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) of the Securities Act if, in
the aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
II-3
<PAGE> 29
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 Act
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 Act 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 ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-4
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 4th day of February,
1997.
MESA INC.
By: /s/ STEPHEN K. GARDNER
----------------------------------
Stephen K. Gardner
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ I. JON BRUMLEY* Chairman of the Board of February 4, 1997
- ----------------------------------------------------- Directors, Chief Executive
I. Jon Brumley Officer and President
/s/ STEPHEN K. GARDNER Senior Vice President and February 4, 1997
- ----------------------------------------------------- Chief Financial Officer
Stephen K. Gardner (Principal Financial
Officer)
/s/ WAYNE A. STOERNER* Controller (Principal February 4, 1997
- ----------------------------------------------------- Accounting Officer)
Wayne A. Stoerner
/s/ JOHN S. HERRINGTON* Director February 4, 1997
- -----------------------------------------------------
John S. Herrington
/s/ KENNETH A. HERSH* Director February 4, 1997
- -----------------------------------------------------
Kenneth A. Hersh
/s/ BOONE PICKENS* Director February 4, 1997
- -----------------------------------------------------
Boone Pickens
/s/ RICHARD E. RAINWATER* Director February 4, 1997
- -----------------------------------------------------
Richard E. Rainwater
/s/ PHILIP B. SMITH* Director February 4, 1997
- -----------------------------------------------------
Philip B. Smith
/s/ ROBERT L. STILLWELL* Director February 4, 1997
- -----------------------------------------------------
Robert L. Stillwell
</TABLE>
*By: /s/ STEPHEN K. GARDNER
-----------------------------------
Stephen K. Gardner
Attorney-in-Fact
II-5
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 4th day of February,
1997.
MESA OPERATING CO.
By: /s/ STEPHEN K. GARDNER
----------------------------------
Stephen K. Gardner
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ I. JON BRUMLEY* Chairman of the Board of February 4, 1997
- ----------------------------------------------------- Directors, Chief Executive
I. Jon Brumley Officer and President
/s/ DENNIS E. FAGERSTONE* Director, Senior Vice President February 4, 1997
- ----------------------------------------------------- and Chief Operating Officer
Dennis E. Fagerstone
/s/ STEPHEN K. GARDNER Director, Senior Vice President February 4, 1997
- ----------------------------------------------------- and Chief Financial Officer
Stephen K. Gardner (Principal Financial Officer)
/s/ WAYNE A. STOERNER* Controller (Principal Accounting February 4, 1997
- ----------------------------------------------------- Officer)
Wayne A. Stoerner
</TABLE>
*By: /s/ STEPHEN K. GARDNER
-------------------------------
Stephen K. Gardner
Attorney-in-Fact
II-6
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 -- Form of Senior Indenture among Mesa Operating Co., MESA Inc. and Bankers Trust
Company, as trustee.
4.2 -- Form of Subordinated Indenture among Mesa Operating Co., MESA Inc. and Bankers Trust
Company, as trustee.
4.3 -- Form of Senior Indenture among Mesa Operating Co., MESA Inc. and one or more banking
institutions to be qualified as Trustee pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939 (incorporated by reference to Exhibit 4.1 except for name of
Trustee)).
4.4 -- Form of Subordinated Indenture among Mesa Operating Co., MESA Inc. and one or more
banking institutions to be qualified as Trustee pursuant to Section 305(b)(2) of the
Trust Indenture Act of 1939 (incorporated by reference to Exhibit 4.2 except for
name of Trustee)).
5 -- Opinion of Baker & Botts, L.L.P.
*12 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Independent Public Accountants.
23.3 -- Consent of Baker & Botts, L.L.P. (included in Exhibit 5 to this Registration
Statement).
*24 -- Powers of Attorney of directors and officers of MESA Inc. (included on signature
pages to this Registration Statement).
26.1 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 of Bankers Trust Company relating to the Senior Indenture.
26.2 -- Form T-I Statement of Eligibility and Qualification under the Trust Indenture Act of
1939 of Bankers Trust Company relating to the Subordinated Indenture.
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 4.1
================================================================================
MESA OPERATING CO.,
AS ISSUER
MESA INC.,
AS GUARANTOR
and
BANKERS TRUST COMPANY,
Trustee
--------------------
SENIOR INDENTURE
Dated as of _____ __, ____
--------------------
Unsecured Senior Debentures, Notes and Other
Evidences of Indebtedness
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Section Indenture Section
<S> <C>
310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b)..................................................... 7.8; 7.10; 11.2
(c)..................................................... N.A.
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.5
(b)..................................................... 11.3
(c)..................................................... 11.3
313(a)..................................................... 7.6
(b)(1).................................................. N.A.
(b)(2).................................................. 7.6
(c)..................................................... 11.2
(d)..................................................... 7.6
314(a)..................................................... 4.2; 4.5; 11.2
(b)..................................................... N.A.
(c)(1).................................................. 11.4
(c)(2).................................................. 11.4
(c)(3).................................................. N.A
(d)..................................................... N.A.
(e)..................................................... 12.5
(f)..................................................... N.A.
315(a)..................................................... 7.1(2)
(b)..................................................... 7.5; 11.2
(c)..................................................... 7.1(1)
(d)..................................................... 7.1(3)
(e)..................................................... 6.11
316(a)(last sentence)...................................... 2.9
(a)(1)(A)............................................... 6.5
(a)(1)(B)............................................... 6.4
(a)(2).................................................. N.A.
(b)..................................................... 6.7
(c)..................................................... 11.12
317(a)(1).................................................. 6.8
(a)(2).................................................. 6.9
(b)..................................................... 2.4
318(a)..................................................... 11.1
</TABLE>
N.A. means Not Applicable.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.......................................................................... 1
SECTION 1.2. Other Definitions.................................................................... 5
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.................................... 5
SECTION 1.4. Rules of Construction................................................................ 5
ARTICLE 2 - THE SECURITIES
SECTION 2.1. Form and Dating...................................................................... 6
SECTION 2.2. Execution and Authentication......................................................... 8
SECTION 2.3. Registrar and Paying Agent........................................................... 9
SECTION 2.4. Paying Agent to Hold Money in Trust.................................................. 9
SECTION 2.5. Securityholder Lists................................................................. 9
SECTION 2.6. Transfer and Exchange................................................................ 10
SECTION 2.7. Replacement Securities............................................................... 10
SECTION 2.8. Outstanding Securities............................................................... 10
SECTION 2.9. Treasury Securities.................................................................. 10
SECTION 2.10. Temporary Securities; Global Securities.............................................. 11
SECTION 2.11. Cancellation......................................................................... 12
SECTION 2.12. Defaulted Interest................................................................... 12
ARTICLE 3 - REDEMPTION; SINKING FUND
SECTION 3.1. Notices to Trustee................................................................... 12
SECTION 3.2. Selection of Securities to be Redeemed............................................... 13
SECTION 3.3. Notice of Redemption................................................................. 13
SECTION 3.4. Effect of Notice of Redemption....................................................... 14
SECTION 3.5. Deposit of Redemption Price.......................................................... 14
SECTION 3.6. Securities Redeemed in Part.......................................................... 14
SECTION 3.7. Sinking Fund......................................................................... 14
SECTION 3.8. Terms of Securities to Govern........................................................ 15
ARTICLE 4 - COVENANTS
SECTION 4.1. Payment of Securities................................................................ 15
SECTION 4.2. SEC Reports.......................................................................... 15
SECTION 4.3. Certificate to Trustee............................................................... 15
SECTION 4.4. Maintenance of Office or Agency...................................................... 16
SECTION 4.5. Further Assurances................................................................... 16
ARTICLE 5 - SUCCESSORS
SECTION 5.1. When the Issuer May Merge, etc....................................................... 16
ARTICLE 6 - DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default.................................................................... 16
</TABLE>
-i-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.2. Acceleration......................................................................... 18
SECTION 6.3. Other Remedies....................................................................... 18
SECTION 6.4. Waiver of Past Defaults.............................................................. 19
SECTION 6.5. Control by Majority.................................................................. 19
SECTION 6.6. Limitation on Suits.................................................................. 19
SECTION 6.7. Rights of Holders to Receive Payment................................................. 19
SECTION 6.8. Collection Suit by Trustee........................................................... 20
SECTION 6.9. Trustee May File Proofs of Claim..................................................... 20
SECTION 6.10. Priorities........................................................................... 20
SECTION 6.11. Undertaking for Costs................................................................ 21
ARTICLE 7 - TRUSTEE
SECTION 7.1. Duties of Trustee.................................................................... 21
SECTION 7.2. Rights of Trustee.................................................................... 22
SECTION 7.3. Individual Rights of Trustee......................................................... 22
SECTION 7.4. Trustee's Disclaimer................................................................. 22
SECTION 7.5. Notice of Defaults................................................................... 22
SECTION 7.6. Reports by Trustee to Holders........................................................ 22
SECTION 7.7. Compensation and Indemnity........................................................... 22
SECTION 7.8. Replacement of Trustee............................................................... 23
SECTION 7.9. Successor Trustee by Merger, etc..................................................... 24
SECTION 7.10. Eligibility, Disqualification........................................................ 24
SECTION 7.11. Preferential Collection of Claims Against the Issuer................................. 25
ARTICLE 8 - DISCHARGE OF INDENTURE AND SECURITIES
SECTION 8.1. Satisfaction and Discharge of Indenture.............................................. 25
SECTION 8.2. Defeasance........................................................................... 25
SECTION 8.3. Satisfaction and Discharge of Securities............................................. 26
SECTION 8.4. Application by Trustee of Money or U.S. Government Obligations....................... 26
SECTION 8.5. Repayment of Money or U.S. Government Obligations by Paying Agent.................... 26
SECTION 8.6. Return of Money, Securities or U.S. Government Obligations........................... 26
ARTICLE 9 - AMENDMENTS
SECTION 9.1. Without Consent of Holders........................................................... 26
SECTION 9.2. With Consent of Holders.............................................................. 27
SECTION 9.3. Compliance with Trust Indenture Act.................................................. 27
SECTION 9.4. Effect of Consents................................................................... 27
SECTION 9.5. Notation on or Exchange of Securities................................................ 27
SECTION 9.6. Trustee Protected.................................................................... 27
ARTICLE 10 - THE GUARANTEES
SECTION 10.1. The Guarantees....................................................................... 28
SECTION 10.2. Execution and Delivery of Guarantees................................................. 28
SECTION 10.3. When the Issuer May Merge, etc....................................................... 29
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 10.4. "Trustee" to Include Paying Agent.................................................... 29
ARTICLE 11 - MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls......................................................... 30
SECTION 11.2. Notices.............................................................................. 30
SECTION 11.3. Communications by Holders with Other Holders......................................... 30
SECTION 11.4. Certificate and Opinion as to Conditions Precedent................................... 30
SECTION 11.5. Statements Required in Certificate or Opinion........................................ 30
SECTION 11.6. Rules by Trustee and Agents.......................................................... 31
SECTION 11.7. Legal Holidays....................................................................... 31
SECTION 11.8. No Recourse Against Others........................................................... 31
SECTION 11.9. Interest Limitation.................................................................. 31
SECTION 11.10. Duplicate Originals.................................................................. 32
SECTION 11.11. Addresses............................................................................ 32
SECTION 11.12. Record Date for Action by Securityholders............................................ 32
SECTION 11.13. Governing Law........................................................................ 32
SECTION 11.14. Payments for Consent................................................................. 32
SECTION 11.15. Effect of Headings and Table of Contents............................................. 33
SECTION 11.16. No Adverse Interpretation of Other Agreements........................................ 33
SECTION 11.17. Severability......................................................................... 33
SECTION 11.18. Successors........................................................................... 33
SECTION 11.19. Qualification of Indenture........................................................... 33
SECTION 11.20. Counterpart Originals................................................................ 33
</TABLE>
-iii-
<PAGE> 6
SENIOR INDENTURE, dated as of _________ ___, _____, among MESA
OPERATING CO., a corporation incorporated and existing under the laws of the
State of Delaware ("Operating"), as issuer, MESA INC., a corporation
incorporated and existing under the laws of the State of Texas (the "Company"),
as guarantor and BANKERS TRUST COMPANY, a New York banking corporation, as
trustee and not in its individual capacity (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of Operating's unsecured
senior debentures, notes and other evidences of indebtedness from time to time
authenticated and delivered pursuant to this Indenture, which may be issued in
one or more series, each such series ranking pari passu with each other series:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acquired Debt" means, with respect to any specified person
or any Subsidiary of such person (i) Indebtedness of any other person existing
at the time such other person is merged with or into or became a Subsidiary of
such specified person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other person merging with or into
or becoming a Subsidiary of such specified person, and (ii) Indebtedness
secured by a Lien encumbering any asset acquired by such specified person.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended to the extent the
lease payments during such extension period are required to be capitalized on a
balance sheet in accordance with GAAP).
"Board Resolution" means a copy of a resolution delivered to
the Trustee and certified (i) by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Company Board and to be in full force
and effect on the date of such certification and (ii) by the Secretary or
Assistant Secretary of Operating to have been duly adopted by the Operating
Board and to be in full force and effect on the date of such certification.
"Business Day" means any day that is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be required to be capitalized on a
balance sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and
-1-
<PAGE> 7
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Company" means MESA Inc., a Texas corporation, until a
successor replaces it and thereafter such successor.
"Company Board" means the board of directors of the Company
or any authorized committee of such board of directors.
"Debt", with respect to any person, means the following,
whether outstanding on the date hereof or thereafter created or incurred: (1)
any liability of such person (a) for borrowed money, (b) evidenced by a note,
bond, debenture or similar instrument (including a purchase money obligation)
given in connection with the acquisition of or exchange for any property or
assets (other than inventory or similar property acquired in the ordinary
course of business), including securities and other Debt or (c) in respect of
letters of credit issued for its account; (2) any liability of others described
in the preceding clause (1) which the person has guaranteed or which is
otherwise its legal liability or which is secured by assets of such person; and
(3) any amendment, renewal, extension or refunding of any such liability
described in the preceding clauses (1) and (2); provided, however, that "Debt"
of a person shall not include any liability of such person for compensation to
employees or for inventory or similar property acquired in the ordinary course
of business or for services.
"Default" means any event which is, or after notice or the
passage of time, or both, would be, an Event of Default.
"Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any successor thereto, which
shall be designated by the Issuer pursuant to Section 2.1 until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each person who is
then a Depositary hereunder, and if at any time there is more than one such
person, shall mean or include all such persons. "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of that series.
"Dollar-Denominated Production Payments" means production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of any date of determination.
"Global Security" means a Security registered in the name of
the Depositary or its nominee evidencing all or part of a series of Securities,
which is executed by the Issuer and authenticated and delivered to the
Depositary or pursuant to the Depositary's instructions, all in accordance with
this Indenture and pursuant to a written order of the Issuer signed by two
Officers of the Issuer.
"Guarantee" means each of the Guarantees of the Securities by
the Company hereunder.
"Guarantor" means the Company and its respective successors
and assigns.
"Holder" or "Securityholder" means a person in whose name a
Security is registered in the Security Register.
-2-
<PAGE> 8
"Indebtedness" means, with respect to any person, without
duplication, (a) any indebtedness of such person, whether or not contingent,
(i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or
similar instruments, (iii) evidenced by letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances, (iv) representing
Capital Lease Obligations, (v) representing the balance deferred and unpaid of
the purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable, (vi) representing any obligations in respect
of Interest Rate Hedging Agreements or Oil and Gas Hedging Contracts, and (vii)
in respect of any Production Payment, (b) all indebtedness of others of the
type referred to in clauses (a), (c), (d) or (e) secured by a Lien on any asset
of such person (whether or not such indebtedness is assumed by such person,
except that the amount of such indebtedness not assumed shall be deemed to be
the lesser of the value of such asset and the amount of such indebtedness so
secured), (c) obligations of such person in respect of production imbalances
and (d) Attributable Debt of such person, (e) Acquired Debt of such person and
(f) to the extent not otherwise included in the foregoing, the guarantee by
such person of any indebtedness of any other person, of the type referred to in
the preceding clauses (a), (c), (d) or (e).
"Indenture" means this Senior Indenture as amended or
supplemented from time to time pursuant to the applicable provisions of this
Indenture, and shall include the form and terms of each particular series of
Securities established pursuant to Section 2.1 hereof.
"Issuer" means Operating, until a successor replaces
Operating pursuant to the applicable provisions of this Indenture, and
thereafter such successor, as set forth in the form and terms of each
particular series of Securities established pursuant to Section 2.1 hereof.
"Interest Payment Date" means the date on which payment of an
installment of interest on the Securities of any series is due.
"Interest Rate Hedging Agreements" means, with respect to any
person, the obligations of such person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such person against fluctuations
in interest rates.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Maturity" when used with respect to any Security means the
date on which the Principal of such Security or an installment of Principal
becomes due and payable as therein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption, pursuant to a sinking fund
or otherwise.
"Officer" means, with respect to the Issuer or the Guarantor,
the Chairman of the Board, Vice Chairman of the Board, President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Issuer or the Guarantor, as the case may be, and who
is identified on the list of officers delivered by the Issuer or the Guarantor,
as the case may be, to the Trustee on the date hereof (as such list may be
modified or supplemented by the Issuer or the Guarantor from time to time
thereafter).
"Officers' Certificate" means a certificate signed by two
Officers of the Issuer and two Officers of the Guarantor.
"Oil and Gas Hedging Contracts" means any oil and gas
purchase or hedging agreement, and other agreement or arrangement, in each
case, that is designed to provide protection against oil and gas price
fluctuations.
-3-
<PAGE> 9
"Operating" means Mesa Operating Co., a Delaware corporation,
until a successor replaces it and thereafter such successor.
"Operating Board" means the board of directors of Operating
or any authorized committee of such board of directors.
"Opinion of Counsel" means a written opinion in form and
substance reasonably acceptable to the Trustee from legal counsel who is
reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Trustee, the Issuer or Guarantor.
"Original Issue Discount Security" means any Security which
provides for an amount less than the stated principal amount thereof to be due
and payable upon declaration of acceleration of the Stated Maturity thereof
pursuant to Section 6.2.
"person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Principal" of a Security means the principal of the
Security, plus the premium, if any, on the Security. In determining whether the
Holders of the requisite Principal amount of any series of Original Issue
Discount Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the Principal amount of any Original Issue
Discount Security 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 Stated Maturity thereof pursuant to
Section 6.2.
"Production Payments" means Dollar-Denominated Production
Payments and Volumetric Production Payments, collectively.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 2.1.
"Responsible Officer" means any officer within the Corporate
Trust and Agency Group, including, without limitations, any vice president,
assistant vice president, treasurer, assistant treasurer, assistant secretary,
special secretary, or any other responsible officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge or familiarity with the particular fact.
"SEC" means the Securities and Exchange Commission.
"Securities" means the unsecured senior debentures, notes and
other evidences of indebtedness (including any Global Securities) authenticated
and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Stated Maturity" when used with respect to any Security or
any installment of Principal thereof means the date specified in such Security
as the fixed date on which the Principal of such Security or such installment
of Principal is due and payable.
"Subsidiary" means, with respect to any person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that person (or a
-4-
<PAGE> 10
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such person or a Subsidiary of such
person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb) (together with any rules or regulations
promulgated thereunder) as in effect on the date first above written, except to
the extent that any subsequent amendment thereto shall retroactively apply to
this Indenture.
"Trustee" means the party named as such above, not in its
individual capacity but solely as Trustee under this Indenture, or any other
trustee appointed with respect to the Securities of any series as contemplated
by Section 2.1, in each case until a successor replaces it with respect to the
Securities of one or more series pursuant to the applicable provisions of this
Indenture, and thereafter with respect to the Securities of such one or more
series shall mean the successor.
"U.S. Government Obligations" means direct obligations of the
United States of America for the payment of which the full faith and credit of
the United States of America is pledged and which are not callable at the
issuer's option.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
SECTION 1.2. Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- ----------
<S> <C>
"Bankruptcy Law" ................................... 6.1
"Custodian" ........................................ 6.1
"Event of Default" ................................. 6.1
"Legal Holiday" .................................... 11.7
"Paying Agent" ..................................... 2.3
"Payment Default"................................... 6.1
"Registrar" ........................................ 2.3
"Security Register" ................................ 2.3
</TABLE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and the
Guarantor.
All other terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings assigned to them by such statute or rule, except as provided in
Section 7.10.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
-5-
<PAGE> 11
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
(6) "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision, and the terms "Article," "Section,"
"Exhibit" and "Schedule," unless otherwise specified or indicated by
the context in which used, mean the corresponding Article or Section
of, or the corresponding Exhibit or Schedule to, this Indenture; and
(7) references to agreements and other instruments include
subsequent amendments, supplements and waivers to such agreements or
instruments but only to the extent not prohibited by this Indenture.
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating. The Securities of each series shall be
in such form as shall be established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and in case such form is not established by supplemental
indenture, such form shall be approved by the Trustee if the Trustee's rights
or obligations are affected thereby, and such form may further have such
legends, notations or endorsements as may be required by law, stock exchange
rules or usage.
Each Security shall be in fully-registered form and shall be dated the
date of its authentication.
The Securities may be issued in one or more series. There shall be
established by or pursuant to a Board Resolution, and set forth in an Officers'
Certificate delivered to the Trustee, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series, the
following terms with respect to such series, and thereafter such terms shall be
deemed to be a part of this Indenture (it being understood and agreed that, in
the case of any terms to be established by or pursuant to a Board Resolution
which, if established, would affect the rights, duties, obligations,
liabilities or immunities of the Trustee, such terms shall not be deemed to be
a part of the Indenture unless and until they shall have been approved by the
Trustee):
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from all other Securities);
(2) any limit upon the aggregate Principal amount of the
Securities of such series which may be authenticated and delivered
under this Indenture (except for Securities of such series
authenticated and delivered upon transfer of, or in exchange for, or
in lieu of, other Securities of such series pursuant to Section 2.6,
2.7, 2.10, 3.6 or 9.5);
(3) the date or dates on which the Principal of the
Securities of such series is payable or the manner of determining such
date or dates;
-6-
<PAGE> 12
(4) the rate or rates at which the Securities of such series
shall bear interest, if any, or the method or methods of calculating
such rate or rates of interest and the date or dates from which such
interest shall accrue;
(5) the Interest Payment Dates on which such interest shall
be payable and the Regular Record Dates for the interest payable on
any Interest Payment Date;
(6) the place or places where the Principal of and interest
on the Securities of such series shall be payable or the method of
paying Principal of and interest on the Securities of such series;
(7) the period or periods within which, the price or prices
at which, and the terms and conditions upon which Securities of such
series may be redeemed, in whole or in part, at the option of the
Issuer;
(8) the obligation, if any, of the Issuer to redeem or
purchase Securities of such series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which, and the
terms and conditions upon which Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities shall be
issuable;
(10) if Securities of such series constitute Original Issue
Discount Securities, the portion of the Principal amount of Securities
which shall be payable upon declaration of acceleration thereof
pursuant to Section 6.2;
(11) any covenants of the Issuer or the Guarantor, for the
benefit of the Holders of Securities of such series, in addition to
those set forth in Article 4 and Article 10, respectively;
(12) any Events of Default with respect to the Securities of
such series in addition to those set forth in Section 6.1;
(13) whether the Securities of such series shall be issued,
in whole or in part, in the form of one or more Global Securities and,
in such case, the Depositary for such Global Security or Securities;
(14) the identity of any trustee, authenticating agent,
Paying Agent or Registrar with respect to the Securities of such
series, if other than the Trustee;
(15) the period or periods within which, the price or prices
at which, and the terms and conditions upon which Securities of such
series may be converted into other securities of an Issuer; and
(16) any other terms with respect to the Securities of such
series (which terms 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 by or
pursuant to the Board Resolution and set forth in the Officers' Certificate
delivered to the Trustee or as provided pursuant to an indenture supplemental
hereto with respect to such series. All Securities of any one series need not
be issued at the same time, and unless otherwise provided, a series may be
reopened for issuance of additional Securities of such series.
-7-
<PAGE> 13
SECTION 2.2. Execution and Authentication. An Officer the Issuer shall
sign the Securities of such series for the Issuer by manual or facsimile
signature and the seal of the Issuer shall be reproduced on the Securities and
attested by the manual or facsimile signature of an authorized Officer of the
Issuer.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall be valid
nevertheless.
A Security shall not be valid until authenticated by the Trustee by
manual signature. The Trustee's certificate of authentication of all Securities
shall be in substantially the following form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Bankers Trust Company, as Trustee
By:
------------------------------
Authorized Signatory
The manual signature of the Trustee on a certificate of authentication
in the form hereinabove provided for shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall at any time and from time to time authenticate
Securities for original issue, upon a written order of the Issuer signed by two
Officers of the Issuer.
In authenticating Securities of a particular series, and accepting the
additional responsibilities under this Indenture in relation to such series of
Securities, the Trustee shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon:
(1) certified copies of the charter and bylaws of the Issuer;
(2) each Board Resolution relating to the Securities of such
series, and if the form or forms of the Securities of such series and
the terms with respect thereto are established by a Board Resolution,
an Officers' Certificate (i) approving the form or forms of the
Securities of such series and the terms with respect thereto, to the
extent such terms have been established (and, if the Securities of
such series are Original Issue Discount Securities, setting forth such
facts as are necessary to compute amounts due upon acceleration, if
such facts are not specified in the form of Security) and (ii) stating
that all conditions precedent to the issuance and authentication of
the Securities of such series have been complied with;
(3) an executed supplemental indenture (if any) relating to
such Securities;
(4) an Opinion of Counsel, which shall state
(a) that the terms with respect to the Securities
of such series have been established by or pursuant to a
Board Resolution or by a supplemental indenture as permitted
by, and in conformity with, the provisions of this Indenture;
(b) that the Securities of such series, when
authenticated and delivered by the Trustee and issued by the
Issuer in the manner and subject to any further conditions
specified in such Opinion of Counsel that are reasonably
acceptable to the Trustee, will constitute a valid and
binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms, except insofar as (i)
such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally
and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject
-8-
<PAGE> 14
to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought; and
(c) that all conditions precedent to the execution
and delivery by the Issuer of the Securities have been
complied with; and
If all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate or the
Opinion of Counsel otherwise required pursuant to Section 2.1 and this Section
2.2 at or prior to the time of authentication of each Security of such series
if such documents have been delivered at or prior to the authentication upon
original issuance of the first Security of such series.
The Trustee shall not be required to authenticate any Securities if
such action may not lawfully be taken or will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture in a manner which
is not reasonably acceptable to the Trustee.
The aggregate Principal amount of Securities of any series outstanding
at any time may not exceed any limit upon the maximum Principal amount for such
series set forth in or pursuant to the Board Resolution or supplemental
indenture relating to such series delivered pursuant to this Section 2.2,
except as authorized pursuant to Section 2.7.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so, provided that only the Trustee may
authenticate Securities pursuant to Section 2.7. Each reference in this
Indenture to authentication by the Trustee includes authentication by an
authenticating agent. An authenticating agent has the same rights as an Agent
to deal with the Issuer or an Affiliate of the Issuer.
SECTION 2.3. Registrar and Paying Agent. The Issuer shall maintain an
office or agency where Securities may be presented to the registrar
("Registrar") for registration of transfer or for exchange and an office or
agency where Securities may be presented to the paying agent ("Paying Agent")
for payment; provided, however, that at the option of the Issuer payment of
interest may be made by check mailed on or before the due date to the address
of the person entitled thereto as such address shall appear in the register of
the Securities provided for in this Section. The Registrar shall keep a
register of the Securities (the "Security Register") and of their transfer and
exchange. The Issuer may appoint one or more co-registrars and one or more
additional paying agents with respect to any one or more series. The
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Issuer shall notify the Trustee of the name and
address of any Registrar or Paying Agent not a party to this Indenture. If the
Issuer fails to maintain a Registrar or Paying Agent for the Securities, the
Trustee shall act as such. The Issuer initially appoints the Trustee as Paying
Agent and Registrar.
SECTION 2.4. Paying Agent to Hold Money in Trust. The Issuer shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will (i) hold in trust for the benefit of Securityholders of any
series or the Trustee all money held by the Paying Agent for the payment of
Principal of or interest on the Securities of such series, (ii) notify the
Trustee of any default by the Issuer in making any such payment and (iii) pay
to the Trustee all sums so held in trust by such Paying Agent, upon written
request of the Trustee at any time during the continuance of an Event of
Default. If the Issuer acts as Paying Agent, it shall segregate the money and
hold it as a separate trust fund. The Issuer at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so, the Paying
Agent shall have no further liability for the money.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of Securities of each series. If the
Trustee is not the Registrar with respect to Securities of any series, the
Issuer shall furnish to the Trustee on or before each Interest Payment Date for
such Securities (and on dates to be determined in the manner provided in
Section 2.1 for any series of Original Issue Discount Securities which by their
terms bear interest only after Maturity), but in no case less frequently than
semiannually, and at such other times as the Trustee may request in writing, a
list
-9-
<PAGE> 15
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders of the Securities of such series.
SECTION 2.6. Transfer and Exchange. Subject to the provisions of
Section 2.10, where Securities are presented to the Registrar with a request to
register transfer or to exchange them for an equal Principal amount of
Securities of the same series of other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. The Registrar shall not be required to register the
transfer or exchange of (i) Securities of any series during a 15-day period
beginning at the opening of business 15 days before the day of mailing of a
redemption notice pursuant to Section 3.3 with respect to Securities of such
series or (ii) any Security selected for redemption in whole or in part, except
the unredeemed portion of a Security redeemed in part. Every Security presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Holder or his attorney duly authorized in
writing, along with a certification of non-foreign status duly executed by the
transferee of such Security. Each Security surrendered for registration of
transfer and exchange shall be cancelled and subsequently disposed of by the
Trustee in accordance with its customary practice. To permit registration of
transfer and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made to any Securityholder for
any transfer or exchange of Securities, except that the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge which
may be imposed in relation to any such transfer or exchange, other than
exchanges pursuant to Section 2.10, 3.6 or 9.5. Notwithstanding the foregoing,
Securities of a series may be exchanged only for Securities of the same series
having identical terms.
SECTION 2.7. Replacement Securities. If the Holder of a Security
claims that the Security has been lost, mutilated, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such lost, mutilated, destroyed or wrongfully
taken Security, a replacement Security of the same series having identical
terms if the Trustee's requirements are met. If required by the Trustee or the
Issuer, such Holder shall provide an indemnity bond sufficient in the judgment
of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent or
any authenticating agent from any loss which any of them may suffer if a
Security is replaced. In connection with the issuance of any replacement
Security under this Section, the Trustee or the Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any replacement Security issued
pursuant to this Section shall constitute conclusive evidence of ownership of
such Security, as if originally issued, regardless of whether the lost,
mutilated, destroyed or wrongfully taken Security shall be found at any time.
SECTION 2.8. Outstanding Securities. The Securities
outstanding at any time are all the Securities authenticated by the Trustee,
except for those cancelled by it, those delivered to it for cancellation, and
those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.1, they cease to be
outstanding and interest on them ceases to accrue.
Subject to the provisions of Section 2.9, a Security does not cease to
be outstanding because the Issuer or an Affiliate of the Issuer holds the
Security.
SECTION 2.9. Treasury Securities. In determining whether the Holders
of the required Principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Issuer or an Affiliate of the Issuer
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
-10-
<PAGE> 16
SECTION 2.10. Temporary Securities; Global Securities.
(1) Until definitive Securities are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities of any series shall be substantially
in the form of definitive Securities of such series but may have
variations that the Issuer considers appropriate for temporary
Securities. Without unreasonable delay, the Issuer shall prepare and
the Trustee shall authenticate definitive Securities of such series in
exchange for such temporary Securities. Until so exchanged, Holders of
Temporary Securities of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of
such series.
(2) If the Issuer shall establish pursuant to Section 2.1
that the Securities of a series are to be issued in whole or in part
in the form of one or more Global Securities, then the Issuer shall
execute and the Trustee shall, in accordance with Section 2.1 and
pursuant to a written order of the Issuer signed by two Officers of
the Issuer, authenticate and deliver one or more Global Securities in
temporary or permanent form that (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 one or
more Global Securities, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction and (iv) shall
bear any customary legend reasonably required by the Depositary and
shall further bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities
in definitive form, this 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."
Notwithstanding any other provision of this Section 2.10 or Section
2.6, unless and until it is exchanged in whole or in part for Securities in
definitive form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series 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 such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
None of the Issuer, the Trustee, any Paying Agent or the Registrar has
any direct obligation or responsibility to participants of the Depositary or
beneficial owners of interests in Securities. Without limiting the generality
of the foregoing, none of the Issuer, the Trustee, any Paying Agent or the
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security (including the maintenance, review and
supervision of any such records), for the delivery of any notice to any owner
of a beneficial interest, for the selection of the beneficial owners to receive
payment in the event of any partial redemption of Securities, or for any
consent given or other action taken by the Depositary as owner of the
Securities.
If at any time the Depositary for the Securities of a series notifies
the Issuer that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for Securities of a
series shall no longer be registered or in good standing under the Exchange Act
or other applicable statute or regulation, the Issuer shall appoint a successor
Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Issuer
within 90 days after the Issuer receives such notice or becomes aware of such
condition, the Issuer will execute, and the Trustee, upon receipt of a written
order of the Issuer signed by two Officers of the Issuer instructing the
Trustee to authenticate and deliver definitive Securities of such series, will
authenticate and deliver Securities of such series in definitive form in an
aggregate Principal amount equal to the Principal amount of the Global Security
or Securities representing such series in exchange for such Global Security or
Securities.
-11-
<PAGE> 17
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or
Securities. Furthermore, if there shall have occurred and be continuing an
Event of Default or a Default with respect to any series of Securities, the
Trustee may determine that the Securities of such series shall no longer be
represented by a Global Security or Securities. In any such event, the Issuer
will execute, and the Trustee, upon receipt of a written order of the Issuer
signed by two Officers of the Issuer instructing the Trustee to authenticate
and deliver definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive form in an aggregate Principal amount
equal to the Principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.
If specified by the Issuer pursuant to Section 2.1 with respect to
Securities of a series, the Depositary for such series of Securities may
surrender a Global Security for such series of Securities in exchange, in whole
or in part, for Securities of such series in definitive form on such terms as
are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute and the Trustee shall authenticate and deliver, without charge:
(i) to each person specified by the Depositary, a new
Security or Securities of the same series of any authorized
denomination as requested by such person in an aggregate Principal
amount equal to and in exchange for such person's beneficial interest
in the Global Security; and
(ii) to the Depositary, a new Global Security in a
denomination equal to the difference, if any, between the Principal
amount of the surrendered Global Security and the aggregate Principal
amount of Securities delivered to Holders thereof.
Upon the exchange of a Global Security for Securities in definitive
form, such Global Security shall be cancelled by the Trustee. Securities issued
in exchange for a Global Security pursuant to this Section 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. The Trustee shall
deliver such Securities to the persons in whose names such Securities are so
registered.
SECTION 2.11. Cancellation. The Issuer at any time may deliver
Securities of any series to the Trustee for cancellation. The Registrar and
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of cancelled Securities as the Issuer directs.
The Issuer may not issue new Securities of any series to replace Securities of
such series that have been paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment
of interest on any of the Securities, they shall pay the defaulted interest
plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the persons who are Holders of such Securities on a subsequent
special record date. The Issuer shall fix the record date and payment date
after making arrangements satisfactory to the Trustee for the deposit of such
amounts with the Trustee for payment and after consultation with the Trustee
regarding the selection of such dates. At least 15 days before the record date,
the Issuer shall mail to the Holders of such Securities a notice that states
the record date, payment date, and amount of interest to be paid.
ARTICLE 3
REDEMPTION; SINKING FUND
SECTION 3.1. Notices to Trustee. The Issuer may elect to redeem
Securities of any series in accordance with the provisions of such Securities;
provided, however, that if an Event of Default shall have occurred and be
continuing, the Securities of any series may not be redeemed in whole or in
part, unless (i) the Securities of all series
-12-
<PAGE> 18
are redeemed in whole or (ii) the Securities of all series are redeemed in part
and the Principal amount to be redeemed is prorated among all Holders so that
all Holders of each series receive in redemption of their outstanding
Securities the same Principal amount per $1,000 of Securities (provided,
however, that if the Securities of any such series are Original Issue Discount
Securities, for purposes of this clause (ii), such proration shall be based
upon each $1,000 that would be due and payable on the redemption date in the
event of a declaration of acceleration of the Stated Maturity thereof pursuant
to Section 6.2). The election of the Issuer to redeem Securities of any series
in accordance with the provisions of such Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
the Issuer, the Issuer shall, at least 45 days before the redemption date
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such redemption date and in the case of any redemption of less than
all of the Securities of any series (or, where redemption provisions of any
series of Securities are not identical as to each Security within the series,
in case of any redemption at the election of the Issuer of less than all the
Securities with identical redemption provisions) the Principal amount of the
Securities of such series to be redeemed and shall deliver to the Trustee such
documentation and records as shall enable the Trustee to select the Securities
to be redeemed pursuant to Section 3.2.
SECTION 3.2. Selection of Securities to be Redeemed. If less than all
of the Securities of a series (or, where the redemption provisions of any
series of Securities are not identical as to each Security within the series,
if less than all the Securities with identical redemption provisions) are to be
redeemed, the Trustee shall, subject to Section 3.1, select the Securities to
be redeemed by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection not more than 45 days before the redemption
date from outstanding Securities of such series (or, if the redemption
provisions of all of the Securities of such series are not identical, from
Securities of such series with identical redemption provisions) not previously
called for redemption. The Trustee may select for redemption portions of the
Principal of Securities of any series that have denominations larger than the
minimum Principal denomination for such series. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.3. Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Trustee shall, in the name of the Issuer
and at the Issuer's expense, mail a notice of redemption to each Holder whose
Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price plus accrued interest, if any;
(3) the name and address of the Paying Agent;
(4) if less than all the outstanding Securities of a series
(or, in the case of series of Securities in which the redemption
provisions are not identical as to each Security within the series,
less than all of the Securities of a series with identical redemption
provisions) are to be redeemed, the identification (and, in the case
of partial redemption, the Principal amounts) of the particular
Securities to be redeemed;
(5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that interest on Securities called for redemption ceases
to accrue on and after the redemption date; and
(7) that the redemption is pursuant to the terms of a sinking
fund, if such is the case.
-13-
<PAGE> 19
SECTION 3.4. Effect of Notice of Redemption. Once notice of a
redemption is mailed, Securities called for redemption become due and payable
on the redemption date at the redemption price. Upon surrender to the Paying
Agent, such Securities shall be paid and redeemed at the redemption price,
together with interest accrued thereon to the redemption date; provided,
however, that installments of interest becoming due on or prior to the
redemption date shall be payable to the Holders of such Securities, or one or
more previous Securities evidencing all or a portion of the same debt as that
evidenced by such particular Securities, registered as such at the close of
business on the relevant record date according to their terms and the
provisions of Section 2.12.
SECTION 3.5. Deposit of Redemption Price. On or before the redemption
date, the Issuer shall deposit with the Paying Agent money sufficient to pay
the aggregate redemption price of and accrued interest on all Securities to be
redeemed on that date.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Issuer shall execute and the Trustee shall
authenticate without service charge for the Holder a new Security of the same
series, having terms identical to those of the Securities surrendered, equal in
Principal amount to the unredeemed portion of the Security surrendered. If a
Global Security is so surrendered, such new Security so issued shall be a new
Global Security.
SECTION 3.7. Sinking Fund. Each sinking fund payment provided for by
the terms of Securities of any series shall be applied to the redemption of
such Securities as provided for by the terms of such Securities and this
Section 3.7.
In satisfaction of any minimum or optional sinking fund payment
required or permitted to be made pursuant to the terms of Securities of any
particular series (or, where the sinking fund provisions of each Security
within such series are not identical, then pursuant to the terms of the
Securities with identical sinking fund provisions), the Issuer may (i) deliver
to the Trustee Securities of that series (or, where the sinking fund provisions
of the Securities of such series are not identical, Securities of that series
having identical sinking fund provisions) which have not previously been called
for redemption and which the Issuer has not previously delivered to the Trustee
for cancellation or (ii) notify the Trustee of its election to credit against
the required sinking fund payment the Principal amount of any Securities of
that series (or, if applicable, any Securities of that series with identical
sinking fund provisions) which have been redeemed otherwise than pursuant to
minimum sinking fund payment requirements with respect to the Securities of
such series (or, if applicable, with respect to the Securities of such series
with identical sinking fund provisions); provided, however, 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 for redemption through operation of the sinking
fund and the amount of such minimum or optional sinking fund payment shall be
reduced accordingly.
Not less than 45 days prior to each sinking fund payment date (unless
a shorter notice shall be satisfactory to the Trustee) for any particular
series of Securities (or, where the sinking fund provisions of the Securities
within such series are not identical, for the Securities of such series having
identical sinking fund provisions), the Issuer will give written notice to the
Trustee of the amount of the next succeeding sinking fund payment (including
any optional sinking fund payment which is permitted to be made by the terms of
the Securities) for that series pursuant to the terms of that series (or, if
applicable, for such Securities pursuant to the terms of such Securities), the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by crediting Securities
against the required sinking fund payment pursuant to the preceding paragraph
of this Section and will also deliver to the Trustee any Securities to be so
credited. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.2 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Issuer in the manner provided in Section 3.3. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.4 and 3.6.
-14-
<PAGE> 20
SECTION 3.8. Terms of Securities to Govern. Notwithstanding any other
provision of this Article 3, if any provision of any Security of any series
shall conflict with any provision of this Article, the provision of such
Security shall govern.
ARTICLE 4
COVENANTS
SECTION 4.1. Payment of Securities. The Issuer shall pay the Principal
of and any interest on the Securities on the dates and in the manner provided
in the Securities. Principal and interest shall be considered paid on the date
due if the Paying Agent holds on that date, by 10:00 a.m. New York City time,
money deposited with it by or on behalf of the Issuer sufficient in immediately
available funds to pay all Principal and interest then due.
The Issuer shall pay interest on overdue Principal at the rate borne
by such Securities or otherwise as provided in the Securities; they shall pay
interest on overdue installments of interest at the same rate to the extent
permitted by law.
Each payment by the Issuer to the Trustee or the Paying Agent shall be
accompanied by a written notice from the Issuer that specifies the series to
which such payment relates.
SECTION 4.2. SEC Reports. The Issuer and the Guarantor shall furnish
to the Trustee, within 15 days after they file them with the SEC, 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 SEC may by rules and
regulations prescribe) that such Issuer or Guarantor is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event that
the Issuer or Guarantor is not permitted to file such reports, documents and
information with the SEC, the Issuer or the Guarantor, as the case may be, will
provide substantially similar information to the Issuer, the Holders and
prospective Holders (upon request) as if the Issuer or the Guarantor, as the
case may be, were subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act. The Issuer and the Guarantor also shall comply with the
other provisions of TIA ss. 314(a). Provided that the Issuer and the Guarantor
are consolidated entities for accounting purposes, the Issuer shall be deemed
to have satisfied the provisions of this Section 4.2 if the Guarantor files and
provides information, documents, and other reports of the types otherwise so
required, in each case within the applicable rules and regulations of the SEC
(after giving effect to any exemptive relief) because of the filings by the
Guarantor.
SECTION 4.3. Certificate to Trustee.
(1) The Issuer and the Guarantor covenants and agrees to
furnish to the Trustee, within 90 days after the end of each fiscal
year of the Issuer, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer
of the Issuer and the Guarantor, as the case may be, as to each of
such officer's knowledge of the Issuer's and the Guarantor's
compliance with all conditions and covenants under this Indenture and
is not in default in the performance or observance of any terms,
provisions and condition in this Indenture; provided, for purposes of
this paragraph, such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Indenture.
(2) The Issuer and the Guarantor shall, so long as any of the
Securities are outstanding, deliver to the Trustee, within five
Business Days of any Officer becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuer or the Guarantor, as the case may
be, is taking or proposes to take with respect thereto.
-15-
<PAGE> 21
SECTION 4.4. Maintenance of Office or Agency. The Issuer will maintain
in The City of New York, an office or agency of the Trustee, Registrar and
Paying Agent where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer, exchange,
purchase or redemption, and where notices and demands to or upon the Issuer in
respect of the Securities and this Indenture may be served. The Issuer shall
give prompt written notice to the Trustee of the location, and of any change in
the location, of any such office or agency (other than a change in the location
of the office of the Trustee). If at any time the Issuer shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 11.11.
SECTION 4.5. Further Assurances. From time to time whenever reasonably
requested by the Trustee, the Issuer will make, execute and deliver, or cause
to be made, executed or delivered, any and all such further and other
instruments and assurances as may be reasonably necessary or proper to carry
out the intention of or to facilitate the performance of the terms of this
Indenture or to secure the rights and remedies of the Holders of Securities of
any series provided for in this Indenture, including, but not limited to,
furnishing all necessary information to the Trustee in connection with
calculations and tax reporting relating to any Original Issue Discount
Securities that may be issued by the Issuer hereunder.
ARTICLE 5
SUCCESSORS
SECTION 5.1. When the Issuer May Merge, etc. The Issuer shall not
consolidate or merge into, or sell, assign, transfer or lease all or
substantially all of its assets to, any person unless:
(1) the person is a corporation organized and existing under
the laws of the United States of America or any State thereof or the
District of Columbia;
(2) the person assumes by supplemental indenture all the
obligations of the Issuer under the Securities and this Indenture;
(3) immediately after the transaction no Default or Event of
Default shall exist; and
(4) an Officers' Certificate and Opinion of Counsel have been
delivered to the Trustee to the effect that the conditions set forth
in the preceding clauses (1) through (3) above have been met.
The corporation formed by or resulting from any such consolidation or
merger, or which shall have received all or substantially all of such assets,
shall succeed to and be substituted for the Issuer with the same effect as if
it had been named herein as a party hereto, and thereafter, except in the case
of a lease of all or substantially all of such assets, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities and the Issuer may thereafter liquidate and
dissolve.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" with respect to
Securities of any series occurs if:
-16-
<PAGE> 22
(1) there is a default in the payment of interest, if any, on
any Security of such series when the same becomes due and payable and
the Default continues for a period of 30 days;
(2) there is a default in the payment of the Principal of or
premium, if any, on any Security of such series when the same becomes
due and payable at Maturity, upon redemption or otherwise;
(3) the Issuer fails to observe or perform any covenant,
condition or agreement on the part of such Issuer to be observed or
performed pursuant to Article 5 hereof;
(4) the Issuer fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities of such
series or this Indenture (other than a covenant included in this
Indenture solely for the benefit of any series of Securities other
than such series or a covenant which has not been breached with
respect to such series) and the Default continues for consecutive days
after the notice specified below;
(5) except as permitted herein, any Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or the Guarantor,
or any person acting on behalf of the Guarantor, shall deny or
disaffirm the Guarantor's obligation under its Guarantee;
(6) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Issuer
or the Guarantor (including a default with respect to Securities of
any series other than such series), whether such Indebtedness now
exists or shall be created hereafter, which default (a) is caused by a
failure to pay such Indebtedness prior to the expiration of the grace
period after final maturity (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its final maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there is then existing a Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million or more; provided, that
if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 10 days
from the continuation of such default beyond the applicable grace
period or the occurrence of such acceleration, as the case may be,
such Event of Default under the Indenture and any consequential
acceleration of any Securities of such series shall be automatically
rescinded;
(7) a final judgment or order or final judgments or orders
are rendered against the Issuer that are unsatisfied and that require
the payment of money, either individually or in an aggregate amount,
that is more than $10.0 million over the coverage under applicable
insurance policies and either (a) a creditor has commenced an
enforcement proceeding upon such judgment (other than a judgment that
is stayed by reason of pending appeal or otherwise) or (b) a 60-day
period transpired during which a stay of such judgment, order,
judgments or orders (by reason of pending appeal or otherwise) was not
in effect;
(8) the Issuer or the Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of an order for relief against
it in an involuntary case or proceeding,
(c) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(d) makes a general assignment for the benefit of its
creditors;
-17-
<PAGE> 23
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Issuer or the Guarantor in
an involuntary case or proceeding,
(b) appoints a Custodian of the Issuer or the Guarantor
for all or substantially all of the property of the Issuer or
the Guarantor, or
(c) orders the liquidation of the Issuer or the
Guarantor,
and in each case the order or decree remains unstayed and in
effect for 60 consecutive days.
(10) there occurs any other Event of Default with respect to
the Securities of such series specified in the terms of such series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee notifies the Issuer, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities of such series notify the
Issuer and the Trustee, of the Default and the Issuer does not cure the Default
within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 6.2. Acceleration. If an Event of Default (other than an Event
of Default specified in clauses (8) and (9) of Section 6.1 hereof) with respect
to the Securities of any series occurs and is continuing, the Trustee by notice
to the Issuer, or the Holders of at least 25% in Principal amount of the then
outstanding Securities of that series by written notice to the Issuer and the
Trustee, may declare the Principal (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) of and any accrued and unpaid
interest on all the Securities of that series to be due and payable
immediately. Upon such declaration, the Principal (or specified amount) of and
accrued interest on all the Securities of that series shall be due and payable
immediately. Notwithstanding the foregoing, if any Event of Default specified
in clause (8) or (9) of Section 6.1 hereof relating to the Issuer occurs, such
an amount shall ipso facto become and be immediately due and payable without
any declaration or other act or notice on the part of the Trustee or any
Holder.
After a declaration of acceleration with respect to the Securities of
any series under this Indenture, but before a judgment or decree for payment of
principal, premium, if any, and interest on the Securities of such series due
under this Article 6 has been obtained by the Trustee, Holders of a majority in
principal amount of the then outstanding Securities of such series by written
notice to the Issuer and the Trustee may rescind an acceleration and its
consequences if (i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay (a) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and (b) all overdue interest on the
Securities of such series, if any, (ii) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (iii) all
existing Events of Default (except nonpayment of principal, premium, if any, or
interest that has become due solely because of the acceleration) have been
cured or waived.
SECTION 6.3. Other Remedies. If an Event of Default with respect to
the Securities of any series occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of Principal of or interest on the
Securities of that series or to enforce the performance of any provision of the
Securities of that series or this Indenture.
-18-
<PAGE> 24
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.4. Waiver of Past Defaults. Holders of not less than a
majority in outstanding Principal amount of the Securities of any series then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Securities of that series waive an existing Default or Event of Default with
respect to that series and its consequences hereunder, except a continuing
Default or Event of Default in the payment of principal of, premium and
liquidated damages, if any, or interest on, the Securities of that series
(including in connection with an offer to purchase) (provided, however, that
the Holders of a majority in outstanding Principal amount of the then
outstanding Securities of such series may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default with respect to such series
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default with respect to such
series or impair any right consequent thereon.
SECTION 6.5. Control by Majority. The Holders of a majority in
aggregate outstanding Principal amount of the Securities of all series affected
(voting as one class) may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to the Securities of such series. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, is unduly prejudicial to the rights of another Securityholder of
such series or any other series, or would involve the Trustee in personal
liability it being understood that the Trustee shall have no duty to ascertain
whether or not such actions or forebearances are unduly prejudicial to such
Holders.
SECTION 6.6. Limitation on Suits. A Holder of Securities of any series
may pursue a remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to Securities of that series;
(2) the Holders of at least 25% in Principal amount of the
Securities of that series make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period, the Holders of a majority in
aggregate outstanding Principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the
request;
provided, however, that it is understood and intended, and is expressly
covenanted by each Holder of every Security of a series with every other Holder
and the Trustee, that no Holders of such series of Securities shall have any
right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the Holders of any
other series of Securities, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of Principal of and interest on the Security, on
-19-
<PAGE> 25
or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) with respect to Securities occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuer for the whole amount of Principal (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 accrued interest remaining unpaid, together with interest on
overdue Principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest with respect to the Securities as
to which an Event of Default has occurred, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including appeals and
including, without limitation, the reasonable compensation, expenses,
disbursements of the Trustee, its agents and counsel.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in any
judicial proceedings relative to the Issuer, its creditors or its property and
shall be entitled and empowered to collect and receive any money or other
property payable or deliverable on any such claims and to distribute the same,
and any custodian in any such judicial proceedings is authorized hereby by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due to the Trustee under Section 7.7. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, liquidation, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
creditors' committee.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Sections 6.8 and 7.7 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made,
by the Trustee and the costs and expenses of collection;
Second: to Holders of Securities in respect of which or for
the benefit of which such money has been collected, for amounts due
and unpaid on such Securities for Principal (or, if such Securities
are Original Issue Discount Securities, such portion of the Principal
amount as may be specified in the terms that series) and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for Principal and interest,
respectively; and
Third: to the Issuer or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
such Securityholders.
-20-
<PAGE> 26
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, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of
more than 10% in Principal amount of the Securities of any series.
ARTICLE 7
TRUSTEE
SECTION 7.1. Duties of Trustee.
(1) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(b) 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 required by the terms of this Indenture to determine
whether or not they conform to the requirements of this
Indenture.
(3) 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:
(a) this paragraph does not limit the effect of paragraph
(2) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) 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 6.5.
(4) Regardless of whether therein expressly so provided,
every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this
Section.
(5) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense. No provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
-21-
<PAGE> 27
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Issuer. Money
held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2. Rights of Trustee.
(1) The Trustee may rely and shall be protected in acting or
refraining from acting 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.
(2) 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 such Certificate or Opinion.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(4) 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.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
of any series and may otherwise deal with the Issuer or an Affiliate of the
Issuer with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights. However, the Trustee is subject to Sections 7.10
and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Issuer's use of the proceeds from the Securities,
and it shall not be responsible for any statement in the Securities other than
its authentication.
SECTION 7.5. Notice of Defaults. If a Default in respect of the
Securities of any series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to the Holders of the Securities of that series
a notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of the Principal or interest on any Security, or in the
payment of any sinking fund or purchase fund installment, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of the
Holders of the Securities of that series.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA ss.
313(a), within 60 days after the reporting date stated in this Section 7.6, the
Trustee shall mail to Securityholders of each series a brief report dated as of
such reporting date that complies with TIA ss. 313(a). The Trustee shall also
comply with TIA ss. 313(b). For purposes of this Section 7.6, the reporting
date shall be May 15 of each year. The first reporting date will be the first
May 15 following the issuance of the first series of Securities hereunder.
A copy of each report at the time of its mailing to Securityholders of
each series shall be filed with the SEC and each stock exchange on which the
Securities of each series are listed. The Issuer will notify the Trustee of the
listing of Securities of any series on a stock exchange.
SECTION 7.7. Compensation and Indemnity. The Issuer shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee upon
request for all reasonable expenses incurred by it. Such expenses shall include
the reasonable compensation and expenses of the Trustee's agents and counsel.
-22-
<PAGE> 28
The Issuer shall indemnify the Trustee its directors, officers,
employees and agents against any loss, liability or expense incurred by it
arising out of or in connection with the acceptance or administration of this
Indenture. The Trustee shall notify the Issuer promptly of any claim for which
it may seek indemnity. The Issuer shall defend the claim and the Trustee shall
cooperate in the defense. The indemnities contained in this Section shall
survive the resignation or termination of the Trustee or the termination of
this Indenture. The Trustee may have separate counsel and the Issuer shall pay
the reasonable fees and expenses of such counsel. The Issuer need not pay for
any settlement made without its consent.
The Issuer need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee if the acts or omissions of
the Trustee, if any, relating to such loss, liability or expense, breached any
standard of care applicable to or imposed on the Trustee for such acts or
omissions.
To secure the Issuer'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, except that held in trust to pay Principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(8) or (9) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign at any time with respect to the Securities of
one or more series by so notifying the Issuer. The Holders of a majority in
Principal amount of the Securities of any series may remove the Trustee with
respect to such series by so notifying the Trustee and the Issuer. The Issuer
may remove the Trustee with respect to the Securities of one or more series if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of any one or
more series, the Issuer shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 7.10. Within one year after
the successor Trustee takes office, the Holders of a majority in Principal
amount of the Securities of each series may appoint a successor Trustee with
respect to the Securities of their respective series to replace the successor
Trustee for the Securities of such series appointed by the Issuer.
If a successor Trustee with respect to the Securities of any series
does not take office within 60 days after the retiring Trustee with respect to
the Securities of that series resigns or is removed, the retiring Trustee, the
Issuer or the Holders of at least 10% in Principal amount of the Securities of
that series may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of that
series.
-23-
<PAGE> 29
If the Trustee fails to comply with Section 7.10, with respect to the
Securities of one or more series, any Holder of Securities of such series may
petition any court of competent jurisdiction for the removal of the Trustee
with respect to the Securities of that series and the appointment of a
successor Trustee with respect to the Securities of that series.
In the case of the appointment of a successor Trustee with respect to
all Securities, the successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. 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 all Securityholders. 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 7.7.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Issuer, the retiring
Trustee and each successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all
series of Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee, with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring, shall continue to be
vested in the retiring Trustee and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and the successor Trustee shall have all the rights, powers and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates. The successor
Trustee shall mail a notice of its succession to the Holders of all Securities
of that or those series to which the appointment of such successor Trustee
relates. The retiring Trustee shall promptly transfer all property held by it
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates, subject to the lien provided for in Section
7.7. No successor Trustee with respect to Securities of any series shall accept
appointment as provided in this Section 7.8 unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under the
provisions of Section 7.10.
SECTION 7.9. Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility, Disqualification. This Indenture shall
always have a Trustee with respect to the Securities of each series which
satisfies the requirements of TIA ss. 310(a)(1) and (5). The Trustee shall
always have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition or shall be a
wholly-owned subsidiary of a bank, a trust company or a bank holding company
having, together with its subsidiaries, a reported combined capital and surplus
of at least $25,000,000. The Trustee is subject to TIA ss. 310(b), including
the optional provision permitted by the second sentence of TIA ss. 310(b)(9);
it being understood that for the purposes of this Indenture, with respect to
Securities of any series, the provisions of TIA ss. 310(b) with respect to
conflicting interests relating to "other securities" shall be interpreted to
include Securities of each other series and with respect to "other indentures"
shall include the provisions of this Indenture relating to the Securities of
such other series.
-24-
<PAGE> 30
SECTION 7.11. Preferential Collection of Claims Against the Issuer.
The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE AND SECURITIES
SECTION 8.1. Satisfaction and Discharge of Indenture. If at any time
(a) the Issuer shall have paid or caused to be paid the Principal of and
interest on all the Securities of any series outstanding hereunder, as and when
the same shall have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities of any series
theretofore authenticated (other than any Securities of such series which shall
have been destroyed, lost or stolen and which shall have been replaced as
provided in Section 2.7 or paid), and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer
with respect to Securities of such series (including payment of all sums due
the Trustee pursuant to Section 7.7), then this Indenture shall cease to be of
further effect with respect to Securities of such series (except as to (i)
rights of registration of transfer and exchange, and the Issuer's right of
optional redemption, if any, (ii) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (iii) rights of the Holders to
receive payments of Principal thereof and interest thereon from the trust fund
established pursuant to Section 8.2, and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, from the trust fund
established pursuant to Section 8.2, (iv) the rights, obligations and
immunities of the Trustee hereunder, (v) the rights of the Securityholders of
such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, (vi) all other obligations of
the Issuer in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8 and 8.6 and (vii) the
Issuer's rights pursuant to Sections 7.8, 8.5 and 8.6), and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel, (each stating that all conditions precedent relating to the
satisfaction and discharge of this Indenture have been complied with) and at
the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture with respect
to Securities of such series. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities of
such series.
SECTION 8.2. Defeasance. For purposes of Section 8.1, the Issuer shall
be deemed to have paid the Principal of and interest on Securities of any
series outstanding hereunder as and when the same shall have become due and
payable, if the Issuer shall have irrevocably deposited or caused to be
deposited in trust with the Trustee funds in cash and/or U.S. Government
Obligations sufficient without reinvestment thereof to provide for timely
payment of Principal of and interest on the Securities of such series to Stated
Maturity or redemption, as the case may be, not theretofore delivered to the
Trustee for cancellation; provided, however, that (i) in order to have money
available on a payment date to pay Principal or interest on the Securities of
such series, the U.S. Government Obligations shall be payable as to principal
and interest on or before such payment date in such amounts as will provide the
necessary money; and (ii) the Issuer shall obtain an Opinion of Counsel (which
may be based on a ruling from, or published by, the Internal Revenue Service)
to the effect that Holders of the Securities of that series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amounts and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred; and
provided, further, however, that notwithstanding the foregoing, with respect to
any series of Securities which shall at the time be listed for trading on The
New York Stock Exchange, there shall be no deposit of funds in cash and/or in
U.S. Government Obligations with the Trustee to pay the Principal amount, the
redemption price or any installment of interest in order to discharge the
Issuer's obligation in respect of any such payment if at such time the rules of
The New York Stock Exchange prohibit such deposit with the Trustee.
-25-
<PAGE> 31
SECTION 8.3. Satisfaction and Discharge of Securities. Securities of a
series shall be deemed to have been paid in full as between the Issuer and the
respective Holders (and future Holders) of Securities of such series upon the
satisfaction and discharge of the Indenture with respect to Securities of such
series pursuant to Section 8.1, except that in the case of such satisfaction
and discharge as a result of compliance with Section 8.2, the Securities of
such series shall be deemed to have been paid in full as between the Issuer and
the respective Holders (and future Holders) of Securities of such series only
if the deposit in trust with the Trustee by the Issuer of the funds in cash
and/or U.S. Government Obligations as provided in Section 8.2 is not
subsequently deemed a preference under the United States Bankruptcy Code as
then in effect.
SECTION 8.4. Application by Trustee of Money or U.S. Government
Obligations. Subject to Section 8.6, all money or U.S. Government Obligations
deposited with the Trustee pursuant to Section 8.2 shall be held in trust and
applied by it to the payment, either directly or through the Paying Agent to
the Holders of the particular Securities of such series for the payment or
redemption of which such money or U.S. Government Obligations shall have been
deposited with the Trustee, of all sums due and to become due thereon for
Principal and interest.
SECTION 8.5. Repayment of Money or U.S. Government Obligations by
Paying Agent. In connection with the satisfaction and discharge of this
Indenture with respect to Securities of any series, all money or U.S.
Government Obligations then held by the Paying Agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be paid or delivered to the Trustee and thereupon the Paying Agent
shall be released from all further liability with respect to such money or U.S.
Government Obligations.
SECTION 8.6. Return of Money, Securities or U.S. Government
Obligations. The Trustee and the Paying Agent shall promptly pay to the Issuer
upon request any excess money, U.S. Government Obligations or Securities held
by them at any time. Any money or U.S. Government Obligations deposited with or
paid to the Trustee or the Paying Agent for the payment of the Principal of, or
interest on any Security of any series and not applied but remaining unclaimed
for two years after the date upon which such Principal or interest shall become
due and payable, shall, upon the request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, be repaid or delivered to the Issuer by the Trustee
for such series or by the Paying Agent, and the Holder of the Security of such
series shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or the Paying Agent with respect to such money or U.S.
Government Obligations shall thereupon cease.
ARTICLE 9
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Issuer and the Trustee
may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency or to make
such provisions with respect to matters or questions arising under
this Indenture as may be necessary or desirable and not inconsistent
with this Indenture or with any indenture supplemental hereto or any
Board Resolution establishing any series of Securities, provided that
such amendment does not adversely affect the rights of
Securityholders;
(2) to comply with Section 5.1;
(3) to add additional covenants;
(4) to establish the form or forms or terms with respect to
Securities of any additional series as permitted by Section 2.1;
-26-
<PAGE> 32
(5) to evidence and provide for the acceptance of appointment
of a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 7.8; or
(6) to provide for the exchange of Global Securities for
Securities issued hereunder in definitive form and to make all
appropriate changes for such purpose.
SECTION 9.2. With Consent of Holders. The Issuer and the Trustee may
amend this Indenture in a manner affecting the Securities of any series, or may
amend the Securities of such series, with the written consent of the Holders of
at least a majority in Principal amount of the Securities of such series.
However, without the consent of each Securityholder affected, an amendment
under this Section may not:
(1) reduce the percentage in Principal amount of Securities
whose Holders must consent to an amendment;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the Principal of (or, in the case of Original
Issue Discount Securities, the amount of such Securities that would be
due and payable upon acceleration of the Maturity thereof pursuant to
Section 6.2), change the Stated Maturity of or reduce the amount
payable on redemption of or otherwise alter the requirements with
respect to the mandatory redemption of any Security;
(4) make any Security payable in money other than that stated
in the Security; or
(5) make any change in Section 6.4 or 6.7 or this Section
9.2.
After an amendment under this Section becomes effective, the Issuer
shall mail to Securityholders a notice briefly describing the amendment.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall be set forth in a supplemental indenture
that complies with the Trust Indenture Act of 1939, as amended as then in
effect.
SECTION 9.4. Effect of Consents. A consent to an amendment or waiver
by a Holder of a Security is effective upon delivery to the Trustee and is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security; however,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. An amendment or
waiver becomes effective in accordance with its terms and thereafter binds
every Securityholder, except to the extent each Securityholder affected must
consent and such Securityholder did not do so.
SECTION 9.5. Notation on or Exchange of Securities. The Trustee may
place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Issuer in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment or
waiver.
SECTION 9.6. Trustee Protected. The Trustee may, but shall not be
required to, sign any supplemental indenture that affects its rights, duties,
liabilities or immunities under this Indenture or otherwise.
-27-
<PAGE> 33
ARTICLE 10
THE GUARANTEES
SECTION 10.1. The Guarantees. The Guarantor hereby unconditionally
guarantees to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the
obligations of the Issuer hereunder or thereunder, that: (a) the principal of
and premium and interest, on the Securities shall be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on premium and interest, on
the Securities, if any, if lawful, and all other obligations of the Issuer to
the Holders or the Trustee hereunder or thereunder shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantor shall be obligated to pay the same immediately. The
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuer, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest, notice and all demands whatsoever and covenants
that this Guarantee shall not be discharged except by complete performance of
the obligations contained in the Securities and this Indenture. If any Holder
or the Trustee is required by any court or otherwise to return to the Issuer or
the Guarantor, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Issuer or the Guarantor, any amount paid by
either to the Trustee or such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders of Securities in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Guarantee.
SECTION 10.2. Execution and Delivery of Guarantees. To evidence its
Guarantee set forth in Section 10.1, the Guarantor hereby agrees that a
notation of such Guarantee shall be endorsed by an Officer of the Guarantor on
each Security authenticated and delivered by the Trustee, that this Indenture
shall be executed on behalf of the Guarantor by an Officer of the Guarantor and
attested to by an Officer of the Guarantor and that the Guarantor shall deliver
to the Trustee an Opinion of Counsel that the foregoing have been duly
authorized, executed and delivered by the Guarantor and that such Guarantee is
a valid and legally binding obligation of the Guarantor, enforceable against
such Guarantor in accordance with its terms, except insofar as (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
The Guarantor hereby agrees that its Guarantee set forth in Section
10.1 shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of such Guarantee.
-28-
<PAGE> 34
If an Officer of the Guarantor whose signature is on this Indenture or
on the applicable Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which such Guarantee is endorsed, such Guarantee
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantees set forth in
this Indenture on behalf of the Guarantor.
SECTION 10.3. When the Issuer May Merge, etc. The Guarantor shall not
consolidate or merge into, or sell, assign, transfer or lease all or
substantially all of its assets to any person other than the Issuer and any
other subsidiary of the Guarantor unless:
(1) the person is a corporation organized and existing under
the laws of the United States of America or any State thereof or the
District of Columbia;
(2) the person assumes by supplemental indenture all the
obligations of the Guarantor under the Securities and this Indenture;
(3) immediately after the transaction no Default shall exist;
and
(4) an Officers' Certificate and Opinion of Counsel have been
delivered to the Trustee to the effect that the conditions set forth
in the preceding clauses (1) through (3) above have been met.
Notwithstanding the foregoing, the Guarantor shall not be permitted to
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person), another corporation, person or entity pursuant to the
preceding sentence if such consolidation or merger would not be permitted by
Section 5.1 hereof.
In case of any such consolidation or merger and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed
upon the Securities and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as the Guarantor.
Such successor corporation thereupon may cause to be signed any or all of the
Guarantees to be endorsed upon all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee. All the Guarantees so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of the Guarantor with or into the Issuer, or shall prevent any sale or
conveyance of the property of the Guarantor as an entirety or substantially as
an entirety to the Issuer.
SECTION 10.4. "Trustee" to Include Paying Agent. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Issuer
and be then acting hereunder, the term "Trustee" as used in this Article 10
shall in such case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as fully and
for all intents and purposes as if such Paying Agent were named in this Article
10 in place of the Trustee.
-29-
<PAGE> 35
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision that is deemed
to be included in this Indenture by the TIA, the required provision shall
control. The provisions of TIA ss.ss. 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture
whether or not physically contained herein.
SECTION 11.2. Notices. Any notice or communication by the Issuer or
the Trustee to the other shall be in writing and shall be delivered in person
or mailed by first-class mail (registered or certified, return receipt
requested), telecopier or overnight air courier to the other's address stated
in Section 11.11; provided, however, that any such notice shall be deemed duly
given when such notice is received by the Issuer or the Trustee, as the case
may be. The Issuer or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail (registered or certified, return receipt requested) or
overnight air courier to his address shown on the Security Register. Failure to
mail a notice or communication to a Securityholder or any defect in a notice
shall not affect the sufficiency thereof with respect to any other
Securityholders.
Except as provided above, if a notice or communication is mailed in
the manner and within the time prescribed above, it shall be deemed duly given,
whether or not the addressee receives it.
If the Issuer mails a notice or communication to Securityholders, they
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuer, the Trustee, the Registrar and anyone else affected
shall be entitled to the protection of TIA ss. 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Issuer to the Trustee to take any action
under this Indenture, the Issuer shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that each person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
-30-
<PAGE> 36
(3) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
person, such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officers know that the opinion
with respect to the matters upon which their certificate may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters the information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representation with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous, or in the exercise of reasonable care should know that
the same is erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an accountant (who may be an employee of the
Issuer), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which the certificate, statement or opinion may be
based as aforesaid is erroneous, or in the exercise of reasonable care should
know that the same is erroneous. Any certificate or opinion of any independent
firm of public accountants filed with the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by written consent or at a meeting of Holders of
Securities of any series. The fact and date of the execution of a written
consent or other writing by any such person shall be established in accordance
with the procedures specified in such reasonable rules, and the ownership of
Securities of any series shall be established by the Security Register for such
series maintained by the Registrar. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 11.7. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions in any place of payment are not
required to be open. If a payment date with respect to a particular series of
Securities is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.8. No Recourse Against Others. No person shall have any
recourse under or upon any obligation or agreement of the Issuer under this
Indenture or the Securities of any series or because of any debt evidenced by
the Securities of any series against any stockholder, officer, employee or
director, as such, of any of the Issuer. By accepting a Security of any series,
each Holder waives and releases all such liability as a part of the
consideration for the issuance thereof.
SECTION 11.9. Interest Limitation. If any usury law now or at any time
hereafter in force shall be applicable to this Indenture or the Securities of
any series or any other document or instrument related hereto or thereto, it is
the intention of the Issuer and the Trustee to conform strictly to any such
usury laws and any subsequent revisions or repeals thereof. In furtherance
thereof, the Issuer and the Trustee stipulate and agree that none of the terms
and provisions contained in this Indenture or the Securities of any series or
any other document or instrument related hereto or thereto shall ever be
construed to give rise to a contract or obligation to pay interest in excess of
the maximum amount permitted to be contracted for, taken, reserved, charged,
collected or received under any applicable law.
-31-
<PAGE> 37
SECTION 11.10. Duplicate Originals. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 11.11. Addresses.
The Issuer's address is:
Mesa Operating Co.
1400 Williams Square West
5205 North O'Conner Boulevard
Irving, Texas 75039
Attention: Treasurer
Telecopier No.: (972) 402-7028
The Guarantor's address is:
MESA Inc.
1400 Williams Square West
5205 North O'Conner Boulevard
Irving, Texas 75039
Attention: Treasurer
Telecopier No.: (972) 402-7028
The Trustee's address is:
Bankers Trust Company
4 Albany Street, 4th Floor
Mail Stop # 5041
New York, NY
Attention: Corporate Trust and Agency Group
Telecopier No.: (212) 250-6392
SECTION 11.12. Record Date for Action by Securityholders. The Issuer
(or, if a deposit has been made pursuant to Section 8.2 or if an Event of
Default has occurred, the Trustee) may set a record date for purposes of
determining the identity of Holders entitled to vote or consent to any action
by vote or consent authorized or permitted under this Indenture, which record
date shall be no later than ten days nor more than 30 days prior to the first
solicitation of such vote or consent or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 2.5 hereof prior to such
solicitation. If a record date is fixed, those persons who were Holders of
Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.
SECTION 11.13. Governing Law. The laws of the State of New York shall
govern the construction and interpretation of this Indenture and the
Securities, without regard to principles of conflicts of laws. The Issuer
irrevocably submits to the non-exclusive jurisdiction of any United States
federal or New York state court sitting in The City of New York in any action
or proceeding arising out of or relating to this Indenture or the Securities,
and the Issuer irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court.
SECTION 11.14. Payments for Consent. The Issuer shall not, directly or
indirectly, pay or cause to be paid, or cause any of their Affiliates to pay or
cause to be paid, any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or
-32-
<PAGE> 38
provisions of this Indenture or the Securities, unless such consideration is
offered to be paid to all Holders whose consent, waiver or agreement to amend
is required for the Issuer to effect such consent, waiver or amendment.
SECTION 11.15. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.16. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Issuer or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 11.17. Severability. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
SECTION 11.18. Successors. All agreements of the Issuer in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 11.19. Qualification of Indenture. The Issuer shall qualify
this Indenture under the TIA and shall pay all costs and expenses (including
attorneys' fees for the Issuer and the Trustee) incurred in connection
therewith, including, without limitation, costs and expenses of qualification
of the Indenture and the Securities and printing this Indenture and the
Securities. The Trustee shall be entitled to receive from the Issuer any such
Officers' Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this Indenture
under the TIA.
SECTION 11.20. Counterpart 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.
-33-
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first above written.
MESA INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MESA OPERATING CO.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-34-
<PAGE> 1
EXHIBIT 4.2
================================================================================
MESA OPERATING CO.,
AS ISSUER
MESA INC.
AS GUARANTOR
and
BANKERS TRUST COMPANY,
Trustee
--------------------------
SUBORDINATED INDENTURE
Dated as of _____ __, ____
--------------------
Unsecured Subordinated Debentures, Notes and Other
Evidences of Indebtedness
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Section Indenture Section
- ----------- -----------------
<S> <C>
310(a)(1)................................................. 7.10
(a)(2)................................................. 7.10
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(a)(5)................................................. 7.10
(b).................................................... 7.8; 7.10; 12.2
(c).................................................... N.A.
311(a).................................................... 7.11
(b).................................................... 7.11
(c).................................................... N.A.
312(a).................................................... 2.5
(b).................................................... 12.3
(c).................................................... 12.3
313(a).................................................... 7.6
(b)(1)................................................. N.A.
(b)(2)................................................. 7.6
(c).................................................... 12.2
(d).................................................... 7.6
314(a).................................................... 4.2; 4.5; 12.2
(b).................................................... N.A.
(c)(1)................................................. 12.4
(c)(2)................................................. 12.4
(c)(3)................................................. N.A
(d).................................................... N.A.
(e).................................................... 12.5
(f).................................................... N.A.
315(a).................................................... 7.1(2)
(b).................................................... 7.5; 12.2
(c).................................................... 7.1(1)
(d).................................................... 7.1(3)
(e).................................................... 6.11
316(a)(last sentence)..................................... 2.9
(a)(1)(A).............................................. 6.5
(a)(1)(B).............................................. 6.4
(a)(2)................................................. N.A.
(b).................................................... 6.7
(c).................................................... 12.12
317(a)(1)................................................. 6.8
(a)(2)................................................. 6.9
(b).................................................... 2.4
318(a).................................................... 12.1
</TABLE>
N.A. means Not Applicable.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions............................................................................1
SECTION 1.2. Other Definitions......................................................................5
SECTION 1.3. Incorporation by Reference of Trust Indenture Act......................................5
SECTION 1.4. Rules of Construction..................................................................6
ARTICLE 2 - THE SECURITIES
SECTION 2.1. Form and Dating........................................................................6
SECTION 2.2. Execution and Authentication...........................................................8
SECTION 2.3. Registrar and Paying Agent.............................................................9
SECTION 2.4. Paying Agent to Hold Money in Trust....................................................9
SECTION 2.5. Securityholder Lists..................................................................10
SECTION 2.6. Transfer and Exchange.................................................................10
SECTION 2.7. Replacement Securities................................................................10
SECTION 2.8. Outstanding Securities................................................................10
SECTION 2.9. Treasury Securities...................................................................11
SECTION 2.10. Temporary Securities; Global Securities...............................................11
SECTION 2.11. Cancellation..........................................................................12
SECTION 2.12. Defaulted Interest....................................................................12
ARTICLE 3 - REDEMPTION; SINKING FUND
SECTION 3.1. Notices to Trustee....................................................................13
SECTION 3.2. Selection of Securities to be Redeemed................................................13
SECTION 3.3. Notice of Redemption..................................................................13
SECTION 3.4. Effect of Notice of Redemption........................................................14
SECTION 3.5. Deposit of Redemption Price...........................................................14
SECTION 3.6. Securities Redeemed in Part...........................................................14
SECTION 3.7. Sinking Fund..........................................................................14
SECTION 3.8. Terms of Securities to Govern.........................................................15
ARTICLE 4 - COVENANTS
SECTION 4.1. Payment of Securities.................................................................15
SECTION 4.2. SEC Reports...........................................................................15
SECTION 4.3. Certificate to Trustee................................................................15
SECTION 4.4. Maintenance of Office or Agency.......................................................16
SECTION 4.5. Further Assurances....................................................................16
ARTICLE 5 - SUCCESSORS
SECTION 5.1. When the Issuer May Merge, etc........................................................16
ARTICLE 6 - DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default.....................................................................17
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.2. Acceleration..........................................................................18
SECTION 6.3. Other Remedies........................................................................19
SECTION 6.4. Waiver of Past Defaults...............................................................19
SECTION 6.5. Control by Majority...................................................................19
SECTION 6.6. Limitation on Suits...................................................................19
SECTION 6.7. Rights of Holders to Receive Payment..................................................20
SECTION 6.8. Collection Suit by Trustee............................................................20
SECTION 6.9. Trustee May File Proofs of Claim......................................................20
SECTION 6.10. Priorities............................................................................21
SECTION 6.11. Undertaking for Costs.................................................................21
ARTICLE 7 - TRUSTEE
SECTION 7.1. Duties of Trustee.....................................................................21
SECTION 7.2. Rights of Trustee.....................................................................22
SECTION 7.3. Individual Rights of Trustee..........................................................22
SECTION 7.4. Trustee's Disclaimer..................................................................22
SECTION 7.5. Notice of Defaults....................................................................22
SECTION 7.6. Reports by Trustee to Holders.........................................................23
SECTION 7.7. Compensation and Indemnity............................................................23
SECTION 7.8. Replacement of Trustee................................................................23
SECTION 7.9. Successor Trustee by Merger, etc......................................................25
SECTION 7.10. Eligibility, Disqualification.........................................................25
SECTION 7.11. Preferential Collection of Claims Against the Issuer..................................25
ARTICLE 8 - DISCHARGE OF INDENTURE AND SECURITIES
SECTION 8.1. Satisfaction and Discharge of Indenture...............................................25
SECTION 8.2. Defeasance............................................................................26
SECTION 8.3. Satisfaction and Discharge of Securities..............................................26
SECTION 8.4. Application by Trustee of Money or U.S. Government Obligations........................26
SECTION 8.5. Repayment of Money or U.S. Government Obligations by Paying Agent.....................26
SECTION 8.6. Return of Money, Securities or U.S. Government Obligations............................26
ARTICLE 9 - AMENDMENTS
SECTION 9.1. Without Consent of Holders............................................................27
SECTION 9.2. With Consent of Holders...............................................................27
SECTION 9.3. Compliance with Trust Indenture Act...................................................28
SECTION 9.4. Effect of Consents....................................................................28
SECTION 9.5. Notation on or Exchange of Securities.................................................28
SECTION 9.6. Trustee Protected.....................................................................28
ARTICLE 10 - SUBORDINATION OF THE SECURITIES
SECTION 10.1. Agreement to Subordinate..............................................................28
SECTION 10.2. Certain Definitions...................................................................28
SECTION 10.3. Liquidation; Dissolution; Bankruptcy..................................................29
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10.4. Default on Designated Senior Debt.....................................................29
SECTION 10.5. Acceleration of Securities............................................................30
SECTION 10.6. When Distribution Must Be Paid Over...................................................30
SECTION 10.7. Notice by Company.....................................................................31
SECTION 10.8. Subrogation...........................................................................31
SECTION 10.9. Relative Rights.......................................................................31
SECTION 10.10. Subordination May Not Be Impaired by the Issuer or the Guarantor......................31
SECTION 10.11. Payment, Distribution or Notice to Representative.....................................31
SECTION 10.12. Rights of Trustee and Paying Agent....................................................32
SECTION 10.13. Authorization to Effect Subordination.................................................32
SECTION 10.14. Amendments............................................................................32
SECTION 10.15. No Waiver of Subordination Provisions.................................................32
ARTICLE 11 - THE GUARANTEES
SECTION 11.1. The Guarantees. .....................................................................33
SECTION 11.2. Execution and Delivery of Guarantees. ...............................................33
SECTION 11.3. When the Issuer May Merge, etc. .....................................................34
SECTION 11.4. "Trustee" to Include Paying Agent. ..................................................34
SECTION 11.5. Subordination of Guarantees. ........................................................34
ARTICLE 12 - MISCELLANEOUS
SECTION 12.1. Trust Indenture Act Controls..........................................................35
SECTION 12.2. Notices...............................................................................35
SECTION 12.3. Communications by Holders with Other Holders..........................................35
SECTION 12.4. Certificate and Opinion as to Conditions Precedent....................................35
SECTION 12.5. Statements Required in Certificate or Opinion.........................................35
SECTION 12.6. Rules by Trustee and Agents...........................................................36
SECTION 12.7. Legal Holidays........................................................................36
SECTION 12.8. No Recourse Against Others............................................................36
SECTION 12.9. Interest Limitation...................................................................36
SECTION 12.10. Duplicate Originals...................................................................37
SECTION 12.11. Addresses.............................................................................37
SECTION 12.12. Record Date for Action by Securityholders.............................................37
SECTION 12.13. Governing Law.........................................................................37
SECTION 12.14. Payments for Consent..................................................................37
SECTION 12.15. Effect of Headings and Table of Contents..............................................38
SECTION 12.16. No Adverse Interpretation of Other Agreements.........................................38
SECTION 12.17. Severability..........................................................................38
SECTION 12.18. Successors............................................................................38
SECTION 12.19. Qualification of Indenture............................................................38
SECTION 12.20. Counterpart Originals.................................................................38
</TABLE>
iii
<PAGE> 6
SUBORDINATED INDENTURE, dated as of _________ ___, _____, among MESA
OPERATING CO., a corporation incorporated and existing under the laws of the
State of Delaware ("Operating"), as issuer, MESA INC., a corporation
incorporated and existing under the laws of the State of Texas (the "Company"),
as guarantor, and BANKERS TRUST COMPANY, a New York banking corporation, as
trustee and not in its individual capacity (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of Operating's unsecured
subordinated debentures, notes and other evidences of indebtedness from time to
time authenticated and delivered pursuant to this Indenture, which may be
issued in one or more series, each such series ranking pari passu with each
other series:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acquired Debt" means, with respect to any specified person or any
Subsidiary of such person (i) Indebtedness of any other person existing at the
time such other person is merged with or into or became a Subsidiary of such
specified person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other person merging with or into
or becoming a Subsidiary of such specified person, and (ii) Indebtedness
secured by a Lien encumbering any asset acquired by such specified person.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended to the extent the lease
payments during such extension period are required to be capitalized on a
balance sheet in accordance with GAAP).
"Board Resolution" means a copy of a resolution delivered to the
Trustee and certified (i) by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Company Board and to be in full force
and effect on the date of such certification and (ii) by the Secretary or
Assistant Secretary of Operating to have been duly adopted by the Operating
Board and to be in full force and effect on the date of such certification.
"Business Day" means any day that is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other
1
<PAGE> 7
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.
"Company" means MESA Inc., a Texas corporation, until a successor
replaces it and thereafter such successor.
"Company Board" means the board of directors of the Company or any
authorized committee of such board of directors.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.11 hereof or such other address as to which the
Trustee may give notice to the Company.
"Debt", with respect to any person, means the following, whether
outstanding on the date hereof or thereafter created or incurred: (1) any
liability of such person (a) for borrowed money, (b) evidenced by a note, bond,
debenture or similar instrument (including a purchase money obligation) given
in connection with the acquisition of or exchange for any property or assets
(other than inventory or similar property acquired in the ordinary course of
business), including securities and other Debt or (c) in respect of letters of
credit issued for its account; (2) any liability of others described in the
preceding clause (1) which the person has guaranteed or which is otherwise its
legal liability or which is secured by assets of such person; and (3) any
amendment, renewal, extension or refunding of any such liability described in
the preceding clauses (1) and (2); provided, however, that "Debt" of a person
shall not include any liability of such person for compensation to employees or
for inventory or similar property acquired in the ordinary course of business
or for services.
"Default" means any event which is, or after notice or the passage of
time, or both, would be, an Event of Default.
"Depositary" means a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or any successor thereto, which shall be
designated by the Issuer pursuant to Section 2.1 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each person who is then a
Depositary hereunder, and if at any time there is more than one such person,
shall mean or include all such persons. "Depositary" as used with respect to
the Securities of any series shall mean the Depositary with respect to the
Securities of that series.
"Designated Senior Debt" shall have the meaning given to such term in
the Board Resolution or indenture supplemental hereto pursuant to which
Securities may be issued in accordance with Section 2.1.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America as of any date of determination.
"Global Security" means a Security registered in the name of the
Depositary or its nominee evidencing all or part of a series of Securities,
which is executed by the Issuer and authenticated and delivered to the
Depositary or pursuant to the Depositary's instructions, all in accordance with
this Indenture and pursuant to a written order of the Issuer signed by two
Officers of the Issuer.
"Guarantee" means each of the Guarantees of the Securities by the
Company hereunder.
"Guarantor" means the Company and its respective successors and
assigns.
2
<PAGE> 8
"Holder" or "Securityholder" means a person in whose name a Security
is registered in the Security Register.
"Indebtedness" means, with respect to any person, without duplication,
(a) any indebtedness of such person, whether or not contingent, (i) in respect
of borrowed money, (ii) evidenced by bonds, notes, debentures or similar
instruments, (iii) evidenced by letters of credit (or reimbursement agreements
in respect thereof) or banker's acceptances, (iv) representing Capital Lease
Obligations, (v) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable, (vi) representing any obligations in respect of
Interest Rate Hedging Agreements or Oil and Gas Hedging Contracts, and (vii) in
respect of any Production Payment, (b) all indebtedness of others of the type
referred to in clauses (a), (c), (d) or (e) secured by a Lien on any asset of
such person (whether or not such indebtedness is assumed by such person, except
that the amount of such indebtedness not assumed shall be deemed to be the
lesser of the value of such asset and the amount of such indebtedness so
secured), (c) obligations of such person in respect of production imbalances
and (d) Attributable Debt of such person, (e) Acquired Debt of such person and
(f) to the extent not otherwise included in the foregoing, the guarantee by
such person of any indebtedness of any other person, of the type referred to in
the preceding clauses (a), (c), (d) or (e).
"Indenture" means this Subordinated Indenture as amended or
supplemented from time to time pursuant to the applicable provisions of this
Indenture, and shall include the form and terms of each particular series of
Securities established pursuant to Section 2.1 hereof.
"Interest Payment Date" means the date on which payment of an
installment of interest on the Securities of any series is due.
"Interest Rate Hedging Agreements" means, with respect to any person,
the obligations of such person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such person against fluctuations
in interest rates.
"Issuer" means Operating, until a successor replaces Operating
pursuant to the applicable provisions of this Indenture, and thereafter such
successor, as set forth in the form and terms of each particular series of
Securities established pursuant to Section 2.1 hereof.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Maturity" when used with respect to any Security means the date on
which the Principal of such Security or an installment of Principal becomes due
and payable as therein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, pursuant to a sinking fund or
otherwise.
"Officer" means, with respect to the Issuer or the Guarantor, the
Chairman of the Board, Vice Chairman of the Board, President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Issuer or the Guarantor, as the case may be, and who
is identified on the list of officers delivered by the Issuer or the Guarantor,
as the case may be, to the Trustee on the date hereof (as such list may be
modified or supplemented by the Issuer or the Guarantor from time to time
thereafter).
"Officers' Certificate" means a certificate signed by two Officers of
the Issuer and two Officers of the Guarantor.
"Oil and Gas Hedging Contracts" means any oil and gas purchase or
hedging agreement, and other agreement or arrangement, in each case, that is
designed to provide protection against oil and gas price fluctuations.
3
<PAGE> 9
"Operating" means Mesa Operating Co., a Delaware corporation, until a
successor replaces it and thereafter such successor.
"Operating Board" means the board of directors of Operating or any
authorized committee of such board of directors.
"Opinion of Counsel" means a written opinion in form and substance
reasonably acceptable to the Trustee from legal counsel who is reasonably
acceptable to the Trustee. Such counsel may be an employee of or counsel to the
Trustee, the Issuer or the Guarantor.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Stated Maturity thereof
pursuant to Section 6.2.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or other agency or political subdivision thereof.
"Principal" of a Security means the principal of the Security, plus
the premium, if any, on the Security. In determining whether the Holders of the
requisite Principal amount of any series of Original Issue Discount Securities
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, the Principal amount of any Original Issue Discount Security
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 Stated Maturity thereof pursuant to Section 6.2.
"Production Payments" means Dollar-Denominated Production Payments and
Volumetric Production Payments, collectively.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 2.1.
"Representative" means the indenture trustee or other trustee, agent
or representative for any holder of Senior Debt.
"Responsible Officer" means any officer within the Corporate Trust and
Agency Group, including, without limitations, any vice president, assistant
vice president, treasurer, assistant treasurer, assistant secretary, special
secretary, or any other responsible officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge or familiarity with the particular fact.
"SEC" means the Securities and Exchange Commission.
"Securities" means the unsecured subordinated debentures, notes and
other evidences of indebtedness (including any Global Securities) authenticated
and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" shall have the meaning given to such term in the Board
Resolution or indenture supplemental hereto pursuant to which Securities may be
issued in accordance with Section 2.1.
"Stated Maturity" when used with respect to any Security or any
installment of Principal thereof means the date specified in such Security as
the fixed date on which the Principal of such Security or such installment of
Principal is due and payable.
4
<PAGE> 10
"Subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such person or a Subsidiary of such
person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb) (together with any rules or regulations promulgated
thereunder) as in effect on the date first above written, except to the extent
that any subsequent amendment thereto shall retroactively apply to this
Indenture.
"Trustee" means the party named as such above, not in its individual
capacity but solely as Trustee under this Indenture, or any other trustee
appointed with respect to the Securities of any series as contemplated by
Section 2.1, in each case until a successor replaces it with respect to the
Securities of one or more series pursuant to the applicable provisions of this
Indenture, and thereafter with respect to the Securities of such one or more
series shall mean the successor.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged and which are not callable at the issuer's
option.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
SECTION 1.2. Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- ----------
<S> <C>
"Bankruptcy Law" ....................... 6.1
"Custodian" ............................ 6.1
"Event of Default" ..................... 6.1
"Legal Holiday" ........................ 12.7
"Paying Agent" ......................... 2.3
"Payment Default"....................... 6.1
"Payment Blockage Notice"............... 10.4
"Registrar" ............................ 2.3
"Security Register" ................... 2.3
</TABLE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and the
Guarantor.
All other terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings assigned to them by such statute or rule, except as provided in
Section 7.10.
5
<PAGE> 11
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
(6) "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision, and the terms "Article," "Section,"
"Exhibit" and "Schedule," unless otherwise specified or indicated by
the context in which used, mean the corresponding Article or Section
of, or the corresponding Exhibit or Schedule to, this Indenture; and
(7) references to agreements and other instruments include
subsequent amendments, supplements and waivers to such agreements or
instruments but only to the extent not prohibited by this Indenture.
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating. The Securities of each series shall be
in such form as shall be established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and in case such form is not established by supplemental
indenture, such form shall be approved by the Trustee if the Trustee's rights
or obligations are affected thereby, and such form may further have such
legends, notations or endorsements as may be required by law, stock exchange
rules or usage.
Each Security shall be in fully-registered form and shall be dated the
date of its authentication.
The Securities may be issued in one or more series. There shall be
established by or pursuant to a Board Resolution, and set forth in an Officers'
Certificate delivered to the Trustee, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series, the
following terms with respect to such series, and thereafter such terms shall be
deemed to be a part of this Indenture (it being understood and agreed that, in
the case of any terms to be established by or pursuant to a Board Resolution
which, if established, would affect the rights, duties, obligations,
liabilities or immunities of the Trustee, such terms shall not be deemed to be
a part of the Indenture unless and until they shall have been approved by the
Trustee):
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from all other Securities);
(2) any limit upon the aggregate Principal amount of the
Securities of such series which may be authenticated and delivered
under this Indenture (except for Securities of such series
authenticated and delivered upon transfer of, or in exchange for, or
in lieu of, other Securities of such series pursuant to Section 2.6,
2.7, 2.10, 3.6 or 9.5);
6
<PAGE> 12
(3) the date or dates on which the Principal of the
Securities of such series is payable or the manner of determining such
date or dates;
(4) the rate or rates at which the Securities of such series
shall bear interest, if any, or the method or methods of calculating
such rate or rates of interest and the date or dates from which such
interest shall accrue;
(5) the Interest Payment Dates on which such interest shall
be payable and the Regular Record Dates for the interest payable on
any Interest Payment Date;
(6) the place or places where the Principal of and interest
on the Securities of such series shall be payable or the method of
paying Principal of and interest on the Securities of such series;
(7) the period or periods within which, the price or prices
at which, and the terms and conditions upon which Securities of such
series may be redeemed, in whole or in part, at the option of the
Issuer;
(8) the obligation, if any, of the Issuer to redeem or
purchase Securities of such series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which, and the
terms and conditions upon which Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities shall be
issuable;
(10) if Securities of such series constitute Original Issue
Discount Securities, the portion of the Principal amount of Securities
which shall be payable upon declaration of acceleration thereof
pursuant to Section 6.2;
(11) any covenants of the Issuer or the Guarantor, for the
benefit of the Holders of Securities of such series, in addition to
those set forth in Article 4 and Article 11, respectively;
(12) any Events of Default with respect to the Securities of
such series in addition to those set forth in Section 6.1;
(13) whether the Securities of such series shall be issued,
in whole or in part, in the form of one or more Global Securities and,
in such case, the Depositary for such Global Security or Securities;
(14) the identity of any trustee, authenticating agent,
Paying Agent or Registrar with respect to the Securities of such
series, if other than the Trustee;
(15) the period or periods within which, the price or prices
at which, and the terms and conditions upon which Securities of such
series may be converted into other securities of the Issuer;
(16) the definition of the terms "Senior Debt" and
"Designated Senior Debt" as used in this Indenture;
(17) any other terms with respect to the Securities of such
series (which terms 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 by or
pursuant to the Board Resolution and set forth in the Officers' Certificate
delivered to
7
<PAGE> 13
the Trustee or as provided pursuant to an indenture supplemental hereto with
respect to such series. All Securities of any one series need not be issued at
the same time, and unless otherwise provided, a series may be reopened for
issuance of additional Securities of such series.
SECTION 2.2. Execution and Authentication. An Officer of the Issuer
shall sign the Securities for the Issuer by manual or facsimile signature and
the seal of the Issuer shall be reproduced on the Securities and attested by
the manual or facsimile signature of an authorized Officer of the Issuer.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall be valid
nevertheless.
A Security shall not be valid until authenticated by the Trustee by
manual signature. The Trustee's certificate of authentication of all Securities
shall be in substantially the following form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Bankers Trust Company, as Trustee
By:
-----------------------------
Authorized Signatory
The manual signature of the Trustee on a certificate of authentication
in the form hereinabove provided for shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall at any time and from time to time authenticate
Securities for original issue, upon a written order of the Issuer signed by two
Officers of the Issuer.
In authenticating Securities of a particular series, and accepting the
additional responsibilities under this Indenture in relation to such series of
Securities, the Trustee shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon:
(1) certified copies of the charter and bylaws of the Issuer;
(2) each Board Resolution relating to the Securities of such
series, and if the form or forms of the Securities of such series and
the terms with respect thereto are established by a Board Resolution,
an Officers' Certificate (i) approving the form or forms of the
Securities of such series and the terms with respect thereto, to the
extent such terms have been established (and, if the Securities of
such series are Original Issue Discount Securities, setting forth such
facts as are necessary to compute amounts due upon acceleration, if
such facts are not specified in the form of Security) and (ii) stating
that all conditions precedent to the issuance and authentication of
the Securities of such series have been complied with;
(3) an executed supplemental indenture (if any) relating to
such Securities;
(4) an Opinion of Counsel, which shall state
(a) that the terms with respect to the Securities of such
series have been established by or pursuant to a Board
Resolution or by a supplemental indenture as permitted by,
and in conformity with, the provisions of this Indenture;
(b) that the Securities of such series, when
authenticated and delivered by the Trustee and issued by the
Issuer in the manner and subject to any further conditions
specified in such
8
<PAGE> 14
Opinion of Counsel that are reasonably acceptable to the
Trustee, will constitute a valid and binding obligation of
the Issuer, enforceable against the Issuer in accordance with
its terms, except insofar as (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor
may be brought; and
(c) that all conditions precedent to the execution and
delivery by the Issuer of the Securities have been complied
with; and
If all Securities of a series are not to be originally issued
at one time, it shall not be necessary to deliver the Officers'
Certificate or the Opinion of Counsel otherwise required pursuant to
Section 2.1 and this Section 2.2 at or prior to the time of
authentication of each Security of such series if such documents have
been delivered at or prior to the authentication upon original
issuance of the first Security of such series.
The Trustee shall not be required to authenticate any
Securities if such action may not lawfully be taken or will affect the
Trustee's own rights, duties or immunities under the Securities and
this Indenture in a manner which is not reasonably acceptable to the
Trustee.
The aggregate Principal amount of Securities of any series
outstanding at any time may not exceed any limit upon the maximum
Principal amount for such series set forth in or pursuant to the Board
Resolution or supplemental indenture relating to such series delivered
pursuant to this Section 2.2, except as authorized pursuant to Section
2.7.
The Trustee may appoint an authenticating agent acceptable to
the Issuer to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Trustee may do so, provided that
only the Trustee may authenticate Securities pursuant to Section 2.7.
Each reference in this Indenture to authentication by the Trustee
includes authentication by an authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Issuer or an
Affiliate of the Issuer.
SECTION 2.3. Registrar and Paying Agent. The Issuer shall maintain an
office or agency where Securities may be presented to the registrar
("Registrar") for registration of transfer or for exchange and an office or
agency where Securities may be presented to the paying agent ("Paying Agent")
for payment; provided, however, that at the option of the Issuer payment of
interest may be made by check mailed on or before the due date to the address
of the person entitled thereto as such address shall appear in the register of
the Securities provided for in this Section. The Registrar shall keep a
register of the Securities (the "Security Register") and of their transfer and
exchange. The Issuer may appoint one or more co-registrars and one or more
additional paying agents with respect to any one or more series. The
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Issuer shall notify the Trustee of the name and
address of any Registrar or Paying Agent not a party to this Indenture. If the
Issuer fails to maintain a Registrar or Paying Agent for the Securities, the
Trustee shall act as such. The Issuer initially appoints the Trustee as Paying
Agent and Registrar.
SECTION 2.4. Paying Agent to Hold Money in Trust. The Issuer shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will (i) hold in trust for the benefit of Securityholders of any
series or the Trustee all money held by the Paying Agent for the payment of
Principal of or interest on the Securities of such series, (ii) notify the
Trustee of any default by the Issuer in making any such payment and (iii) pay
to the Trustee all sums so held in trust by such Paying Agent, upon written
request of the Trustee at any time during the continuance of an Event of
Default. If the Issuer acts as Paying Agent, it shall segregate the money and
hold it as a separate trust fund. The Issuer at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so, the Paying
Agent shall have no further liability for the money.
9
<PAGE> 15
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders of Securities of each series. If the
Trustee is not the Registrar with respect to Securities of any series, the
Issuer shall furnish to the Trustee on or before each Interest Payment Date for
such Securities (and on dates to be determined in the manner provided in
Section 2.1 for any series of Original Issue Discount Securities which by their
terms bear interest only after Maturity), but in no case less frequently than
semiannually, 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 of the Securities of such series.
SECTION 2.6. Transfer and Exchange. Subject to the provisions of
Section 2.10, where Securities are presented to the Registrar with a request to
register transfer or to exchange them for an equal Principal amount of
Securities of the same series of other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. The Registrar shall not be required to register the
transfer or exchange of (i) Securities of any series during a 15-day period
beginning at the opening of business 15 days before the day of mailing of a
redemption notice pursuant to Section 3.3 with respect to Securities of such
series or (ii) any Security selected for redemption in whole or in part, except
the unredeemed portion of a Security redeemed in part. Every Security presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Holder or his attorney duly authorized in
writing, along with a certification of non-foreign status duly executed by the
transferee of such Security. Each Security surrendered for registration of
transfer and exchange shall be cancelled and subsequently disposed of by the
Trustee in accordance with its customary practice. To permit registration of
transfer and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made to any Securityholder for
any transfer or exchange of Securities, except that the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge which
may be imposed in relation to any such transfer or exchange, other than
exchanges pursuant to Section 2.10, 3.6 or 9.5. Notwithstanding the foregoing,
Securities of a series may be exchanged only for Securities of the same series
having identical terms.
SECTION 2.7. Replacement Securities. If the Holder of a Security
claims that the Security has been lost, mutilated, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such lost, mutilated, destroyed or wrongfully
taken Security, a replacement Security of the same series having identical
terms if the Trustee's requirements are met. If required by the Trustee or the
Issuer, such Holder shall provide an indemnity bond sufficient in the judgment
of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent or
any authenticating agent from any loss which any of them may suffer if a
Security is replaced. In connection with the issuance of any replacement
Security under this Section, the Trustee or the Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any replacement Security issued
pursuant to this Section shall constitute conclusive evidence of ownership of
such Security, as if originally issued, regardless of whether the lost,
mutilated, destroyed or wrongfully taken Security shall be found at any time.
SECTION 2.8. Outstanding Securities. The Securities outstanding at any
time are all the Securities authenticated by the Trustee, except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.1, they cease to be
outstanding and interest on them ceases to accrue.
Subject to the provisions of Section 2.9, a Security does not cease to
be outstanding because the Issuer or an Affiliate of the Issuer holds the
Security.
10
<PAGE> 16
SECTION 2.9. Treasury Securities. In determining whether the Holders
of the required Principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Issuer or an Affiliate of the Issuer
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Securities; Global Securities.
(1) Until definitive Securities are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities of any series shall be substantially
in the form of definitive Securities of such series but may have
variations that the Issuer considers appropriate for temporary
Securities. Without unreasonable delay, the Issuer shall prepare and
the Trustee shall authenticate definitive Securities of such series in
exchange for such temporary Securities. Until so exchanged, Holders of
Temporary Securities of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities of
such series.
(2) If the Issuer shall establish pursuant to Section 2.1
that the Securities of a series are to be issued in whole or in part
in the form of one or more Global Securities, then the Issuer shall
execute and the Trustee shall, in accordance with Section 2.1 and
pursuant to a written order of the Issuer signed by two Officers of
the Issuer, authenticate and deliver one or more Global Securities in
temporary or permanent form that (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 one or
more Global Securities, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction and (iv) shall
bear any customary legend reasonably required by the Depositary and
shall further bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities
in definitive form, this 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."
Notwithstanding any other provision of this Section 2.10 or Section
2.6, unless and until it is exchanged in whole or in part for Securities in
definitive form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series 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 such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
None of the Issuer, the Trustee, any Paying Agent or the Registrar has
any direct obligation or responsibility to participants of the Depositary or
beneficial owners of interests in Securities. Without limiting the generality
of the foregoing, none of the Issuer, the Trustee, any Paying Agent or the
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security (including the maintenance, review and
supervision of any such records), for the delivery of any notice to any owner
of a beneficial interest, for the selection of the beneficial owners to receive
payment in the event of any partial redemption of Securities, or for any
consent given or other action taken by the Depositary as owner of the
Securities.
If at any time the Depositary for the Securities of a series notifies
the Issuer that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for Securities of a
series shall no longer be registered or in good standing under the Exchange Act
or other applicable statute or regulation, the Issuer shall appoint a successor
Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Issuer
within 90 days after the Issuer receives such notice or becomes aware of such
condition, the Issuer will execute, and the Trustee, upon receipt of a written
order of the Issuer signed
11
<PAGE> 17
by two Officers of the Issuer instructing the Trustee to authenticate and
deliver definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive form in an aggregate Principal amount
equal to the Principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or
Securities. Furthermore, if there shall have occurred and be continuing an
Event of Default or a Default with respect to any series of Securities, the
Trustee may determine that the Securities of such series shall no longer be
represented by a Global Security or Securities. In any such event, the Issuer
will execute, and the Trustee, upon receipt of a written order of the Issuer
signed by two Officers of the Issuer instructing the Trustee to authenticate
and deliver definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive form in an aggregate Principal amount
equal to the Principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.
If specified by the Issuer pursuant to Section 2.1 with respect to
Securities of a series, the Depositary for such series of Securities may
surrender a Global Security for such series of Securities in exchange, in whole
or in part, for Securities of such series in definitive form on such terms as
are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute and the Trustee shall authenticate and deliver, without charge:
(a) to each person specified by the Depositary, a
new Security or Securities of the same series of any
authorized denomination as requested by such person in an
aggregate Principal amount equal to and in exchange for such
person's beneficial interest in the Global Security; and
(b) to the Depositary, a new Global Security in a
denomination equal to the difference, if any, between the
Principal amount of the surrendered Global Security and the
aggregate Principal amount of Securities delivered to Holders
thereof.
Upon the exchange of a Global Security for Securities in definitive
form, such Global Security shall be cancelled by the Trustee. Securities issued
in exchange for a Global Security pursuant to this Section 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. The Trustee shall
deliver such Securities to the persons in whose names such Securities are so
registered.
SECTION 2.11. Cancellation. The Issuer at any time may deliver
Securities of any series to the Trustee for cancellation. The Registrar and
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of cancelled Securities as the Issuer directs.
The Issuer may not issue new Securities of any series to replace Securities of
such series that have been paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment
of interest on any of the Securities, they shall pay the defaulted interest
plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the persons who are Holders of such Securities on a subsequent
special record date. The Issuer shall fix the record date and payment date
after making arrangements satisfactory to the Trustee for the deposit of such
amounts with the Trustee for payment and after consultation with the Trustee
regarding the selection of such dates. At least 15 days before the record date,
the Issuer shall mail to the Holders of such Securities a notice that states
the record date, payment date, and amount of interest to be paid.
12
<PAGE> 18
ARTICLE 3
REDEMPTION; SINKING FUND
SECTION 3.1. Notices to Trustee. The Issuer may elect to redeem
Securities of any series in accordance with the provisions of such Securities;
provided, however, that if an Event of Default shall have occurred and be
continuing, the Securities of any series may not be redeemed in whole or in
part, unless (i) the Securities of all series are redeemed in whole or (ii) the
Securities of all series are redeemed in part and the Principal amount to be
redeemed is prorated among all Holders so that all Holders of each series
receive in redemption of their outstanding Securities the same Principal amount
per $1,000 of Securities (provided, however, that if the Securities of any such
series are Original Issue Discount Securities, for purposes of this clause
(ii), such proration shall be based upon each $1,000 that would be due and
payable on the redemption date in the event of a declaration of acceleration of
the Stated Maturity thereof pursuant to Section 6.2). The election of the
Issuer to redeem Securities of any series in accordance with the provisions of
such Securities shall be evidenced by or pursuant to a Board Resolution. In
case of any redemption at the election of the Issuer, the Issuer shall, at
least 45 days before the redemption date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such redemption date and in
the case of any redemption of less than all of the Securities of any series
(or, where redemption provisions of any series of Securities are not identical
as to each Security within the series, in case of any redemption at the
election of the Issuer of less than all the Securities with identical
redemption provisions) the Principal amount of the Securities of such series to
be redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to
Section 3.2.
SECTION 3.2. Selection of Securities to be Redeemed. If less than all
of the Securities of a series (or, where the redemption provisions of any
series of Securities are not identical as to each Security within the series,
if less than all the Securities with identical redemption provisions) are to be
redeemed, the Trustee shall, subject to Section 3.1, select the Securities to
be redeemed by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection not more than 45 days before the redemption
date from outstanding Securities of such series (or, if the redemption
provisions of all of the Securities of such series are not identical, from
Securities of such series with identical redemption provisions) not previously
called for redemption. The Trustee may select for redemption portions of the
Principal of Securities of any series that have denominations larger than the
minimum Principal denomination for such series. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.3. Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Trustee shall, in the name of the Issuer
and at the Issuer's expense, mail a notice of redemption to each Holder whose
Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price plus accrued interest, if any;
(3) the name and address of the Paying Agent;
(4) if less than all the outstanding Securities of a series
(or, in the case of series of Securities in which the redemption
provisions are not identical as to each Security within the series,
less than all of the Securities of a series with identical redemption
provisions) are to be redeemed, the identification (and, in the case
of partial redemption, the Principal amounts) of the particular
Securities to be redeemed;
(5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
13
<PAGE> 19
(6) that interest on Securities called for redemption ceases
to accrue on and after the redemption date; and
(7) that the redemption is pursuant to the terms of a sinking
fund, if such is the case.
SECTION 3.4. Effect of Notice of Redemption. Once notice of a
redemption is mailed, Securities called for redemption become due and payable
on the redemption date at the redemption price. Upon surrender to the Paying
Agent, such Securities shall be paid and redeemed at the redemption price,
together with interest accrued thereon to the redemption date; provided,
however, that installments of interest becoming due on or prior to the
redemption date shall be payable to the Holders of such Securities, or one or
more previous Securities evidencing all or a portion of the same debt as that
evidenced by such particular Securities, registered as such at the close of
business on the relevant record date according to their terms and the
provisions of Section 2.12.
SECTION 3.5. Deposit of Redemption Price. On or before the redemption
date, the Issuer shall deposit with the Paying Agent money sufficient to pay
the aggregate redemption price of and accrued interest on all Securities to be
redeemed on that date.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Issuer shall execute and the Trustee shall
authenticate without service charge for the Holder a new Security of the same
series, having terms identical to those of the Securities surrendered, equal in
Principal amount to the unredeemed portion of the Security surrendered. If a
Global Security is so surrendered, such new Security so issued shall be a new
Global Security.
SECTION 3.7. Sinking Fund. Each sinking fund payment provided for by
the terms of Securities of any series shall be applied to the redemption of
such Securities as provided for by the terms of such Securities and this
Section 3.7.
In satisfaction of any minimum or optional sinking fund payment
required or permitted to be made pursuant to the terms of Securities of any
particular series (or, where the sinking fund provisions of each Security
within such series are not identical, then pursuant to the terms of the
Securities with identical sinking fund provisions), the Issuer may (i) deliver
to the Trustee Securities of that series (or, where the sinking fund provisions
of the Securities of such series are not identical, Securities of that series
having identical sinking fund provisions) which have not previously been called
for redemption and which the Issuer has not previously delivered to the Trustee
for cancellation or (ii) notify the Trustee of its election to credit against
the required sinking fund payment the Principal amount of any Securities of
that series (or, if applicable, any Securities of that series with identical
sinking fund provisions) which have been redeemed otherwise than pursuant to
minimum sinking fund payment requirements with respect to the Securities of
such series (or, if applicable, with respect to the Securities of such series
with identical sinking fund provisions); provided, however, 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 for redemption through operation of the sinking
fund and the amount of such minimum or optional sinking fund payment shall be
reduced accordingly.
Not less than 45 days prior to each sinking fund payment date (unless
a shorter notice shall be satisfactory to the Trustee) for any particular
series of Securities (or, where the sinking fund provisions of the Securities
within such series are not identical, for the Securities of such series having
identical sinking fund provisions), the Issuer will give written notice to the
Trustee of the amount of the next succeeding sinking fund payment (including
any optional sinking fund payment which is permitted to be made by the terms of
the Securities) for that series pursuant to the terms of that series (or, if
applicable, for such Securities pursuant to the terms of such Securities), the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by crediting Securities
against the required sinking fund payment pursuant to the preceding paragraph
of this Section and will also deliver to the Trustee any Securities to be so
credited. The Trustee shall select the Securities to be redeemed upon
14
<PAGE> 20
such sinking fund payment date in the manner specified in Section 3.2 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Issuer in the manner provided in Section 3.3. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.4 and 3.6.
SECTION 3.8. Terms of Securities to Govern. Notwithstanding any other
provision of this Article 3, if any provision of any Security of any series
shall conflict with any provision of this Article, the provision of such
Security shall govern.
ARTICLE 4
COVENANTS
SECTION 4.1. Payment of Securities. The Issuer shall pay the Principal
of and any interest on the Securities on the dates and in the manner provided
in the Securities. Principal and interest shall be considered paid on the date
due if the Paying Agent holds on that date, by 10:00 a.m. New York City time,
money deposited with it by or on behalf of the Issuer in immediately available
funds sufficient to pay all Principal and interest then due.
The Issuer shall pay interest on overdue Principal at the rate borne
by such Securities or otherwise as provided in the Securities; they shall pay
interest on overdue installments of interest at the same rate to the extent
permitted by law.
Each payment by the Issuer to the Trustee or the Paying Agent shall be
accompanied by a written notice from the Issuer that specifies the series to
which such payment relates.
SECTION 4.2. SEC Reports. The Issuer and the Guarantor shall furnish
to the Trustee, within 15 days after they file them with the SEC, 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 SEC may by rules and
regulations prescribe) that such Issuer or Guarantor is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event that
the Issuer or the Guarantor is not permitted to file such reports, documents
and information with the SEC, the Issuer or the Guarantor, as the case may be,
will provide substantially similar information to the Issuer, the Guarantor,
the Holders and prospective Holders (upon request) as if the Issuer or the
Guarantor, as the case may be, were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act. The Issuer and the Guarantor also
shall comply with the other provisions of TIA Section 314(a). Provided that the
Issuer and the Guarantor are consolidated entities for accounting purposes, the
Issuer shall be deemed to have satisfied the provisions of this Section 4.2 if
the Guarantor files and provides information, documents, and other reports of
the types otherwise so required, in each case within the applicable rules and
regulations of the SEC (after giving effect to any exemptive relief) because of
the filings by the Guarantor.
SECTION 4.3. Certificate to Trustee.
(1) The Issuer and the Guarantor covenants and agrees to
furnish to the Trustee, within 90 days after the end of each fiscal
year of the Issuer, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer
of the Issuer and the Guarantor, as the case may be, as to each of
such officer's knowledge of the Issuer's and the Guarantor's
compliance with all conditions and covenants under this Indenture and
is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture; provided, for
purposes of this paragraph, such compliance shall be determined
without regard to any period of grace or requirement of notice
provided under this Indenture.
15
<PAGE> 21
(2) The Issuer and the Guarantor shall, so long as any of the
Securities are outstanding, deliver to the Trustee, within five
Business Days of any Officer becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuer or the Guarantor, as the case may
be, is taking or proposes to take with respect thereto.
SECTION 4.4. Maintenance of Office or Agency. The Issuer will maintain
in The City of New York, an office or agency of the Trustee, Registrar and
Paying Agent where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer, exchange,
purchase or redemption, and where notices and demands to or upon the Issuer in
respect of the Securities and this Indenture may be served. The Issuer shall
give prompt written notice to the Trustee of the location, and of any change in
the location, of any such office or agency (other than a change in the location
of the office of the Trustee). If at any time the Issuer shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 12.11.
SECTION 4.5. Further Assurances. From time to time whenever reasonably
requested by the Trustee, the Issuer will make, execute and deliver, or cause
to be made, executed or delivered, any and all such further and other
instruments and assurances as may be reasonably necessary or proper to carry
out the intention of or to facilitate the performance of the terms of this
Indenture or to secure the rights and remedies of the Holders of Securities of
any series provided for in this Indenture, including, but not limited to,
furnishing all necessary information to the Trustee in connection with
calculations and tax reporting relating to any Original Issue Discount
Securities that may be issued by the Issuer hereunder.
ARTICLE 5
SUCCESSORS
SECTION 5.1. When the Issuer May Merge, etc. The Issuer shall not
consolidate or merge into, or sell, assign, transfer or lease all or
substantially all of its assets to, any person unless:
(1) the person is a corporation organized and existing under
the laws of the United States of America or any State thereof or the
District of Columbia;
(2) the person assumes by supplemental indenture all the
obligations of the Issuer under the Securities and this Indenture;
(3) immediately after the transaction no Default or Event of
Default shall exist; and
(4) an Officers' Certificate and Opinion of Counsel have been
delivered to the Trustee to the effect that the conditions set forth
in the preceding clauses (1) through (3) above have been met.
The corporation formed by or resulting from any such consolidation or
merger, or which shall have received all or substantially all of such assets,
shall succeed to and be substituted for the Issuer with the same effect as if
it had been named herein as a party hereto, and thereafter, except in the case
of a lease of all or substantially all of such assets, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities and the Issuer may thereafter liquidate and
dissolve.
16
<PAGE> 22
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" with respect to
Securities of any series occurs if:
(1) there is a default in the payment of interest, if any, on
any Security of such series when the same becomes due and payable and
the Default continues for a period of 30 days, whether or not such
payment is prohibited by the provisions of Article 10 hereof;
(2) there is a default in the payment of the Principal of or
premium, if any, on any Security of such series when the same becomes
due and payable at Maturity, upon redemption or otherwise, whether or
not such payment is prohibited by the provisions of Article 10 hereof;
(3) the Issuer fails to observe or perform any covenant,
condition or agreement on the part of such Issuer to be observed or
performed pursuant to Article 5 hereof;
(4) the Issuer fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities of such
series or this Indenture (other than a covenant included in this
Indenture solely for the benefit of any series of Securities other
than such series or a covenant which has not been breached with
respect to such series) and the Default continues for consecutive days
after the notice specified below;
(5) except as permitted herein, any Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or the Guarantor,
or any person acting on behalf of the Guarantor, shall deny or
disaffirm the Guarantor's obligation under its Guarantee;
(6) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Issuer
or the Guarantor (including a default with respect to Securities of
any series other than such series), whether such Indebtedness now
exists or shall be created hereafter, which default (a) is caused by a
failure to pay such Indebtedness prior to the expiration of the grace
period after final maturity (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its final maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there is then existing a Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million or more; provided, that
if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 10 days
from the continuation of such default beyond the applicable grace
period or the occurrence of such acceleration, as the case may be,
such Event of Default under the Indenture and any consequential
acceleration of any Securities of such series shall be automatically
rescinded;
(7) a final judgment or order or final judgments or orders
are rendered against the Issuer that are unsatisfied and that require
the payment of money, either individually or in an aggregate amount,
that is more than $10.0 million over the coverage under applicable
insurance policies and either (a) a creditor has commenced an
enforcement proceeding upon such judgment (other than a judgment that
is stayed by reason of pending appeal or otherwise) or (b) a 60-day
period transpired during which a stay of such judgment, order,
judgments or orders (by reason of pending appeal or otherwise) was not
in effect;
(8) the Issuer or the Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
17
<PAGE> 23
(b) consents to the entry of an order for relief against
it in an involuntary case or proceeding,
(c) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(d) makes a general assignment for the benefit of its
creditors;
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Issuer or the Guarantor in
an involuntary case or proceeding,
(b) appoints a Custodian of the Issuer or the Guarantor
for all or substantially all of the property of the Issuer or
the Guarantor, or
(c) orders the liquidation of the Issuer or the
Guarantor,
and in each case the order or decree remains unstayed and in
effect for 60 consecutive days.
(10) there occurs any other Event of Default with respect to
the Securities of such series specified in the terms of such series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee notifies the Issuer, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities of such series notify the
Issuer and the Trustee, of the Default and the Issuer does not cure the Default
within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 6.2. Acceleration. If an Event of Default (other than an Event
of Default specified in clauses (8) and (9) of Section 6.1 hereof) with respect
to the Securities of any series occurs and is continuing, the Trustee by notice
to the Issuer, or the Holders of at least 25% in Principal amount of the then
outstanding Securities of that series by written notice to the Issuer and the
Trustee, may declare the Principal (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) of and any accrued and unpaid
interest on all the Securities of that series to be due and payable
immediately. If payment of Securities of any series is accelerated because of
an Event of Default, the Issuer or the Trustee shall notify the holders of
Designated Senior Debt with respect to such series of such acceleration. Upon
such declaration, the Principal (or specified amount) of and accrued interest
on all the Securities of that series shall be due and payable immediately;
provided, however, that so long as any Designated Senior Debt or any commitment
therefor is outstanding, any such notice or declaration shall not become
effective until the earlier of (i) five Business Days after such notice is
delivered to the representative for the Designated Senior debt or (ii) the
acceleration of any Designated Senior Debt and thereafter, payments on the
Securities of such series pursuant to this Article 6 shall be made only to the
extent permitted pursuant to Article 10 herein. Notwithstanding the foregoing,
if any Event of Default specified in clause (8) or (9) of Section 6.1 hereof
relating to the Issuer occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act or notice on
the part of the Trustee or any Holder.
18
<PAGE> 24
After a declaration of acceleration with respect to the Securities of
any series under this Indenture, but before a judgment or decree for payment of
principal, premium, if any, and interest on the Securities of such series due
under this Article 6 has been obtained by the Trustee, Holders of a majority in
principal amount of the then outstanding Securities of such series by written
notice to the Issuer and the Trustee may rescind an acceleration and its
consequences if (i) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay (a) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and (b) all overdue interest on the
Securities of such series, if any, (ii) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (iii) all
existing Events of Default (except nonpayment of principal, premium, if any, or
interest that has become due solely because of the acceleration) have been
cured or waived.
SECTION 6.3. Other Remedies. If an Event of Default with respect to
the Securities of any series occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of Principal of or interest on the
Securities of that series or to enforce the performance of any provision of the
Securities of that 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 Securityholder in exercising any right or remedy
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.4. Waiver of Past Defaults. Holders of not less than a
majority in outstanding Principal amount of the Securities of any series then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Securities of that series waive an existing Default or Event of Default with
respect to that series and its consequences hereunder, except a continuing
Default or Event of Default in the payment of principal of, premium and
liquidated damages, if any, or interest on, the Securities of that series
(including in connection with an offer to purchase) (provided, however, that
the Holders of a majority in outstanding Principal amount of the then
outstanding Securities of such series may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default with respect to such series
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default with respect to such
series or impair any right consequent thereon.
SECTION 6.5. Control by Majority. The Holders of a majority in
aggregate outstanding Principal amount of the Securities of all series affected
(voting as one class) may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to the Securities of such series. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, is unduly prejudicial to the rights of another Securityholder of
such series or any other series, or would involve the Trustee in personal
liability it being understood that the Trustee shall have no duty to ascertain
whether or not such actions or forebearances are unduly prejudicial to such
Holders.
SECTION 6.6. Limitation on Suits. A Holder of Securities of any series
may pursue a remedy with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to Securities of that series;
(2) the Holders of at least 25% in Principal amount of the
Securities of that series make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
19
<PAGE> 25
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provisions of indemnity; and
(5) during such 60-day period, the Holders of a majority in
aggregate outstanding Principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the
request;
provided, however, that it is understood and intended, and is expressly
covenanted by each Holder of every Security of a series with every other Holder
and the Trustee, that no Holders of such series of Securities shall have any
right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the Holders of any
other series of Securities, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture (but without abrogating the provisions of
Article 10), the right of any Holder of a Security to receive payment of
Principal of and interest on the Security, on or after the respective due dates
expressed in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) with respect to Securities occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuer for the whole amount of Principal (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 accrued interest remaining unpaid, together with interest on
overdue Principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest with respect to the Securities as
to which an Event of Default has occurred, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including appeals and
including, without limitation, the reasonable compensation, expenses,
disbursements of the Trustee, its agents and counsel.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in any
judicial proceedings relative to the Issuer, its creditors or its property and
shall be entitled and empowered to collect and receive any money or other
property payable or deliverable on any such claims and to distribute the same,
and any custodian in any such judicial proceedings is authorized hereby by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due to the Trustee under Section 7.7. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, liquidation, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
creditors' committee.
20
<PAGE> 26
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Sections 6.8 and 7.7 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made,
by the Trustee and the costs and expenses of collection;
Second: to Holders of Securities in respect of which or for
the benefit of which such money has been collected, for amounts due
and unpaid on such Securities for Principal (or, if such Securities
are Original Issue Discount Securities, such portion of the Principal
amount as may be specified in the terms that series) and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for Principal and interest,
respectively; and
Third: to the Issuer or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
such Securityholders.
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, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of
more than 10% in Principal amount of the Securities of any series.
ARTICLE 7
TRUSTEE
SECTION 7.1. Duties of Trustee.
(1) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(b) 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
required by the terms of this Indenture to determine whether
or not they conform to the requirements of this Indenture.
(3) 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:
21
<PAGE> 27
(a) this paragraph does not limit the effect of paragraph
(2) of this Section;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) 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 6.5.
(4) Regardless of whether therein expressly so provided,
every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (1), (2), (3) and (5) of this
Section.
(5) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense. No provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Issuer. Money
held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2. Rights of Trustee.
(1) The Trustee may rely and shall be protected in acting or
refraining from acting 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.
(2) 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 such Certificate or Opinion.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(4) 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.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
of any series and may otherwise deal with the Issuer or an Affiliate of the
Issuer with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights. However, the Trustee is subject to Sections 7.10
and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Issuer's use of the proceeds from the Securities,
and it shall not be responsible for any statement in the Securities other than
its authentication.
SECTION 7.5. Notice of Defaults. If a Default in respect of the
Securities of any series occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to the Holders of the Securities of that series
a notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of the Principal or interest on any Security, or in the
payment of any sinking fund or purchase fund installment, the Trustee may
withhold
22
<PAGE> 28
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Securities of that series.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA Section
313(a), within 60 days after the reporting date stated in this Section 7.6, the
Trustee shall mail to Securityholders of each series a brief report dated as of
such reporting date that complies with TIA Section 313(a). The Trustee shall
also comply with TIA Section 313(b). For purposes of this Section 7.6, the
reporting date shall be May 15 of each year. The first reporting date will be
the first May 15 following the issuance of the first series of Securities
hereunder.
A copy of each report at the time of its mailing to Securityholders of
each series shall be filed with the SEC and each stock exchange on which the
Securities of each series are listed. The Issuer will notify the Trustee of the
listing of Securities of any series on a stock exchange.
SECTION 7.7. Compensation and Indemnity. The Issuer shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee upon
request for all reasonable expenses incurred by it. Such expenses shall include
the reasonable compensation and expenses of the Trustee's agents and counsel.
The Issuer shall indemnify the Trustee its directors, officers,
employees and agents against any loss, liability or expense incurred by it
arising out of or in connection with the acceptance or administration of this
Indenture. The Trustee shall notify the Issuer promptly of any claim for which
it may seek indemnity. The Issuer shall defend the claim and the Trustee shall
cooperate in the defense. The indemnities contained in this Section shall
survive the resignation or termination of the Trustee or the termination of
this Indenture. The Trustee may have separate counsel and the Issuer shall pay
the reasonable fees and expenses of such counsel. The Issuer need not pay for
any settlement made without its consent.
The Issuer need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee if the acts or omissions of
the Trustee, if any, relating to such loss, liability or expense, breached any
standard of care applicable to or imposed on the Trustee for such acts or
omissions.
To secure the Issuer'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, except that held in trust to pay Principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(8) or (9) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Issuer's obligation to compensate the Trustee and to pay and
reimburse the Trustee for such expenses, disbursements and advances pursuant to
the provisions of this Section 7.7 shall not be subordinate to the payment of
Senior Debt pursuant to Article 10.
SECTION 7.8. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign at any time with respect to the Securities of
one or more series by so notifying the Issuer. The Holders of a majority in
Principal amount of the Securities of any series may remove the Trustee with
respect to such series by so notifying the Trustee and the Issuer. The Issuer
may remove the Trustee with respect to the Securities of one or more series if:
23
<PAGE> 29
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Securities of any one or
more series, the Issuer shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 7.10. Within one year after
the successor Trustee takes office, the Holders of a majority in Principal
amount of the Securities of each series may appoint a successor Trustee with
respect to the Securities of their respective series to replace the successor
Trustee for the Securities of such series appointed by the Issuer.
If a successor Trustee with respect to the Securities of any series
does not take office within 60 days after the retiring Trustee with respect to
the Securities of that series resigns or is removed, the retiring Trustee, the
Issuer or the Holders of at least 10% in Principal amount of the Securities of
that series may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of that
series.
If the Trustee fails to comply with Section 7.10, with respect to the
Securities of one or more series, any Holder of Securities of such series may
petition any court of competent jurisdiction for the removal of the Trustee
with respect to the Securities of that series and the appointment of a
successor Trustee with respect to the Securities of that series.
In the case of the appointment of a successor Trustee with respect to
all Securities, the successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. 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 all Securityholders. 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 7.7.
In case of the appointment of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Issuer, the retiring
Trustee and each successor Trustee with respect to the Securities of one or
more series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all
series of Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee, with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring, shall continue to be
vested in the retiring Trustee and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and the successor Trustee shall have all the rights, powers and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates. The successor
Trustee shall mail a notice of its succession to the Holders of all Securities
of that or those series to which the appointment of such successor Trustee
relates. The
24
<PAGE> 30
retiring Trustee shall promptly transfer all property held by it with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, subject to the lien provided for in Section 7.7. No
successor Trustee with respect to Securities of any series shall accept
appointment as provided in this Section 7.8 unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under the
provisions of Section 7.10.
SECTION 7.9. Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility, Disqualification. This Indenture shall
always have a Trustee with respect to the Securities of each series which
satisfies the requirements of TIA Section 310(a)(1) and (5). The Trustee shall
always have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition or shall be a
wholly-owned subsidiary of a bank, a trust company or a bank holding company
having, together with its subsidiaries, a reported combined capital and surplus
of at least $25,000,000. The Trustee is subject to TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); it being understood that for the purposes of this Indenture,
with respect to Securities of any series, the provisions of TIA Section 310(b)
with respect to conflicting interests relating to "other securities" shall be
interpreted to include Securities of each other series and with respect to
"other indentures" shall include the provisions of this Indenture relating to
the Securities of such other series.
SECTION 7.11. Preferential Collection of Claims Against the Issuer.
The Trustee is subject to 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.
ARTICLE 8
DISCHARGE OF INDENTURE AND SECURITIES
SECTION 8.1. Satisfaction and Discharge of Indenture. If at any time
(a) the Issuer shall have paid or caused to be paid the Principal of and
interest on all the Securities of any series outstanding hereunder, as and when
the same shall have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities of any series
theretofore authenticated (other than any Securities of such series which shall
have been destroyed, lost or stolen and which shall have been replaced as
provided in Section 2.7 or paid), and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer
with respect to Securities of such series (including payment of all sums due
the Trustee pursuant to Section 7.7), then this Indenture shall cease to be of
further effect with respect to Securities of such series (except as to (i)
rights of registration of transfer and exchange, and the Issuer's right of
optional redemption, if any, (ii) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (iii) rights of the Holders to
receive payments of Principal thereof and interest thereon from the trust fund
established pursuant to Section 8.2, and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, from the trust fund
established pursuant to Section 8.2, (iv) the rights, obligations and
immunities of the Trustee hereunder, (v) the rights of the Securityholders of
such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, (vi) all other obligations of
the Issuer in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 7.7, 7.8 and 8.6 and (vii) the
Issuer's rights pursuant to Sections 7.8, 8.5 and 8.6), and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel, (each stating that all conditions precedent relating to the
satisfaction and discharge of this Indenture have been complied with) and at
the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture with respect
to Securities of such series. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities of
such series.
25
<PAGE> 31
SECTION 8.2. Defeasance. For purposes of Section 8.1, the Issuer shall
be deemed to have paid the Principal of and interest on Securities of any
series outstanding hereunder as and when the same shall have become due and
payable, if the Issuer shall have irrevocably deposited or caused to be
deposited in trust with the Trustee funds in cash and/or U.S. Government
Obligations sufficient without reinvestment thereof to provide for timely
payment of Principal of and interest on the Securities of such series to Stated
Maturity or redemption, as the case may be, not theretofore delivered to the
Trustee for cancellation; provided, however, that (i) in order to have money
available on a payment date to pay Principal or interest on the Securities of
such series, the U.S. Government Obligations shall be payable as to principal
and interest on or before such payment date in such amounts as will provide the
necessary money; and (ii) the Issuer shall obtain an Opinion of Counsel (which
may be based on a ruling from, or published by, the Internal Revenue Service)
to the effect that Holders of the Securities of that series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amounts and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not occurred; and
provided, further, however, that notwithstanding the foregoing, with respect to
any series of Securities which shall at the time be listed for trading on The
New York Stock Exchange, there shall be no deposit of funds in cash and/or in
U.S. Government Obligations with the Trustee to pay the Principal amount, the
redemption price or any installment of interest in order to discharge the
Issuer's obligation in respect of any such payment if at such time the rules of
The New York Stock Exchange prohibit such deposit with the Trustee.
SECTION 8.3. Satisfaction and Discharge of Securities. Securities of a
series shall be deemed to have been paid in full as between the Issuer and the
respective Holders (and future Holders) of Securities of such series upon the
satisfaction and discharge of the Indenture with respect to Securities of such
series pursuant to Section 8.1, except that in the case of such satisfaction
and discharge as a result of compliance with Section 8.2, the Securities of
such series shall be deemed to have been paid in full as between the Issuer and
the respective Holders (and future Holders) of Securities of such series only
if the deposit in trust with the Trustee by the Issuer of the funds in cash
and/or U.S. Government Obligations as provided in Section 8.2 is not
subsequently deemed a preference under the United States Bankruptcy Code as
then in effect.
SECTION 8.4. Application by Trustee of Money or U.S. Government
Obligations. Subject to Section 8.6, all money or U.S. Government Obligations
deposited with the Trustee pursuant to Section 8.2 shall be held in trust and
applied by it to the payment, either directly or through the Paying Agent to
the Holders of the particular Securities of such series for the payment or
redemption of which such money or U.S. Government Obligations shall have been
deposited with the Trustee, of all sums due and to become due thereon for
Principal and interest.
SECTION 8.5. Repayment of Money or U.S. Government Obligations by
Paying Agent. In connection with the satisfaction and discharge of this
Indenture with respect to Securities of any series, all money or U.S.
Government Obligations then held by the Paying Agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be paid or delivered to the Trustee and thereupon the Paying Agent
shall be released from all further liability with respect to such money or U.S.
Government Obligations.
SECTION 8.6. Return of Money, Securities or U.S. Government
Obligations. The Trustee and the Paying Agent shall promptly pay to the Issuer
upon request any excess money, U.S. Government Obligations or Securities held
by them at any time. Any money or U.S. Government Obligations deposited with or
paid to the Trustee or the Paying Agent for the payment of the Principal of, or
interest on any Security of any series and not applied but remaining unclaimed
for two years after the date upon which such Principal or interest shall become
due and payable, shall, upon the request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, be repaid or delivered to the Issuer by the Trustee
for such series or by the Paying Agent, and the Holder of the Security of such
series shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer for any payment which such Holder may be entitled to collect, and all
liability of the Trustee or the Paying Agent with respect to such money or U.S.
Government Obligations shall thereupon cease.
26
<PAGE> 32
ARTICLE 9
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Issuer and the Trustee
may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency or to make
such provisions with respect to matters or questions arising under
this Indenture as may be necessary or desirable and not inconsistent
with this Indenture or with any indenture supplemental hereto or any
Board Resolution establishing any series of Securities, provided that
such amendment does not adversely affect the rights of
Securityholders;
(2) to comply with Section 5.1;
(3) to add additional covenants;
(4) to establish the form or forms or terms with respect to
Securities of any additional series as permitted by Section 2.1;
(5) to evidence and provide for the acceptance of appointment
of a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 7.8; or
(6) to provide for the exchange of Global Securities for
Securities issued hereunder in definitive form and to make all
appropriate changes for such purpose.
SECTION 9.2. With Consent of Holders. The Issuer and the Trustee may
amend this Indenture in a manner affecting the Securities of any series, or may
amend the Securities of such series, with the written consent of the Holders of
at least a majority in Principal amount of the Securities of such series.
However, without the consent of each Securityholder affected, an amendment
under this Section may not:
(1) reduce the percentage in Principal amount of Securities
whose Holders must consent to an amendment;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the Principal of (or, in the case of Original
Issue Discount Securities, the amount of such Securities that would be
due and payable upon acceleration of the Maturity thereof pursuant to
Section 6.2), change the Stated Maturity of or reduce the amount
payable on redemption of or otherwise alter the requirements with
respect to the mandatory redemption of any Security;
(4) make any Security payable in money other than that stated
in the Security;
(5) make any change in Section 6.4 or 6.7 or this Section
9.2; or
(6) modify the provisions of Article 10 in a manner adverse
to the Holders.
After an amendment under this Section becomes effective, the Issuer
shall mail to Securityholders a notice briefly describing the amendment.
27
<PAGE> 33
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of an issue of Senior Debt of
the Issuer unless the holders of that issue, pursuant to its terms, consent to
the change.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall be set forth in a supplemental indenture
that complies with the Trust Indenture Act of 1939, as amended as then in
effect.
SECTION 9.4. Effect of Consents. A consent to an amendment or waiver
by a Holder of a Security is effective upon delivery to the Trustee and is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security; however,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. An amendment or
waiver becomes effective in accordance with its terms and thereafter binds
every Securityholder, except to the extent each Securityholder affected must
consent and such Securityholder did not do so.
SECTION 9.5. Notation on or Exchange of Securities. The Trustee may
place an appropriate notation about an amendment or waiver on any Security
thereafter authenticated. The Issuer in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment or
waiver.
SECTION 9.6. Trustee Protected. The Trustee may, but shall not be
required to, sign any supplemental indenture that affects its rights, duties,
liabilities or immunities under this Indenture or otherwise.
ARTICLE 10
SUBORDINATION OF THE SECURITIES
SECTION 10.1. Agreement to Subordinate.
The Issuer and the Guarantor agree, and each Holder by accepting a
Security and the related Guarantee agrees, that (i) the Indebtedness evidenced
by (a) the Securities, including, but not limited to, the payment of principal
of, premium, if any, and interest on the Securities, and any other payment
obligation of the Company in respect of the Securities is subordinated in right
of payment, to the extent and in the manner provided in this Article, to the
prior payment in full in cash of all Senior Debt of the Issuer (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and (b) the Guarantees and other payment obligations in respect of
the Guarantees 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
Senior Debt of the Guarantor and (ii) the subordination is for the benefit of
the Holders of Senior Debt.
SECTION 10.2. Certain Definitions.
A "distribution" may consist of cash, securities or other property, by
set-off or otherwise.
All Designated Senior Debt now or hereafter existing and all other
obligations relating thereto shall not be deemed to have been paid in full
unless the holders or owners thereof shall have received payment in full in
cash (or other form of payment consented to by the holders of such Designated
Senior Debt) with respect to such Designated Senior Debt and all other
obligations with respect thereto.
28
<PAGE> 34
SECTION 10.3. Liquidation; Dissolution; Bankruptcy.
(1) Upon any payment or distribution of cash, property or
securities to creditors of the Issuer in a liquidation or dissolution
of the Issuer or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Issuer or its
property, or in an assignment for the benefit of creditors or any
marshaling of the Issuer's assets and liabilities:
(a) the holders of Senior Debt of the Issuer shall
be entitled to receive payment in full in cash of all
obligations in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the
rate specified in the applicable Senior Debt, whether or not
a claim for such interest would be allowed in such
proceeding) before the Holders of Securities shall be
entitled to receive any payment or distribution with respect
to the Securities and related obligations (except that
Holders of Securities may receive payments made from any
defeasance trust created pursuant to Section 8.2 hereof
provided that the applicable deposit does not violate Article
8 or 10 of this Indenture); and
(b) until all obligations with respect to the
Senior Debt of the Issuer (as provided in subsection (a)
above) are paid in full in cash, any payment or distribution
to which the Holders of Securities and the related Guarantees
would be entitled shall be made to holders of Senior Debt of
the Issuer (except that Holders of Securities and the related
Guarantees may receive payments made from any defeasance
trust created pursuant to Section 8.2 hereof provided that
the applicable deposit does not violate Article 8 or 10 of
this Indenture).
(2) Upon any payment or distribution of cash, property or
securities to creditors of the Guarantor in a liquidation or
dissolution of the Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the
Guarantor or its property, or in an assignment for the benefit of
creditors or any marshaling of the Guarantor's assets and liabilities:
(a) the holders of Senior Debt of the Guarantor
shall be entitled to receive payment in full in cash of all
obligations in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the
rate specified in the applicable Senior Debt, whether or not
a claim for such interest would be allowed in such
proceeding) before the Holders of Securities and the related
Guarantees shall be entitled to receive any payment or
distribution with respect to the Guarantees made by the
Guarantor (except that Holders of Securities may receive
payments made from any defeasance trust created pursuant to
Section 8.2 hereof provided that the applicable deposit does
not violate Article 8 or 10 of this Indenture); and
(b) until all Obligations with respect to the
Senior Debt of the Guarantor (as provided in subsection (b)
above) are paid in full in cash, any payment or distribution
to which the Holders of Securities and the related Guarantees
shall be made to holders of Guarantee made by the Guarantor
(except that Holders of Securities and the related Guarantees
may receive payments made from any defeasance trust created
pursuant to Section 8.2 hereof provided that the applicable
deposit does not violate Article 8 or 10 of this Indenture).
SECTION 10.4. Default on Designated Senior Debt.
The Issuer and the Guarantor may not make any payment (whether by
redemption, purchase, retirement, defeasance or otherwise) to the Trustee or
any Holder in respect of obligations with respect to the Securities and the
related Guarantees and may not acquire from the Trustee or any Holder any
Securities (other than payments and other distributions made from any
defeasance trust created pursuant to Section 8.2 hereof if the applicable
deposit does not violate Article 8 or 10 of this Indenture) until all principal
and other obligations with respect to the Senior Debt of the Issuer have been
paid in full if:
29
<PAGE> 35
(1) a default in the payment of any principal of, premium, if
any, or interest on Designated Senior Debt occurs; or
(2) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits, or with the
giving of notice or passage of time or both (unless cured or waived)
would permit, holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a person who
is a Representative of the holders of such Designated Senior Debt. If
the Trustee receives any such Payment Blockage Notice, no subsequent
Payment Blockage Notice shall be effective for purposes of this
Section unless and until 360 days shall have elapsed since the date of
commencement of the payment blockage period resulting from the
immediately prior Payment Blockage Notice. No nonpayment default in
respect of any Designated Senior Debt that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Issuer shall resume payments on and distributions in respect of
the Securities and may acquire them and and the Guarantor shall resume making
payments and distributions pursuant to the Guarantees upon:
(a) in the case of a default referred to in Section
10.4(1) hereof the date upon which the default is cured or
waived, or
(b) in the case of a default referred to in Section
10.4(2) hereof, the earliest of (1) the date on which such
nonpayment default is cured or waived, (2) the date the
applicable Payment Blockage Notice is retracted by written
notice to the Trustee from the Person who is a Representative
of the holders of the relevant Designated Senior Debt and (3)
179 days after the date on which the applicable Payment
Blockage Notice is received unless (A) any of the events
described in Section 10.4(1) hereof has occurred and is
continuing or (B) a Default or Event of Default under Section
6.1(8) or (9) has occurred,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.5. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Issuer shall promptly notify holders of Senior Debt of the
acceleration.
SECTION 10.6. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment or
distribution of or in respect of any obligations with respect to the Securities
or the Guarantees at a time when such payment or distribution is prohibited by
Section 10.3 or Section 10.4 hereof, such payment or distribution shall be held
by the Trustee (if the Trustee has actual knowledge that such payment or
distribution is prohibited by Section 10.3 or 10.4) or such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which such Senior
Debt may have been issued, as their respective interests may appear, for
application to the payment of all obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and, except as provided in Section 10.12, shall not be
liable
30
<PAGE> 36
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Holders of Securities or the Issuer, the Guarantor or any other person money
or assets to which any holders of Senior Debt shall be entitled by virtue of
this Article 10, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
SECTION 10.7. Notice by Company.
The Issuer and the Guarantor shall promptly notify the Trustee and the
Paying Agent of any facts known to the Issuer or the Guarantor that would cause
a payment of any obligations with respect to the Securities or the related
Guarantees to violate this Article, but failure to give such notice shall not
affect the subordination of the Securities and the related Guarantees to the
Senior Debt as provided in this Article.
SECTION 10.8. Subrogation.
After all Senior Debt is paid in full and until the Securities are
paid in full, Holders of Securities and the related Guarantees shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Securities and the Guarantees, if any) to the rights of holders of Senior Debt
to receive distributions and payments applicable to Senior Debt to the extent
that distributions and payments otherwise payable to the Holders of Securities
and the related Guarantees have been applied to the payment of Senior Debt. A
payment or distribution made under this Article to holders of Senior Debt that
otherwise would have been made to Holders of Securities and the related
Guarantees is not, as between the Issuer and Holders of Securities, a payment
by the Issuer on the Securities.
SECTION 10.9. Relative Rights.
This Article defines the relative rights of Holders of Securities and
the related Guarantees and holders of Senior Debt. Nothing in this Indenture
shall:
(a) impair, as between the Issuer and Holders of
Securities, the obligation of the Securities, which is
absolute and unconditional, to pay principal of and interest
on the Securities in accordance with their terms;
(b) affect the relative rights of Holders of Securities
and the related Guarantees and creditors of the Issuer other
than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to
receive distributions and payments otherwise payable to
Holders of the Securities and the related Guarantees.
SECTION 10.10. Subordination May Not Be Impaired by the Issuer or the
Guarantor.
No right of any present or future holders of any Senior Debt to
enforce subordination as provided in this Article 10 will at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Issuer or the Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Issuer or the Guarantor with the
terms of this Indenture, regardless of any knowledge thereof that any such
holder of Senior Debt may have or otherwise be charged with. The provisions of
this Article 10 are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt.
SECTION 10.11. Payment, Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
31
<PAGE> 37
Upon any payment or distribution of assets or securities of the Issuer
or the Guarantor referred to in this Article 10, the Trustee and the Holders of
Securities and the related Guarantees shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction or upon any certificate
of such Representative or of the liquidating trustee or agent or other person
making any payment or distribution to the Trustee or to the Holders of
Securities and the related Guarantees for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the Senior Debt and other Indebtedness of the Issuer or the Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities and the Guarantees unless the Trustee shall
have received at its Corporate Trust Office at least one Business Day prior to
the date of such payment written notice of facts that would cause the payment
of any obligations with respect to the Securities or the Guarantees to violate
this Article, which notice shall specifically refer to Section 10.3 or 10.4
hereof. Only the Issuer or a Representative may give the notice. Nothing in
this Article 10 shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights.
SECTION 10.13. Authorization to Effect Subordination.
Each Holder by the Holder's acceptance thereof authorizes and directs
the Trustee on the Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 10, and
appoints the Trustee to act as the Holder's attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 6.9 hereof
at least 30 days before the expiration of the time to file such claim, then the
holders of the Senior Debt of the Issuer are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities and the
related Guarantees.
SECTION 10.14. Amendments.
No amendment may be made to the provisions of or the definitions of
any terms appearing in this Article 10, or to the provisions of Section 6.2
relating to the Designated Senior Debt, that adversely affects the rights of
any holder of Senior Debt then outstanding unless the holders of such Senior
Debt (or any group or Representative authorized to give a consent) consent to
such change.
SECTION 10.15. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 10.9 of this
Indenture, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 10 or the obligations hereunder of the
Holders to the holders of Senior Debt, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding or secured; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Issuer and the Guarantor and any other person.
32
<PAGE> 38
ARTICLE 11
THE GUARANTEES
SECTION 11.1. The Guarantees. The Guarantor hereby unconditionally
guarantees to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the
obligations of the Issuer hereunder or thereunder, that: (a) the principal of
and premium and interest, on the Securities shall be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on premium and interest, on
the Securities, if any, if lawful, and all other obligations of the Issuer to
the Holders or the Trustee hereunder or thereunder shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantor shall be obligated to pay the same immediately. The
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuer, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest, notice and all demands whatsoever and covenants
that this Guarantee shall not be discharged except by complete performance of
the obligations contained in the Securities and this Indenture. If any Holder
or the Trustee is required by any court or otherwise to return to the Issuer or
the Guarantor, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Issuer or the Guarantor, any amount paid by
either to the Trustee or such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders of Securities in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Guarantee.
SECTION 11.2. Execution and Delivery of Guarantees. To evidence its
Guarantee set forth in Section 11.1, the Guarantor hereby agrees that a
notation of such Guarantee shall be endorsed by an Officer of the Guarantor on
each Security authenticated and delivered by the Trustee, that this Indenture
shall be executed on behalf of the Guarantor by an Officer of the Guarantor and
attested to by an Officer of the Guarantor and that the Guarantor shall deliver
to the Trustee an Opinion of Counsel that the foregoing have been duly
authorized, executed and delivered by the Guarantor and that such Guarantee is
a valid and legally binding obligation of the Guarantor, enforceable against
such Guarantor in accordance with its terms, except insofar as (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
The Guarantor hereby agrees that its Guarantee set forth in
Section 11.1 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
33
<PAGE> 39
If an Officer of the Guarantor whose signature is on this
Indenture or on the applicable Guarantee no longer holds that office at the
time the Trustee authenticates the Security on which such Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantees set forth in this Indenture on behalf of the Guarantor.
SECTION 11.3. When the Issuer May Merge, etc. The Guarantor shall not
consolidate or merge into, or sell, assign, transfer or lease all or
substantially all of its assets to any person other than the Issuer and any
other subsidiary of the Guarantor unless:
(1) the person is a corporation organized and existing under
the laws of the United States of America or any State thereof or the
District of Columbia;
(2) the person assumes by supplemental indenture all the
obligations of the Guarantor under the Securities and this Indenture;
(3) immediately after the transaction no Default shall exist;
and
(4) an Officers' Certificate and Opinion of Counsel have been
delivered to the Trustee to the effect that the conditions set forth
in the preceding clauses (1) through (3) above have been met.
Notwithstanding the foregoing, the Guarantor shall not be permitted to
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person), another corporation, person or entity pursuant to the
preceding sentence if such consolidation or merger would not be permitted by
Section 5.1 hereof.
In case of any such consolidation or merger and upon the
assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Guarantee endorsed upon the Securities and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor corporation shall succeed to and be substituted for
the Guarantor with the same effect as if it had been named herein as the
Guarantor. Such successor corporation thereupon may cause to be signed any or
all of the Guarantees to be endorsed upon all of the Securities issuable
hereunder which theretofore shall not have been signed by the Issuer and
delivered to the Trustee. All the Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Guarantees had been issued at the date of the
execution hereof.
Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of the Guarantor with or into the Issuer, or shall
prevent any sale or conveyance of the property of the Guarantor as an entirety
or substantially as an entirety to the Issuer.
SECTION 11.4. "Trustee" to Include Paying Agent. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Issuer
and be then acting hereunder, the term "Trustee" as used in Article 10 and this
Article 11 shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully and for all intents and purposes as if such Paying Agent were named in
Article 10 and this Article 11 in place of the Trustee.
SECTION 11.5. Subordination of Guarantees. The obligations of the
Guarantor under its Guarantee pursuant to this Article 11 shall be junior and
subordinated to the Senior Debt of the Guarantor pursuant to Article 10 hereof.
For the purposes of the foregoing sentence, the Trustee and the Holders shall
have the right to receive and/or retain payments or distributions by or on
behalf of any of the Guarantor only at such times as they may receive and/or
retain payments in respect of the Securities pursuant to this Indenture,
including Article 10 hereof.
34
<PAGE> 40
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision that is deemed
to be included in this Indenture by the TIA, the required provision shall
control. The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture whether or not physically contained herein.
SECTION 12.2. Notices. Any notice or communication by the Issuer or
the Trustee to the other shall be in writing and shall be delivered in person
or mailed by first-class mail (registered or certified, return receipt
requested), telecopier or overnight air courier to the other's address stated
in Section 12.11; provided, however, that any such notice shall be deemed duly
given when such notice is received by the Issuer or the Trustee, as the case
may be. The Issuer or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail (registered or certified, return receipt requested) or
overnight courier to his address shown on the Security Register. Failure to
mail a notice or communication to a Securityholder or any defect in a notice
shall not affect the sufficiency thereof with respect to any other
Securityholders.
Except as provided above, if a notice or communication is mailed in
the manner and within the time prescribed above, it shall be deemed duly given,
whether or not the addressee receives it.
If the Issuer mails a notice or communication to Securityholders, they
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuer, the Trustee, the Registrar and anyone else affected
shall be entitled to the protection of TIA Section 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Issuer to the Trustee to take any action
under this Indenture, the Issuer shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that each person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
35
<PAGE> 41
(3) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
person, such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officers know that the opinion
with respect to the matters upon which their certificate may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters the information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representation with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous, or in the exercise of reasonable care should know that
the same is erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an accountant (who may be an employee of the
Issuer), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which the certificate, statement or opinion may be
based as aforesaid is erroneous, or in the exercise of reasonable care should
know that the same is erroneous. Any certificate or opinion of any independent
firm of public accountants filed with the Trustee shall contain a statement
that such firm is independent.
SECTION 12.6. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by written consent or at a meeting of Holders of
Securities of any series. The fact and date of the execution of a written
consent or other writing by any such person shall be established in accordance
with the procedures specified in such reasonable rules, and the ownership of
Securities of any series shall be established by the Security Register for such
series maintained by the Registrar. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 12.7. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions in any place of payment are not
required to be open. If a payment date with respect to a particular series of
Securities is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 12.8. No Recourse Against Others. No person shall have any
recourse under or upon any obligation or agreement of the Issuer under this
Indenture or the Securities of any series or because of any debt evidenced by
the Securities of any series against any stockholder, officer, employee or
director, as such, of any of the Issuer. By accepting a Security of any series,
each Holder waives and releases all such liability as a part of the
consideration for the issuance thereof.
SECTION 12.9. Interest Limitation. If any usury law now or at any time
hereafter in force shall be applicable to this Indenture or the Securities of
any series or any other document or instrument related hereto or thereto, it is
the intention of the Issuer and the Trustee to conform strictly to any such
usury laws and any subsequent revisions or repeals thereof. In furtherance
thereof, the Issuer and the Trustee stipulate and agree that none of the terms
and provisions contained in this Indenture or the Securities of any series or
any other document or instrument related hereto or thereto shall ever be
construed to give rise to a contract or obligation to pay interest in excess of
the maximum amount permitted to be contracted for, taken, reserved, charged,
collected or received under any applicable law.
36
<PAGE> 42
SECTION 12.10. Duplicate Originals. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 12.11. Addresses.
The Issuers's address is:
Mesa Operating Co.
1400 Williams Square West
5205 North O'Connor Boulevard
Irving, Texas 75039
Attention: Treasurer
Telecopier No.: (972) 402-7028
The Guarantor's address is:
MESA Inc.
1400 Williams Square West
5205 North O'Connor Boulevard
Irving, Texas 75039
Attention: Treasurer
Telecopier No.: (972) 402-7028
The Trustee's address is:
Bankers Trust Company
4 Albany Street, 4th Floor
Mail Stop # 5041
New York, NY
Attention: Corporate Trust and Agency Group
Telecopier No. (212) 250-6392
SECTION 12.12. Record Date for Action by Securityholders. The Issuer
(or, if a deposit has been made pursuant to Section 8.2 or if an Event of
Default has occurred, the Trustee) may set a record date for purposes of
determining the identity of Holders entitled to vote or consent to any action
by vote or consent authorized or permitted under this Indenture, which record
date shall be no later than ten days nor more than 30 days prior to the first
solicitation of such vote or consent or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 2.5 hereof prior to such
solicitation. If a record date is fixed, those persons who were Holders of
Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.
SECTION 12.13. Governing Law. The laws of the State of New York shall
govern the construction and interpretation of this Indenture and the
Securities, without regard to principles of conflicts of laws. The Issuer
irrevocably submits to the non-exclusive jurisdiction of any United States
federal or New York state court sitting in The City of New York in any action
or proceeding arising out of or relating to this Indenture or the Securities,
and the Issuer irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court.
SECTION 12.14. Payments for Consent. The Issuer shall not, directly or
indirectly, pay or cause to be paid, or cause any of their Affiliates to pay or
cause to be paid, any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or
37
<PAGE> 43
provisions of this Indenture or the Securities, unless such consideration is
offered to be paid to all Holders whose consent, waiver or agreement to amend
is required for the Issuer to effect such consent, waiver or amendment.
SECTION 12.15. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 12.16. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Issuer or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.17. Severability. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
SECTION 12.18. Successors. All agreements of the Issuer in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 12.19. Qualification of Indenture. The Issuer shall qualify
this Indenture under the TIA and shall pay all costs and expenses (including
attorneys' fees for the Issuer and the Trustee) incurred in connection
therewith, including, without limitation, costs and expenses of qualification
of the Indenture and the Securities and printing this Indenture and the
Securities. The Trustee shall be entitled to receive from the Issuer any such
Officers' Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this Indenture
under the TIA.
SECTION 12.20. Counterpart 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.
38
<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first above written.
MESA INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MESA OPERATING CO.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
BANKERS TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
39
<PAGE> 1
EXHIBIT 5
BAKER & BOTTS, L.L.P.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
0C602.0308 February 4, 1997
MESA Inc.
Mesa Operating Co.
2001 Ross Avenue
Suite 2600
Dallas, Texas 75201
Ladies and Gentlemen:
As set forth in the Registration Statement on Form S-3
(Registration No. 333-20483) filed with the Securities and Exchange Commission
(the "Commission") on January 27, 1997 (the "Registration Statement") by MESA
Inc., a Texas corporation (the "Company"), and Mesa Operating Co., a Delaware
corporation ("MOC" and together with the Company, the "Registrants"), under the
Securities Act of 1933, as amended (the "Act"), relating to (i) unsecured debt
securities of MOC (the "Debt Securities") (ii) the guarantees of the payment of
the principal of, premium, if any, and interest on the Debt Securities by the
Company (the "Guarantees") and (iii) shares of common stock, par value $.01 per
share, of the Company (the "Common Stock") (the Debt Securities, the Guarantees
and Common Stock are collectively referred to as the "Securities"), for
issuance from time to time pursuant to Rule 415 under the Act for an aggregate
initial offering price not to exceed $500,000,000, certain legal matters in
connection with the Securities are being passed upon for you by us.
In our capacity as your counsel in the connection referenced
above, we have examined (i) the charter and bylaws of each of the Registrants,
each as amended to date, (ii) the form of Senior Indenture to be executed by
the Registrants and a U.S. banking institution, as trustee, pursuant to which
the Debt Securities and Guarantees may be issued (the "Senior Indenture"),
(iii) the form of Subordinated Indenture to be executed by the Registrants and
a U.S. banking institution, as trustee, pursuant to which the Debt Securities
and Guarantees may be issued (the "Subordinated Indenture") and (iv) the
originals, or copies certified or otherwise identified, of corporate records of
the Registrants, certificates of public officials and of representatives of the
Registrants, statutes and other instruments and documents, as a basis for the
opinions hereinafter expressed.
<PAGE> 2
-2- February 4, 1997
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective, (ii) a prospectus supplement relating
to the Registration Statement (the "Prospectus Supplement") will have been
prepared and filed with the Commission describing the Securities offered
thereby, (iii) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner stated in the
Registration Statement and the appropriate Prospectus Supplement, and (iv) a
definitive purchase, underwriting or similar agreement with respect to any
Securities offered will have been duly authorized and validly executed and
delivered by the Company and/or MOC, as the case may be, and the other parties
thereto.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State
of Texas.
2. MOC is a corporation duly organized and validly
existing in good standing under the laws of the State of
Delaware.
3. With respect to the shares of Common Stock, when (i)
the board of directors of the Company or, to the extent
permitted by Article 2.36 of the Business Corporation Act of
the State of Texas, a duly constituted and acting committee
thereof (such board of directors or committee being
hereinafter referenced as the "Company Board"), has taken all
necessary corporate action to approve the issuance of and the
terms of the offering of shares of Common Stock and related
matters and (ii) certificates representing such shares of
Common Stock have been duly executed, countersigned,
registered and delivered in accordance with the applicable
definitive purchase, underwriting or similar agreement
approved by the Company Board upon payment of the
consideration therefor (which shall not be less than the par
value of the Common Stock), the shares of Common Stock will be
duly authorized, validly issued, fully paid and
non-assessable.
4. With respect to Debt Securities and Guarantees to be
issued under the Senior Indenture, when (i) the Senior
Indenture has been duly authorized, validly executed and
delivered by MOC, the Company and the trustee thereunder, (ii)
the Senior Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, (iii) the board of
directors of MOC or, to the extent permitted by Section 141(c)
of
<PAGE> 3
-3- February 4, 1997
the General Corporation Law of the State of Delaware, a duly
constituted and acting committee thereof (such board of
directors or committee being hereinafter referenced as the
"MOC Board") has taken all necessary corporate action to
approve the issuance and terms of such Debt Securities, the
terms of the offering thereof and related matters, (iv) the
Company Board has taken all necessary corporate action to
approve the issuance and terms of such Guarantees, the terms
of the offering thereof and related matters, (v) such Debt
Securities and such Guarantees have been duly executed,
authenticated, issued and delivered in accordance with the
provisions of the Senior Indenture and the applicable
definitive purchase, underwriting or similar agreement
approved by each of the MOC Board and the Company Board and
(vi) payment of the consideration for such Debt Securities
provided for in such agreement has been made, such Debt
Securities and such Guarantees will be legally issued and will
constitute binding obligations of MOC and such Guarantees will
be legally issued and will constitute binding obligations of
the Company.
5. With respect to Debt Securities and Guarantees to be
issued under the Subordinated Indenture, when (i) the
Subordinated Indenture has been duly authorized, validly
executed and delivered by MOC, the Company and the trustee
thereunder, (ii) the Subordinated Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended,
(iii) the MOC Board has taken all necessary corporate action
to approve the issuance and terms of such Debt Securities, the
terms of the offering thereof and related matters, (iv) the
Company Board has taken all necessary corporate action to
approve the issuance and terms of such Guarantees, the terms
of the offering thereof and related matters, (v) such Debt
Securities and such Guarantees have been duly executed,
authenticated, issued and delivered in accordance with the
provisions of the Subordinated Indenture and the applicable
definitive purchase, underwriting or similar agreement
approved by each of the MOC Board and the Company Board and
(vi) payment of the consideration for such Debt Securities and
such Guarantees provided for in such agreement has been made,
such Debt Securities will be legally issued and will
constitute binding obligations of MOC and such Guarantees will
be legally issued and will constitute binding obligations of
the Company.
<PAGE> 4
-4- February 4, 1997
We hereby consent to the filing of this opinion of counsel as Exhibit 5
to the Registration Statement. We also consent to the reference to our Firm
under the heading "Legal Matters" in the Prospectus forming a part of the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ BAKER & BOTTS, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement, dated February 5, 1997, of our
report on the financial statements of MESA, Inc. as of December 31, 1995 and
1994, and for each of the three years in the period ended December 31, 1995, and
to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
February 5, 1997
<PAGE> 1
EXHIBIT 26.1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
______________________________
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT
OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
_________________________________
MESA INC.
MESA OPERATING CO.
(Exact name of obligor as specified in its charter)
TEXAS 75-2394500
DELAWARE 75-2516853
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
1400 WILLIAMS SQUARE WEST STEPHAN K. GARDNER
5205 NORTH O'CONNOR BOULEVARD 1400 WILLIAMS SQUARE WEST
IRVING, TEXAS 75039 5205 NORTH O'CONNOR BOULEVARD
(972) 444-9001 IRVING, TEXAS 75039
(972) 444-9001
(Address of principal executive offices) (Address of agent for service)
SENIOR DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171, and
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, copy attached.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33- 21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company,
as amended on January 21,1997 - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No.
333-15263.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No.
22-18864.
EXHIBIT 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of September
30, 1996.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State of New York,
on the 3rd day of February, 1997.
BANKERS TRUST COMPANY
By: /s/ MATTHEW SEELEY
------------------------------
Matthew Seeley
Vice President
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State of New York,
on the 3rd day of February, 1997.
BANKERS TRUST COMPANY
By: Matthew Seeley
---------------------------
Matthew Seeley
Vice President
-5-
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: / 0 / 0 / 6 / 2 / 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS SEPTEMBER 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
| C400 |
-----------------------------------------|
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------------------|
<S> <C> |
ASSETS | / / / / / / / / / / / / / / / / / / |
1. Cash and balances due from depository institutions | / / / / / / / / / / / / / / / / / / |
(from Schedule RC-A): | / / / / / / / / / / / / / / / / / / |
a. Noninterest-bearing balances and currency | / / / / / / / / / / / / / / / / / / |
and coin(1) ............................... | 0081 809,000 |1.a.
b. Interest-bearing balances(2) .............. | 0071 4,453,000 |1.b.
2. Securities: | / / / / / / / / / / / / / / / / / / |
a. Held-to-maturity securities (from Schedule RC-B, | / / / / / / / / / / / / / / / / / / |
column A) ....................... | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, | / / / / / / / / / / / / / / / / / / |
column D)...................................... | 1773 4,133,000 |2.b.
3. Federal funds sold and securities purchased under agreements | / / / / / / / / / / / / / / / / / / |
to resell in domestic offices of the bank and of its | / / / / / / / / / / / / / / / / / / |
Edge and Agreement subsidiaries, and in IBFs: | / / / / / / / / / / / / / / / / / / |
a. Federal funds sold................................... | 0276 5,933,000 |3.a.
b. Securities purchased under agreements to resell ..... | 0277 413,000 |3.b.
4. Loans and lease financing receivables: | / / / / / / / / / / / / / / / / / / |
a. Loans and leases, net of unearned income | / / / / / / / / / / / / / / / / / / |
(from Schedule RC-C) RCFD 2122 27,239,000 | / / / / / / / / / / / / / / / / / / |4.a.
b. LESS: Allowance for loan and | / / / / / / / / / / / / / / / / / / |
lease losses.............. RCFD 3123 917,000 | / / / / / / / / / / / / / / / / / / |4.b.
c. LESS: Allocated transfer risk reserve ....... | / / / / / / / / / / / / / / / / / / |
RCFD 3128 0 | / / / / / / / / / / / / / / / / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / / / / / / / / / / / |
allowance, and reserve (item 4.a minus 4.b and 4.c) .... | 2125 26,322,000 |4.d.
5. Assets held in trading accounts .............................. | 3545 36,669,000 |5.
6. Premises and fixed assets (including capitalized leases) ...... | 2145 870,000 |6.
7. Other real estate owned (from Schedule RC-M) ................. | 2150 215,000 |7.
8. Investments in unconsolidated subsidiaries and | / / / / / / / / / / / / / / / / / / |
associated companies (from Schedule RC-M) | 2130 212,000 |8.
9. Customers' liability to this bank on acceptances outstanding .. | 2155 577,000 |9.
10. Intangible assets (from Schedule RC-M) ........................ | 2143 18,000 |10.
11. Other assets (from Schedule RC-F) ............................ | 2160 8,808,000 |11.
12. Total assets (sum of items 1 through 11) .................... | 2170 89,432,000 |12.
</TABLE>
__________________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands | / / / / / / / / Bil Mil Thou |
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES | / / / / / / / / / / / / / / / / / / |
13. Deposits: | / / / / / / / / / / / / / / / / / / |
a. In domestic offices (sum of totals of columns A | |
and C from Schedule RC-E, part I) | RCON 2200 9,391,000 |13.a.
(1) Noninterest-bearing(1) ....RCON 6631 2,734,000..... | / / / / / / / / / / / / / / / / / / |13.a.(1)
(2) Interest-bearing ...........RCON 6636 6,657,000..... | / / / / / / / / / / / / / / / / / / |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, | / / / / / / / / / / / / / / / / / / |
and IBFs (from Schedule RC-E part II) | RCFN 2200 23,385,000 |13.b.
(1) Noninterest-bearing .......RCFN 6631 654,000 | / / / / / / / / / / / / / / / / / / |13.b.(1)
(2) Interest-bearing ..........RCFN 6636 22,731,000 | / / / / / / / / / / / / / / / / / / |13.b.(2)
14. Federal funds purchased and securities sold under agreements to | / / / / / / / / / / / / / / / / / / |
repurchase in domestic offices of the bank and of its Edge and | / / / / / / / / / / / / / / / / / / |
Agreement subsidiaries, and in IBFs: | / / / / / / / / / / / / / / / / / / |
a. Federal funds purchased..................................... | RCFD 0278 3,090,000 |14.a.
b. Securities sold under agreements to repurchase.............. | RCFD 0279 99,000 |14.b.
15. a. Demand notes issued to the U.S. Treasury.................... | RCON 2840 0 |15.a.
b. Trading liabilities......................................... | RCFD 3548 18,326,000 |15.b.
16. Other borrowed money: | / / / / / / / / / / / / / / / / / / |
a. With original maturity of one year or less.................. | RCFD 2332 17,476,000 |16.a.
b. With original maturity of more than one year................ | RCFD 2333 2,771,000 |16.b.
17. Mortgage indebtedness and obligations under capitalized leases... | RCFD 2910 31,000 |17.
18. Bank's liability on acceptances executed and outstanding......... | RCFD 2920 577,000 |18.
19. Subordinated notes and debentures................................ | RCFD 3200 1,228,000 |19.
20. Other liabilities (from Schedule RC-G)........................... | RCFD 2930 8,398,000 |20.
21. Total liabilities (sum of items 13 through 20)................... | RCFD 2948 84,772,000 |21.
22. Limited-life preferred stock and related surplus................. | RCFD 3282 0 |22.
EQUITY CAPITAL | / / / / / / / / / / / / / / / / / / |
23. Perpetual preferred stock and related surplus.................... | RCFD 3838 500,000 |23.
24. Common stock..................................................... | RCFD 3230 1,002,000 |24.
25. Surplus (exclude all surplus related to preferred stock)......... | RCFD 3839 527,000 |25.
26. a. Undivided profits and capital reserves...................... | RCFD 3632 3,017,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale | / / / / / / / / / / / / / / / / / / |
securities.................................................. | RCFD 8434 ( 16,000) |26.b.
27. Cumulative foreign currency translation adjustments.............. | RCFD 3284 ( 370,000) |27.
28. Total equity capital (sum of items 23 through 27)................ | RCFD 3210 4,660,000 |28.
29. Total liabilities, limited-life preferred stock, and equity | / / / / / / / / / / / / / / / / / / |
capital (sum of items 21, 22, and 28)............................ | RCFD 3300 89,432,000 |29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of Number
auditing work performed for the bank by independent external -------------
auditors as of any date during 1995................................ | RCFD6724 N/A | M.1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by
with generally accepted auditing standards by a other external auditors (may be required by
certified public accounting firm which submits a report state chartering authority)
on the bank
5 = Review of the bank's financial statements
2 = Independent audit of the bank's parent holding company by external auditors
conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately)
7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by 8 = No external audit work
state chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE> 8
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER
SECTION 8005 OF THE BANKING LAW," dated March 20, 1996, providing for an
increase in authorized capital stock from $1,351,666,670 consisting of
85,166,667 shares with a par value of $10 each designated as Common Stock and
500 shares with a par value of $1,000,000 each designated as Series Preferred
Stock to $1,501,666,670 consisting of 100,166,667 shares with a par value of
$10 each designated as Common Stock and 500 shares with a par value of
$1,000,000 each designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York, this 21ST day of MARCH in the Year of our Lord one thousand nine
hundred and NINETY-SIX.
Peter M. Philbin
------------------------------
Deputy Superintendent of Banks
<PAGE> 9
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
_____________________________
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a
Managing Director and an Assistant Secretary of Bankers Trust Company, do
hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby
amended to increase the aggregate number of shares which the corporation shall
have authority to issue and to increase the amount of its authorized capital
stock in conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock
outstanding, which reads as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670),
divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty- Seven (85,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Five Hundred One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,501,666,670),
divided into One Hundred Million, One Hundred Sixty Six Thousand, Six
Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
<PAGE> 10
6. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
20th day of March , 1996.
James T. Byrne, Jr.
-------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
-------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows
the contents thereof, and that the statements herein contained are true.
Lea Lahtinen
-------------------------------
- -------- Lea Lahtinen
Sworn to before me this 20th day
of March, 1996.
Sandra L. West
- -----------------------------
Notary Public
SANDRA L. WEST Counterpart filed in the
Notary Public State of New York Office of the Superintendent of
No. 31-4942101 Banks, State of New York,
Qualified in New York County This 21st day of March, 1996
Commission Expires September 19,
1996
<PAGE> 1
EXHIBIT 26.2
-------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)___________
-------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
-------------------
MESA INC.
MESA OPERATING CO.
(Exact name of obligor as specified in its charter)
TEXAS 75-2394500
DELAWARE 75-2516853
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
1400 WILLIAMS SQUARE WEST STEPHAN K. GARDNER
5205 NORTH O'CONNOR BOULEVARD 1400 WILLIAMS SQUARE WEST
IRVING, TEXAS 75039 5205 NORTH O'CONNOR BOULEVARD
(972) 444-9001 IRVING, TEXAS 75039
(972) 444-9001
(Address of principal executive offices)(Address of agent for service)
SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171, and
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, copy attached.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to
exercise corporate trust powers -
Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust
Company, as amended on January 21,1997 -
Incorporated herein by reference to Exhibit 4
filed with Form T-1 Statement, Registration
No. 333-15263.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to Exhibit 4
filed with Form T-1 Statement, Registration
No. 22-18864.
EXHIBIT 7 - A copy of the latest report of
condition of Bankers Trust Company dated as
of September 30, 1996.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State of New York,
on the 3rd day of February, 1997.
BANKERS TRUST COMPANY
By: /s/ MATTHEW SEELEY
------------------------------
Matthew Seeley
Vice President
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State of New York,
on the 3rd day of February, 1997.
BANKERS TRUST COMPANY
By: Matthew Seeley
-----------------
Matthew Seeley
Vice President
-5-
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-BK:36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: / 0 / 0 / 6 / 2 / 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS SEPTEMBER 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<S> <C>
--------
C400
----------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou#
- ------------------------------------------------------------------------------------------------------------------------
ASSETS / / / / / / / / / / / / / / / / / /
1. Cash and balances due from depository institutions (from Schedule RC-A): / / / / / / / / / / / / / / / / / /
a. Noninterest-bearing balances and currency and coin(1) ............ 0081 809,000 1.a.
b. Interest-bearing balances(2) ..................................... 0071 4,453,000 1.b.
2. Securities: / / / / / / / / / / / / / / / / / /
a. Held-to-maturity securities (from Schedule RC-B, column A) ....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 4,133,000 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices / / / / / / / / / / / / / / / / / /
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: / / / / / / / / / / / / / / / / / /
a. Federal funds sold ................................................ 0276 5,933,000 3.a.
b. Securities purchased under agreements to resell ................... 0277 413,000 3.b.
4. Loans and lease financing receivables: / / / / / / / / / / / / / / / / / /
a. Loans and leases, net of unearned
income (from Schedule RC-C) RCFD 2122 27,239,000 / / / / / / / / / / / / / / / / / / 4.a.
b. LESS: Allowance for loan and lease
losses.................................RCFD 3123 917,000 / / / / / / / / / / / / / / / / / / 4.b.
c. LESS: Allocated transfer risk
reserve ...............................RCFD 3128 0 / / / / / / / / / / / / / / / / / / 4.c.
d. Loans and leases, net of unearned income, / / / / / / / / / / / / / / / / / /
allowance, and reserve (item 4.a minus 4.b and 4.c) ............... 2125 26,322,000 4.d.
5. Assets held in trading accounts ......................................... 3545 36,669,000 5.
6. Premises and fixed assets (including capitalized leases) ................ 2145 870,000 6.
7. Other real estate owned (from Schedule RC-M) ............................ 2150 215,000 7.
8. Investments in unconsolidated subsidiaries
and associated companies (from Schedule RC-M)............................ 2130 212,000 8.
9. Customers' liability to this bank on acceptances outstanding ............ 2155 577,000 9.
10. Intangible assets (from Schedule RC-M) ................................... 2143 18,000 10.
11. Other assets (from Schedule RC-F) ........................................ 2160 8,808,000 11.
12. Total assets (sum of items 1 through 11) ................................. 2170 89,432,000 12.
----------------------------------------
</TABLE>
- ---------------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 9/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: / 0 / 0 / 6 / 2 / 3
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<S> <C>
----------------------------------------
Dollar Amounts in Thousands Bil Mil Thou#
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES / / / / / / / / / / / / / / / / / / / / / / / /
13. Deposits: / / / / / / / / / / / / / / / / / / / / / / / /
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part I) RCON 2200 9,391,000 13.a.
(1) Noninterest-bearing(1)...... RCON 6631 2,734,000 / / / / / / / / / / / / / / / / / / / / / / / / 13.a.(1)
(2) Interest-bearing.............RCON 6636 6,657,000 / / / / / / / / / / / / / / / / / / / / / / / / 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E / / / / / / / / / / / / / / / / / / / / / / / /
part II) RCFN 2200 23,385,000 13.b.
(1) Noninterest-bearing ...........RCFN 6631 654,000 / / / / / / / / / / / / / / / / / / / / / / / / 13.b.(1)
(2) Interest-bearing ..............RCFN 6636 22,731,000 / / / / / / / / / / / / / / / / / / / / / / / / 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in / / / / / / / / / / / / / / / / / / / / / / / /
domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs: / / / / / / / / / / / / / / / / / / / / / / / /
a. Federal funds purchased .................................. RCFD 0278 3,090,000 14.a.
b. Securities sold under agreements to repurchase ........... RCFD 0279 99,000 14.b.
15. a. Demand notes issued to the U.S. Treasury ................. RCON 2840 0 15.a.
b. Trading liabilities....................................... RCFD 3548 18,326,000 15.b.
16. Other borrowed money: / / / / / / / / / / / / / / / / / / / / / / / /
a. With original maturity of one year or less ............... RCFD 2332 17,476,000 16.a.
b. With original maturity of more than one year ............. RCFD 2333 2,771,000 16.b.
17. Mortgage indebtedness and obligations under capitalized leases . RCFD 2910 31,000 17.
18. Bank's liability on acceptances executed and outstanding ....... RCFD 2920 577,000 18.
19. Subordinated notes and debentures .............................. RCFD 3200 1,228,000 19.
20. Other liabilities (from Schedule RC-G) ......................... RCFD 2930 8,398,000 20.
21. Total liabilities (sum of items 13 through 20) ................. RCFD 2948 84,772,000 21.
/ / / / / / / / / / / / / / / / / / / / / / / /
22. Limited-life preferred stock and related surplus ............. RCFD 3282 0 22.
EQUITY CAPITAL / / / / / / / / / / / / / / / / / / / / / / / /
23. Perpetual preferred stock and related surplus ................ RCFD 3838 500,000 23.
24. Common stock.................................................. RCFD 3230 1,002,000 24.
25. Surplus (exclude all surplus related to preferred stock) ..... RCFD 3839 527,000 25.
26. a. Undivided profits and capital reserves.................... RCFD 3632 3,017,000 26.a.
b. Net unrealized holding gains (losses)
on available-for-sale securities ..................... RCFD 8434 ( 16,000) 26.b.
27. Cumulative foreign currency translation adjustments .......... RCFD 3284 ( 370,000) 27.
28. Total equity capital (sum of items 23 through 27) ............ RCFD 3210 4,660,000 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, / / / / / / / / / / / / / / / / / / / / / / / /
and 28) ...................................................... RCFD 3300 89,432,000 29.
--------------------------------------------------
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C>
1. Indicate in the box at the right the number of the statement below that Number
best describes the most comprehensive level of auditing work performed -------------------
for the bank by independent external auditors as of RCFD 6724 N/A M.1
any date during 1995 ....................................................... ----------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm
which submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance
with generally accepted auditing standards by a certified public
accounting firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external
auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
<PAGE> 8
State of New York,
Banking Department
I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER
SECTION 8005 OF THE BANKING LAW," dated March 20, 1996, providing for an
increase in authorized capital stock from $1,351,666,670 consisting of
85,166,667 shares with a par value of $10 each designated as Common Stock and
500 shares with a par value of $1,000,000 each designated as Series Preferred
Stock to $1,501,666,670 consisting of 100,166,667 shares with a par value of
$10 each designated as Common Stock and 500 shares with a par value of
$1,000,000 each designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of
New York,
this 21ST day of MARCH in the Year of our Lord
one thousand nine hundred and NINETY-SIX.
Peter M. Philbin
-----------------------------------
Deputy Superintendent of Banks
- -------
<PAGE> 9
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-------------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a
Managing Director and an Assistant Secretary of Bankers Trust Company, do
hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby
amended to increase the aggregate number of shares which the corporation shall
have authority to issue and to increase the amount of its authorized capital
stock in conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock
outstanding, which reads as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670),
divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty- Seven (85,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Five Hundred One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,501,666,670),
divided into One Hundred Million, One Hundred Sixty Six Thousand, Six
Hundred Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
<PAGE> 10
6. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
20th day of March , 1996.
James T. Byrne, Jr.
--------------------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
--------------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows
the contents thereof, and that the statements herein contained are true.
Lea Lahtinen
--------------------------------------
Lea Lahtinen
- --------
Sworn to before me this 20th day
of March, 1996.
Sandra L. West
- --------------------------
Notary Public
SANDRA L. WEST Counterpart filed in the
Notary Public State of New York Office of the Superintendent of
No. 31-4942101 Banks, State of New York,
Qualified in New York County This 21st day of March, 1996
Commission Expires September 19, 1996
