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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): March 4, 1998
BELCO OIL & GAS CORP.
(Exact name of registrant as specified in its charter)
NEVADA 1-12634 13-3869719
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
767 FIFTH AVENUE, 46TH FLOOR
NEW YORK, NEW YORK 10153
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 644-2200
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ITEM 5. OTHER EVENTS
On March 4, 1998, Belco Oil & Gas Corp. (the "Company") entered into an
Underwriting Agreement with Goldman, Sachs & Co., Smith Barney Inc. and Howard,
Weil, Labouisse, Friedrichs Incorporated with respect to the sale of up to
4,370,000 shares of the Company's 6 1/2% convertible preferred stock (the
"Preferred Stock"), a copy of which is filed herewith and incorporated herein by
reference. On March 6, 1998, the Company filed a Certificate of Designations
with respect to the Preferred Stock with the Secretary of State of the State of
Nevada, a copy of which is filed herewith and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description of Exhibit
1.1 Underwriting Agreement dated as of March 4, 1998.
4.1 Certificate of Designations of 6 1/2% Convertible Preferred Stock.
2
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: March 11, 1998
BELCO OIL & GAS CORP.
By: /s/ DOMINICK J. GOLIO
-----------------------------------
Dominick J. Golio
Vice President-Finance, Chief
Financial Officer
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
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<S> <C>
1.1 Underwriting Agreement dated as of March 4, 1998.
4.1 Certificate of Designations of 6 1/2% Convertible Preferred Stock.
</TABLE>
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EXHIBIT 1.1
Belco Oil & Gas Corp.
Underwriting Agreement
March 4, 1998
Goldman, Sachs & Co.,
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
From time to time Belco Oil & Gas Corp., a Nevada corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Convertible Preferred Stock, par value
$.01 per share (the "Shares"). The Shares specified in such Pricing Agreement
are referred to as the "Firm Shares" with respect to such Pricing Agreement and
the Shares represented by such Pricing Agreement are referred to as the shares
of "Designated Shares" with respect to such Pricing Agreement. If specified in
such Pricing Agreement, the Company may grant the Underwriters the right to
purchase at their election an additional number of Shares, specified as
provided in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively referred to as the "Designated Shares". The Designated Preferred
Stock may be convertible into shares of Common Stock, par value $.01 per share,
of the Company (the "Stock"). The securities so specified, if any, are
referred to in such Pricing Agreement as the Designated Securities with respect
to such Pricing Agreement.
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to
time to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each
Pricing Agreement shall specify the aggregate number of the Firm Shares, the
maximum number of Optional Shares, if any, the initial public offering price of
such Firm and Optional Shares or the manner of determining such price, the
terms of the Designated Shares, including the terms on which and terms of the
securities into which the Designated Shares will be convertible or
exchangeable, the purchase price to the Underwriters of such Designated Shares,
the names of the Underwriters of such Designated Shares, the names of the
Representatives of such Underwriters, the number of such Designated Shares to
be purchased by each Underwriter and the commission, if any, payable to the
Underwriters with respect thereto and shall set forth
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the date, time and manner of delivery of such Firm and Optional Shares, if any,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect
thereto) the terms of such Designated Shares. A Pricing Agreement shall be in
the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-42107) (the "Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission"); the
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters, has been declared effective
by the Commission in such form, no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Securities Act of 1933, as amended (the "Act") each in
the form heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Registration Statement, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the Registration Statement at the time such part of the
Registration Statement became effective, each as amended at the time such part
of the registration statement became effective, became or hereafter becomes
effective, are hereinafter collectively called the "Registration Statement";
the prospectus relating to the Shares including any amendments or supplements
thereto, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable form
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Registration Statement that is incorporated
by reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares in the
form in which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission, as
the case may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case
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may be, will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Shares;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) The historical and pro forma financial statements,
together with related schedules and notes, set forth in or incorporated by
reference into the Prospectus comply as to form in all material respects with
the requirements of the Act. The historical consolidated financial statements
of the Company fairly present the consolidated financial position of the
Company at the respective dates indicated and the consolidated results of
operations and cash flows of the Company and its consolidated subsidiaries for
the respective periods indicated, in each case in accordance with generally
accepted accounting principles consistently applied throughout such periods.
The pro forma financial statements of the Company set forth in or incorporated
by reference into the Prospectus have been prepared on a basis consistent with
the historical statements of the Company and its consolidated subsidiaries,
except for the pro forma adjustments specified herein, give effect to
assumptions made on a reasonable basis and present fairly the pro forma effects
of the acquisition by the Company of Coda Energy, Inc. ("Coda"). The other
financial and statistical information and data included in the Prospectus are,
in all material respects, accurately presented and prepared on a basis
consistent with such historical and pro forma financial statements and the
books and records of the Company;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(f) The Company and its subsidiaries have good and
defensible title to their interests in oil and gas properties owned by them,
good and marketable title to all other real property owned by them and good and
marketable title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as
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are not material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company and its subsidiaries;
(g) The participation agreements, joint development
agreements, joint operating agreements, farm- out agreements and other
agreements described in the Prospectus relating to the rights of the Company
and its subsidiaries with respect to the ownership, lease or operation of oil
and gas properties, the acquisition of interests in oil and gas properties or
the exploration for, development of or production of oil and gas reserves
thereon constitute valid and binding agreements of the Company and its
subsidiaries that are parties thereto and, to the best knowledge of the
Company, of the other parties thereto, enforceable in accordance with their
terms, except as enforceability may be subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(h) The information underlying the estimates of the
reserves of the Company and its subsidiaries, which was supplied by the Company
to Miller and Lents, Inc. ("Miller and Lents"), independent petroleum
engineers, for purposes of auditing the reserve reports and estimates of the
Company, including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to current and
future operations and sales of production, was true and correct in all material
respects on the dates such estimates were made and such information was
supplied and was prepared in accordance with customary industry practices;
Miller and Lents was, as of the date of each reserve report referred to in the
Prospectus, and is, as of the date hereof, independent petroleum engineers with
respect to the Company; other than normal production of the reserves and
intervening spot market product price fluctuations and the Company is not aware
of any facts or circumstances that would result in a materially adverse change
in the reserves, or the present value of future net cash flows therefrom, as
described in the Prospectus; estimates of such reserves and present values as
described in the Prospectus comply in all material respects to the applicable
requirements of Regulation S-X and Industry Guide 2 under the Act;
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Nevada, with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns,
leases or operates properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by reason
of the failure to be so qualified in any such jurisdiction; and each direct and
indirect subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation or is duly formed and validly existing as a limited
partnership, as the case may be, and each such subsidiary has the requisite
corporate or partnership power and authority to own, lease and operate its
properties and to carry on its business as it is currently being conducted, and
each is duly qualified and is in good standing as a foreign corporation or duly
registered as a foreign limited partnership, as the case may be, qualified or
authorized to do business in each jurisdiction in which it owns, leases or
operates properties or conducts any business so as to require such
qualification or registration, or is subject to no material liability or
disability by reason of the failure to be so qualified or registered in any
such jurisdiction;
(j) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable. The shares of Stock initially issuable upon conversion of the
Shares have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Shares
referred to below, will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Stock contained in
the Prospectus;
(k) The Shares have been duly and validly authorized,
and, when the Firm Shares are issued and delivered pursuant to this Agreement
and the Pricing Agreement with respect to such Designated Shares and, in the
case of any Optional Shares, pursuant to Over-allotment Options (as defined in
Section
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3 hereof) with respect to such Shares, such Designated Shares will be duly and
validly issued and fully paid and non-assessable; the Shares conform to the
description thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares; except as
described in the Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities or commitments of sale
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other equity ownership interest in, the Company; all of
the issued shares of capital stock of, or partnership or other equity ownership
interests in, each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and ( except as set
forth in the Prospectus) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims; there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities or commitments of sale entitling any person to purchase or otherwise
to acquire any shares of the capital stock of, or partnership or other equity
ownership interest in, any subsidiary of the Company;
(l) This Agreement has been duly authorized and validly
executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company;
(m) The issue and sale of the Shares and the compliance
by the Company with all of the provisions of this Agreement, any Pricing
Agreement and each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject,
nor will such action result in any violation of the provisions of the Articles
of Incorporation or By-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares and the shares
of Stock issuable upon conversion of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, except such as have been, or will have
been prior to each Time of Delivery (as defined in Section 4 hereof), obtained
under the Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(n) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject, which, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others;
(o) Neither the Company nor any of its subsidiaries is
(i) in violation of its Articles of Incorporation or By-laws or (ii) in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except in the case of clause
(ii) for any such default which would individually or in the aggregate not have
a material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(p) The Company and its subsidiaries (i) are in
compliance with all federal, state and local laws and regulations applicable to
their respective businesses, operations and properties, (ii) possess all
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permits, licenses or other approvals required of them under such laws and
regulations and (iii) are in compliance with the terms and conditions of all
such permits, except for any noncompliance with such laws or regulations,
failure to possess any such permit or noncompliance with the terms of any such
permit which would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole;
(q) The statements set forth in the Prospectus under the
caption "Description of Preferred Stock" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the Preferred
Stock and the Stock, respectively, and under the caption "Plan of Distribution"
and "Underwriting," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate in all material respects.
(r) Except as set forth in the Prospectus, no holder of
any security of the Company has or will have any right to require the
registration of such security, by virtue of any transaction contemplated by
this Agreement that has not been validly waived;
(s) The Shares have been approved for listing on the New
York Stock Exchange (the "Exchange"), subject to official notice of issuance;
(t) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(u) Arthur Andersen LLP, who have certified certain
financial statements of the Company and its subsidiaries are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(v) Ernst & Young LLP, who have certified certain
financial statements of Coda and its subsidiaries incorporated by reference
into the Prospectus, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless the Representatives and the Company otherwise agree in writing,
earlier than or later than the respective number of business days after the
date of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall
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be, in each case, the number of Optional Shares which the Company has been
advised by the Representatives have been attributed to such Underwriter;
provided that, if the Company has not been so advised, the number of Optional
Shares to be so added shall be, in each case, that proportion of Optional
Shares which the number of Firm Shares to be purchased by such Underwriter
under such Pricing Agreement bears to the aggregate number of Firm Shares
(rounded as the Representatives may determine to the nearest 100 shares). The
total number of Designated Shares to be purchased by all the Underwriters
pursuant to such Pricing Agreement shall be the aggregate number of Firm Shares
set forth in Schedule I to such Pricing Agreement plus the aggregate number of
Optional Shares which the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement, and in such
authorized denominations and registered in such names as the Representatives
may request upon at least forty-eight hours' prior notice to the Company, shall
be delivered by or on behalf of the Company to the Representatives for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer in immediately available
funds to the account specified by the Company in the funds specified in such
Pricing Agreement, (i) with respect to the Firm Shares, all in the manner and
at the place and time and date specified in such Pricing Agreement or at such
other place and time and date as the Representatives and the Company may agree
upon in writing, such time and date being herein called the "First Time of
Delivery" and (ii) with respect to the Optional Shares, if any, in the manner
and at the time and date specified by the Representatives in the written notice
given by the Representatives of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business
day following the execution and delivery of the Pricing Agreement relating to
the applicable Designated Shares or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the Representatives for
such Shares promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after any Time of
Delivery for such Shares and prior to the second anniversary of such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Shares, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use
of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares or the shares of Stock, if any, issuable upon
conversion of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any prospectus relating to the Shares or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
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(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares or the shares of
Common Stock, if any, issuable upon conversion of the Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement, and from time to
time, to furnish the Underwriters with copies of the Prospectus in New York
City, as amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Shares or the shares of
Stock, if any, issuable upon conversion of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as
the Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
(d) To make generally available to its security holders
as soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period beginning from the date of the
Pricing Agreement for such Designated Shares and continuing to and including
the date which is 90 days after the date of the Pricing Agreement, not to offer
to sell, sell, grant any option to purchase or otherwise dispose of any shares
of any capital stock of the Company (or securities convertible into, or
exchangeable for capital stock of the Company), directly or indirectly, without
the prior written consent of Goldman, Sachs & Co., except for (i) grants of
stock options by the Company to its officers, directors and employees and the
issuance of stock upon exercise of options held by such persons, (ii) shares of
capital stock issued by the Company in connection with the acquisition of
assets or capital stock of any company engaged in the oil and gas business and
(iii) shares of Common Stock of the Company issuable upon exercise of warrants
granted in connection with the acquisition of Coda by the Company;
(f) To use its best efforts to list, subject to notice of
issuance, the shares of Stock issuable upon conversion of the Shares on the
Exchange; and
(g) To reserve and keep available at all times, free of
preemptive rights, shares of Stock for the purpose of enabling the Company to
satisfy any obligation to issue shares of its Stock upon conversion of the
Shares.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares and the shares of Stock issuable
upon conversion under the Act and all other expenses in connection with the
preparation, printing and filing of the
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<PAGE> 9
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares and the shares of Stock issuable upon conversion for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Shares; (v) any filing
fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) any fees and expenses in connection with listing the Shares and the Stock;
(vii) the cost of preparing certificates for the Shares; (viii) the cost and
charges of any transfer agent or registrar or dividend disbursing agent; and
(xi) all other costs and expenses incident to the performance of its
obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares
under the Pricing Agreement relating to such Designated Shares shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Shares are, at and as of each Time of Delivery for such Designated Shares, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation
to such Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to
the Representatives their opinion or opinions (a draft of each such opinion is
attached as Annex I(a) hereto), dated each Time of Delivery for such Designated
Shares, with respect to the matters covered in paragraphs (i), (ii), (vi), (x),
(xii) and (xiii) of subsection (c) below as well as such other related matters
as the Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Counsel for the Company satisfactory to the
Representatives shall have furnished to the Representatives their written
opinion or opinions (a draft of each such opinion is attached as Annex I(b)
hereto), dated each Time of Delivery for such Designated Shares, respectively,
in form and substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
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<PAGE> 10
(ii) The Company has an authorized capitalization
as set forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company (including the
Designated Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
non-assessable; and the shares of Stock initially issuable upon
conversion of the Shares have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance
with the provisions of the Shares, will be duly and validly issued and
fully paid and non-assessable, and will conform to the description of
the Stock contained in the Prospectus; and the Designated Shares and
the Stock conform to the description thereof contained in the
Prospectus as amended or supplemented;
(iii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(iv) Each direct and indirect subsidiary of the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation or is duly formed and validly existing as a limited
partnership, as the case may be; and all of the issued shares of
capital stock of, or partnership or other equity ownership interests
in, each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except as otherwise
set forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect to matters of
fact upon certificates of officers of the Company or its subsidiaries,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and
certificates);
(v) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized, executed
and delivered by the Company;
(vii) The issue and sale of the Designated Shares
being delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the Pricing
Agreement with respect to the Designated Shares and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Articles of Incorporation or By-laws of the Company or any statute or
any
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<PAGE> 11
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of its properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Designated Shares being delivered at such Time of Delivery or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been obtained
under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares and the shares of Stock issuable
upon conversion of the Shares by the Underwriters;
(ix) Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound;
(x) The statements set forth in the Prospectus
under the caption "Description of Preferred Stock" and "Description of
Capital Stock," insofar as they purport to constitute a summary of the
terms of the Preferred Stock and the Stock, respectively, and under
the caption "Plan of Distribution" and "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair in all material respects;
(xi) The Company is not an "Investment Company" or
an entity "controlled" by an "Investment Company", as such terms are
defined in the Investment Company Act;
(xii) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and
(xiii) The Registration Statement and the Prospectus
as amended or supplemented, and any further amendments and supplements
thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which
such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (x) of this Section 7(c),
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such
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<PAGE> 12
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States. In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Texas or the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
(d) On the date of the Pricing Agreement for such
Designated Shares at a time prior to the execution of the Pricing Agreement
with respect to the Designated Shares and at each Time of Delivery for such
Designated Shares, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the Commission
containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives (the
executed copy of the letter delivered prior to the execution of this Agreement
is attached as Annex II(a) hereto and a draft of the form of letter to be
delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex
II(b) hereto);
(e) On the date of the Pricing Agreement for such
Designated Shares and at each Time of Delivery for such Designated Shares, the
independent accountants of the Company who have certified certain financial
statements of Coda and its subsidiaries included or incorporated by reference
in the Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the date of
the most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement, if the
date of such report is later than such effective date, and a letter dated such
Time of Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) On the date of the Pricing Agreement for such
Designated Shares and at each Time of Delivery for such Designated Shares,
Miller and Lents shall have furnished to the Representatives a letter (a draft
of such letter is attached as Annex IV hereto), dated such Time of Delivery, in
form and substance satisfactory to the Representatives, confirming that they
are independent petroleum engineers with respect to the Company and stating
certain conclusions and findings of such firm with respect to the information
and other matters covered by its reserve report previously delivered to you;
(g) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Shares any loss or
interference with its
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<PAGE> 13
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Shares, and (ii) since the respective dates as of which information is given in
the Prospectus as amended prior to the date of the Pricing Agreement relating
to the Designated Shares there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, the effect of which, in
any such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the Prospectus
as amended relating to the Designated Shares;
(h) On or after the date of the Pricing Agreement
relating to the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement
relating to the Designated Shares there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the Exchange; (ii) a suspension or material limitation in trading
in the Company's securities on the Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Firm Shares or Optional
Shares or both on the terms and in the manner contemplated in the Prospectus as
first amended or supplemented relating to the Designated Shares;
(j) The Shares at each Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange; and
(k) The Company has obtained and delivered to the
Underwriters executed copies of an agreement from each of Robert A. Belfer,
Renee E. Belfer, Laurence D. Belfer, Jack Saltz, Saltz Investment Group, Robert
A. Belfer 1983 Grantor Trust, Shiv K. Sharma, Dominick J. Golio, Graham
Allison, Daniel C. Arnold, Alan D. Berlin and Georgiana Sheldon-Sharp,
substantially to the effect set forth in Subsection 5(e) hereof in form and
substance satisfactory to you; and
(l) The Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the Designated
Shares certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (h) of
this Section and as to such other matters as the Representatives may reasonably
request.
(m) The Company shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement;
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<PAGE> 14
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus relating to the Shares, or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all
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<PAGE> 15
liability arising out of such action or claim and (ii) does not include any
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters of the Designated Shares on the other from the offering of the
Designated Shares to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters of the Designated Shares on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Shares in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Shares and not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Firm Shares or Optional Shares which it has agreed to purchase
under the Pricing Agreement relating to such Shares, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the Representatives do not arrange for
the purchase of such Firm Shares or Optional Shares, as the case may
-15-
<PAGE> 16
be, then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Shares on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Shares, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Shares, the Representatives or the Company shall have the right to postpone a
Time of Delivery for such Shares for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of the
Firm Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Shares or
Optional Shares, as the case may be, which such Underwriter agreed to purchase
under the Pricing Agreement relating to such Designated Shares and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Shares or Optional Shares, as the case may
be, which such Underwriter agreed to purchase under such Pricing Agreement) of
the Firm Shares or Optional Shares, as the case may be, of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Company
as provided in subsection (a) above, the aggregate number of Firm Shares or
Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Firm Shares or Optional Shares, as
the case may be, to be purchased at the respective Time of Delivery, as
referred to in subsection (b) above, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such Firm
Shares or the Over-allotment Option relating to such Optional Shares, as the
case may be, shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under
any liability to any Underwriter with respect to the Firm Shares or Optional
Shares with respect to which such Pricing Agreement shall have been terminated
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
Designated Shares are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through the
-16-
<PAGE> 17
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
-17-
<PAGE> 18
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof.
Very truly yours,
BELCO OIL & GAS CORP.
By: /s/ ROBERT A. BELFER
----------------------------------------
Name: Robert A. Belfer
Title: Chairman of the Board and Chief
Executive Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
By: /s/ GOLDMAN, SACHS & CO.
---------------------------------
(Goldman, Sachs & Co.)
-18-
<PAGE> 19
ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
March 4, 1998
Ladies and Gentlemen:
Belco Oil & Gas Corp., a Nevada corporation (the "Company") proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated March 4, 1998 (the "Underwriting Agreement"), between the
Company on the one hand and Goldman, Sachs & Co., Smith Barney Inc. and
Howard, Weil, Labouisse, Friedrichs Incorporated, on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters")
the Shares specified in Schedule II hereto (the "Designated Shares") consisting
of Firm Shares and any Optional Shares the Underwriters may elect to purchase.
The Designated Preferred Stock are convertible into shares of Common Stock, par
value $0.01 per share, of the Company (the "Stock"), as specified in Schedule
II to this Agreement. The Securities so specified, if any, are referred to in
this Agreement as the Designated Securities with respect to this Agreement.
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that
each representation and warranty which refers to the Prospectus in Section 2 of
the Underwriting Agreement shall be deemed to be a representation or warranty
as of the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Shares which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the
<PAGE> 20
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares, as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at the purchase price
to the Underwriters set forth in Schedule II hereto that portion of the number
of Optional Shares as to which such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms
referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives to
the Company given within a period of 30 calendar days after the date of this
Pricing Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Company otherwise agree in
writing, no earlier than two or later than ten business days after the date of
such notice.
-2-
<PAGE> 21
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
BELCO OIL & GAS CORP.
By: /s/ ROBERT A. BELFER
-----------------------------------
Name: Robert A. Belfer
Title: Chairman of the Board and
Chief Executive Officer
ACCEPTED AS OF THE DATE HEREOF:
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
By: /s/ GOLDMAN, SACHS & CO.
-----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
-3-
<PAGE> 22
SCHEDULE I
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
TOTAL NUMBER OF OPTIONAL SHARES
FIRM SHARES TO WHICH MAY BE
UNDERWRITER BE PURCHASED PURCHASED
- --------------------------------------------- --------------- ---------------
<S> <C> <C>
Goldman, Sachs & Co. ........................ 1,520,000 228,000
Smith Barney Inc. ........................... 1,520,000 228,000
Howard, Weil, Labouisse, Friedrichs ......... 760,000 114,000
---------- ----------
Incorporated Total .................. 3,800,000 570,000
========== ==========
</TABLE>
<PAGE> 23
SCHEDULE II
TITLE OF DESIGNATED SHARES: 6 1/2% Convertible Preferred Stock, par value $.01
per share
CONVERTIBLE INTO SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, AT AN
INITIAL CONVERSION PRICE OF $22.14 (THE EQUIVALENT OF 1.1292 SHARES OF COMMON
STOCK FOR EACH SHARE OF PREFERRED STOCK)
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares: 3,800,000
Maximum Number of Optional Shares: 570,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Share
PURCHASE PRICE BY UNDERWRITERS:
$24.0625 per Share, provided, however, that the purchase price per
Share with respect to 600,000 of the Firm Shares to be sold by the
Underwriters to Mr. Belfer and his family will be $24.625 rather than
$24.0625.
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian for
trading in the Same Day Funds Settlement System of DTC, and, to be made
available for checking by the Representatives at least twenty-four hours prior
to the Time of Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds by wire transfer
TIME OF DELIVERY:
9:00 a.m. (New York City time), March 10, 1998.
CLOSING LOCATION:
Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017-3903
<PAGE> 24
NAMES AND ADDRESSES OF REPRESENTATIVES:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Howard, Weil, Labouisse, Friedrichs Incorporated
1100 Poydras Street
New Orleans, LA 70163
OTHER TERMS: The Designated Shares will have the other terms as specified in
the Prospectus Supplement dated March 4, 1998 to the Prospectus dated December
24, 1997 relating to the Registration Statement (No. 333-42107) of Belco Oil &
Gas Corp.
<PAGE> 25
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made
a review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies of
which have been separately furnished to the Representatives; and on the basis
of specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of items 301, 302, 402 and 503(d), respectively, of
Regulation S- K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the
<PAGE> 26
Company and its subsidiaries, inspection of the minute books of the Company and
its subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of officials
of the Company and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which such
data and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance shares
and upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
-2-
<PAGE> 27
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified
by the Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by reference in
the Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein)
as defined in the Underwriting Agreement as of the date of the letter delivered
on the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
-3-
<PAGE> 28
ANNEX III
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
Coda (the "Company") and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder;
<PAGE> 29
ANNEX IV
[MILLER AND LENTS LETTERHEAD]
March 4, 1998
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
As representatives of the several
Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10014
Ladies and Gentlemen:
This letter is written at the request of Belco Oil & Gas Corp. (the
"Company"). Reference is made to the Registration Statement on Form S-3 (No.
333-42107) filed by the Company with the Securities and Exchange Commission, as
amended to the date hereof (the "Registration Statement").
In this letter, reference will be made to our letter to the Company dated
March 4, 1998, in respect of the Company's reserves as of December 31, 1997
(the "Reserve Letter"), a copy of which has been provided to you.
In connection with the Registration Statement, we hereby inform you of the
following:
1. We are independent petroleum engineers with respect to the
Company. In connection with the Registration Statement and the Reserve Letter,
we are not employed on a contingent basis. At the time of preparation of the
Reserve Letter, we did not have, and at the date hereof we do not have, any
financial interest in the Company. At such time, and at the date hereof, we
are not, and are not connected with the Company as, a promoter, underwriter,
director, officer or employee.
2. The letter to the Company attached hereto is a true, correct, and
complete copy of the Reserve Letter as provided to the Company on March 4,
1998. We are not aware of any additional information that we believe is
necessary to be disclosed in the Reserve Letter in order to prevent the
information set forth therein from being misleading as of the date of the
reserve information therein (December 31, 1997). Further information regarding
the classification and definitions of the reserves shown in the Reserve Letter
is included in such letter.
<PAGE> 30
3. As of the date hereof, nothing has come to our attention which
would cause us to revise downward by any material amount any statement made or
opinion expressed by us in the Reserve Letter, with respect to our estimates of
the oil and gas reserves and future net revenues attributable to the interest
of the Company in such properties.
Very truly yours,
MILLER AND LENTS, LTD.
By:
---------------------------
Name:
Title:
-2-
<PAGE> 31
PRICING AGREEMENT
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
March 4, 1998
Ladies and Gentlemen:
Belco Oil & Gas Corp., a Nevada corporation (the "Company") proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated March 4, 1998 (the "Underwriting Agreement"), between the
Company on the one hand and Goldman, Sachs & Co., Smith Barney Inc. and Howard,
Weil, Labouisse, Friedrichs Incorporated, on the other hand, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares") consisting of Firm
Shares and any Optional Shares the Underwriters may elect to purchase. The
Designated Preferred Stock are convertible into shares of Common Stock, par
value $0.01 per share, of the Company (the "Stock"), as specified in Schedule II
to this Agreement. The Securities so specified, if any, are referred to in this
Agreement as the Designated Securities with respect to this Agreement. Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees
<PAGE> 32
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company at the purchase
price to the Underwriters set forth in Schedule II hereto that portion of the
number of Optional Shares as to which such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 30 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.
-2-
<PAGE> 33
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
BELCO OIL & GAS CORP.
By:
----------------------------------
Name: Robert A. Belfer
Title: Chairman of the Board and
Chief Executive Officer
ACCEPTED AS OF THE DATE HEREOF:
Goldman, Sachs & Co.
Smith Barney Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
By:
-------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
-3-
<PAGE> 34
SCHEDULE I
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
TOTAL NUMBER OF OPTIONAL SHARES
FIRM SHARES TO WHICH MAY BE
UNDERWRITER BE PURCHASED PURCHASED
- --------------------------------------------- --------------- ---------------
<S> <C> <C>
Goldman, Sachs & Co. ........................ 1,520,000 228,000
Smith Barney Inc. ........................... 1,520,000 228,000
Howard, Weil, Labouisse, Friedrichs ......... 760,000 114,000
---------- ----------
Incorporated Total .................. 3,800,000 570,000
========== ==========
</TABLE>
<PAGE> 35
SCHEDULE II
TITLE OF DESIGNATED SHARES: 6 1/2% Convertible Preferred Stock, par value $.01
per share
CONVERTIBLE INTO SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, AT AN INITIAL
CONVERSION PRICE OF $22.14 (THE EQUIVALENT OF 1.1292 SHARES OF COMMON STOCK FOR
EACH SHARE OF PREFERRED STOCK)
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares: 3,800,000
Maximum Number of Optional Shares: 570,000
INITIAL OFFERING PRICE TO PUBLIC:
$25.00 per Share
PURCHASE PRICE BY UNDERWRITERS:
$24.0625 per Share, provided, however, that the purchase price per Share
with respect to 600,000 of the Firm Shares to be sold by the Underwriters
to Mr. Belfer and his family will be $24.625 rather than $24.0625.
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and, to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds by wire transfer
TIME OF DELIVERY:
9:00 a.m. (New York City time), March 10, 1998.
CLOSING LOCATION:
Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017-3903
<PAGE> 36
NAMES AND ADDRESSES OF REPRESENTATIVES:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Howard, Weil, Labouisse, Friedrichs Incorporated
1100 Poydras Street
New Orleans, LA 70163
OTHER TERMS: The Designated Shares will have the other terms as specified in the
Prospectus Supplement dated March 4, 1998 to the Prospectus dated December 24,
1997 relating to the Registration Statement (No.
333-42107) of Belco Oil & Gas Corp.
<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS
OF
6 1/2% CONVERTIBLE PREFERRED STOCK
($.01 Par Value)
OF
BELCO OIL & GAS CORP.
---------------
Pursuant to Section 78.195 of the Nevada Private Corporations Law
---------------
BELCO OIL & GAS CORP., a corporation organized and existing under the
laws of the State of Nevada (the "Corporation"), HEREBY CERTIFIES that the
following resolutions were duly adopted by the Board of Directors of the
Corporation and by the Pricing Committee of the Board of Directors,
respectively, pursuant to authority conferred upon the Board of Directors by
the provisions of the Articles of Incorporation of the Corporation (the
"Articles of Incorporation"), which authorizes the issuance of up to 10,000,000
shares of preferred stock, $.01 par value, and pursuant to authority conferred
upon the Pricing Committee of the Board of Directors by Section 78.125 of the
Nevada Private Corporations Law, and by the resolutions of the Board of
Directors set forth herein, by unanimous written consent of the Board of
Directors on February 23, 1998 and at a meeting of the Pricing Committee
thereof duly held on March 4, 1998.
1. The Board of Directors on February 23, 1998 adopted the
following resolutions authorizing the issuance of a series of preferred stock,
designating a Pricing Committee of the Board of Directors and authorizing such
committee to act on behalf of the Board of Directors in connection with the
designation and issuance of such series of preferred stock:
RESOLVED, that the Board of Directors hereby deems it advisable and in
the best interest of the Corporation to issue and sell up to 3,000,000 shares
of preferred stock, par value $.01 per share (the "Preferred Stock"), plus up
to 450,000 additional shares of Preferred Stock which may be sold by the
Corporation pursuant to an over-allotment option, convertible into shares of
common stock, par value $.01 per share (the "Common Stock"), at a price to be
agreed upon and with such designations as the Pricing Committee (as defined
hereinafter) may determine.
RESOLVED, that the Board hereby appoints Graham Allison, Daniel C.
Arnold, Alan D. Berlin and Georgiana Sheldon-Sharp as a Pricing Committee, and
that such persons be, and they hereby are, in such capacity, together with any
persons who may become members of the Pricing Committee following the date
hereof by way of addition or substitution, authorized and empowered to exercise
all the power and authority of this Board of Directors to authorize and
<PAGE> 2
approve or to ratify and confirm the designations of the Preferred Stock, the
rates at which dividends will be paid on the Preferred Stock, the conversion
price per share of Common Stock of the Preferred Stock, the various prices at
which the Preferred Stock may be redeemed by the Corporation, and to take any
and all action and to do or cause to be done any or all things which may appear
to the Pricing Committee to be necessary or advisable in order to offer, issue
and sell the Preferred Stock.
2. The Board of Directors on March 4, 1998 adopted the following
resolution authorizing an increase in the number of shares of Preferred Stock
to be issued by the Corporation:
RESOLVED, that the Board of Directors hereby deems it
advisable and in the best interest of the Corporation to increase the
number of shares of Preferred Stock to be issued and sold by the
Corporation to 3,800,000 shares of Preferred Stock, plus up to 570,000
additional shares of Preferred Stock which may be sold by the
Corporation pursuant to an over-allotment option.
3. The Pricing Committee of the Board of Directors on March 4,
1998, pursuant to the authority conferred upon the Pricing Committee of the
Board of Directors by Section 78.125 of the Nevada Private Corporations Law and
by the resolutions of the Board of Directors set forth above, adopted the
following resolution:
RESOLVED, that pursuant to authority expressly granted to and vested
in this Pricing Committee by the Board of Directors of the Corporation and
pursuant to the provisions of the Articles of Incorporation, the issuance of a
series of preferred stock, $.01 par value per share, which shall consist of
4,370,000 of the 10,000,000 shares of preferred stock which the Corporation now
has authority to issue, be, and the same hereby is, authorized, and the powers,
designations, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof are hereby fixed as follows:
1. Number of Shares and Designation. 4,370,000 shares of the
Preferred Stock, $.01 par value per share, of the Corporation are hereby
constituted as a series of the preferred stock designated as "6 1/2%
Convertible Preferred Stock".
2. Definitions. For purposes of the Preferred Stock, the
following terms shall have the meanings indicated:
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Preferred
Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the City of New York
are authorized or obligated by law or executive order to close.
-2-
<PAGE> 3
"Change of Control" shall have the meaning set forth in
paragraph (d) of Section 8 hereof.
"Closing Price" with respect to a particular security on any
day shall mean on such day the last reported sales price, regular way,
for such security or, in case no sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, for
such security in either case as reported on the New York Stock
Exchange, on the principal national securities exchange on which such
security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the
National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ National Market
System") or, if such security is not quoted on the NASDAQ National
Market System, the average of the closing bid and asked prices for
such security in the over-the-counter market as reported by NASDAQ or,
if bid and asked prices for such security on each such date shall not
have been reported by NASDAQ, the average of the bid and asked prices
for such security for such day as furnished by any National
Association of Securities Dealers, Inc. ("NASD") member firm regularly
making a market in such security selected for such purpose by the
board of directors or similar governing body of the issuer of such
security or, if no such quotations are available, the fair market
value of such security furnished by any NASD member firm selected from
time to time by the board of directors or similar governing body of
the issuer of such security for that purpose.
"Common Stock" shall mean the Common Stock of the Corporation,
par value $.01 per share.
"Common Stock Transaction" shall have the meaning set forth in
Section 8 hereof.
"Conversion Price" shall mean the conversion price per share
of Common Stock into which the Preferred Stock is convertible, as such
Conversion Price may be adjusted pursuant to Section 7 hereof. The
initial Conversion Price will be $22.14 (equivalent to the rate of
1.1292 shares of Common Stock for each share of Preferred Stock).
"Current Market Price" per share of Common Stock on any date
shall mean the average of the daily Closing Prices for the 30
consecutive Trading Dates commencing 45 Trading Dates before the date
of determination.
"Defaulted Preferred Stock" shall have the meaning set forth
in paragraph (a) of Section 10 hereof.
"dividend payment date" shall have the meaning set forth in
paragraph (a) of Section 3 hereof.
"dividend payment record date" shall have the meaning set
forth in paragraph (a) of Section 3 hereof.
-3-
<PAGE> 4
"Dividend Periods" shall mean quarterly dividend periods
commencing on the sixteenth day of March, June, September and December
of each year and ending on and including the day preceding the first
day of the next succeeding Dividend Period (other than the initial
Dividend Period which shall commence on the Issue Date and end on and
include June 15, 1998).
"Issue Date" shall mean the first date on which shares of
Preferred Stock are issued.
"Market Value" shall have the meaning set forth in Section 8
hereof.
"Permitted Holders" shall have the meaning set forth in
Section 8 hereof.
"Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Preferred Stock" shall mean the 6 1/2% Convertible Preferred
Stock, par value $.01 per share, of the Corporation.
"Redemption Price" shall have the meaning set forth in
paragraph (a) of Section 5 hereof.
"Securities" shall have the meaning set forth in paragraph
(d)(iii) of Section 7 hereof.
"Special Conversion Notice" shall have the meaning set forth
in Section 8 hereof.
"Special Conversion Price" shall have the meaning set forth in
Section 8 hereof.
"Trading Date" with respect to any security means (i) if such
security is listed or admitted for trading on the New York Stock
Exchange or another national securities exchange, a day on which the
New York Stock Exchange or such other national securities exchange is
open for trading, (ii) if such security is quoted on the NASDAQ
National Market System, or any similar system of automated
dissemination of quotations of securities prices, a day on which
trades may be made on such system, (iii) if not quoted as described in
clause (ii), a day on which quotations are reported by the National
Quotation Bureau Incorporated or (iv) otherwise, any Business Day.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section 7 hereof.
"Transfer Agent" means The Bank of New York, New York, New
York or such other agent or agents of the Corporation as may be
designated by the Board of Directors as the transfer agent or
conversion agent for the Preferred Stock.
-4-
<PAGE> 5
3. Dividends. (a) The holders of shares of the Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available therefor, cumulative cash dividends at
an annual rate of $1.625 per share of Preferred Stock. Such dividends shall be
cumulative from the Issue Date, whether or not in any Dividend Period or
Periods there shall be funds of the Corporation legally available for the
payment of such dividends and whether or not such dividends are declared, and
shall be payable quarterly, when, as and if declared by the Board of Directors,
on March 15, June 15, September 15 and December 15 in each year (each a
"dividend payment date"), commencing on June 15, 1998. If any dividend payment
date shall be on a day other than a Business Day, then the dividend payment
date shall be on the next succeeding Business Day. Each such dividend shall be
payable in arrears to the holders of record of shares of the Preferred Stock,
as they appear on the stock records of the Corporation at the close of business
on those dates (each such date, a "dividend payment record date"), not less
than 10 days nor more than 60 days preceding the dividend payment dates
thereof, as shall be fixed by the Board of Directors. Dividends on the
Preferred Stock shall accrue (whether or not declared) on a daily basis from
the Issue Date and accrued dividends for each Dividend Period shall accumulate
to the extent not paid on the dividend payment date first following the
Dividend Period for which they accrue. As used herein, the term "accrued" with
respect to dividends includes both accrued and accumulated dividends. Accrued
and unpaid dividends for any past Dividend Periods may be declared and paid at
any time, without reference to any regular dividend payment date, to holders of
record on such date, not exceeding 45 days preceding the payment date thereof,
as may be fixed by the Board of Directors.
(b) The amount of dividends payable for each full Dividend Period
for the Preferred Stock shall be computed by dividing the annual dividend
amount by four (rounded down to the nearest cent). The amount of dividends
payable for the initial Dividend Period on the Preferred Stock and any other
period shorter or longer than a full Dividend Period on the Preferred Stock
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. Holders of shares of Preferred Stock called for redemption on a
redemption date falling between the close of business on a dividend payment
record date and the opening of business on the corresponding dividend payment
date shall, in lieu of receiving such dividend on the dividend payment date
fixed therefor, receive such dividend payment together with all other accrued
and unpaid dividends on the date fixed for redemption (unless such holder
converts such shares in accordance herewith). Holders of shares of Preferred
Stock shall not be entitled to any dividends, whether payable in cash, property
or securities, in excess of cumulative dividends, as herein provided, on the
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Preferred Stock
which are in arrears.
(c) So long as any shares of the Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on any class or series of stock of
the Corporation ranking, as to dividends, on a parity with the Preferred Stock,
for any period unless full cumulative dividends on all outstanding shares of
Preferred Stock have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payment for all Dividend Periods terminating on or prior to the date of
payment, or setting apart for payment, of such full cumulative dividends on
such parity stock. When dividends are not paid in full or a sum sufficient for
such payment
-5-
<PAGE> 6
is not set apart, as aforesaid, upon the shares of the Preferred Stock and any
other class or series of stock ranking on a parity as to dividends with the
Preferred Stock, all dividends declared upon such other stock shall be declared
and paid pro rata so that in all cases the amounts of dividends per share
declared and paid on the Preferred Stock and such other stock shall bear to
each other the same ratio that accrued and unpaid dividends per share on the
shares of the Preferred Stock and on such other stock bear to each other.
(d) So long as any shares of the Preferred Stock are outstanding,
no other stock of the Corporation ranking on a parity with the Preferred Stock
as to dividends or upon liquidation, dissolution or winding up shall be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund or otherwise for the purchase
or redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to the
Preferred Stock as to dividends and upon liquidation, dissolution or winding
up) unless (i) the full cumulative dividends, if any, accrued on all
outstanding shares of the Preferred Stock shall have been paid or set apart for
payment for all past Dividend Periods and (ii) sufficient funds shall have been
set apart for the payment of the dividend for the current Dividend Period with
respect to the Preferred Stock.
(e) So long as any shares of the Preferred Stock are outstanding,
no dividends (other than dividends or distributions paid in shares of Common
Stock or other stock ranking junior to the Preferred Stock as to dividends and
upon liquidation, dissolution or winding up) shall be declared or paid or set
apart for payment and no other distribution shall be declared or made or set
apart for payment, in each case upon the Common Stock or any other stock of the
Corporation ranking junior to the Preferred Stock as to dividends or upon
liquidation, dissolution or winding up, nor shall any Common Stock nor any
other such stock of the Corporation ranking junior to the Preferred Stock as to
dividends or upon liquidation, dissolution or winding up be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund or otherwise for the purchase or redemption of any
shares of any such stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to the Preferred Stock as
to dividends and upon liquidation, dissolution or winding up) unless, in each
case (i) the full cumulative dividends, if any, accrued on all outstanding
shares of the Preferred Stock and any other stock of the Corporation ranking on
a parity with the Preferred Stock as to dividends shall have been paid or set
apart for payment for all past Dividend Periods and all past dividend periods
with respect to such other stock and (ii) sufficient funds shall have been set
apart for the payment of the dividend for the current Dividend Period with
respect to the Preferred Stock and for the current dividend period with respect
to any other stock of the Corporation ranking on a parity with the Preferred
Stock as to dividends.
(f) The Company shall take all actions required or permitted under
Nevada law to permit the payment of dividends on the Preferred Stock in the
manner and in the amounts specified herein.
-6-
<PAGE> 7
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of Common Stock or any other
series or class or classes of stock of the Corporation ranking junior to the
Preferred Stock upon liquidation, dissolution or winding up, the holders of the
shares of Preferred Stock shall be entitled to receive $25.00 per share plus an
amount per share equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to such holders;
but such holders shall not be entitled to any further payment. No payment on
account of any liquidation, dissolution or winding up of the Corporation shall
be made to the holders of any class or series of stock ranking on a parity with
the Preferred Stock in respect of the distribution of assets upon dissolution,
liquidation or winding up unless there shall likewise be paid at the same time
to the holders of the Preferred Stock like proportionate amounts determined
ratably in proportion to the full amounts to which the holders of all
outstanding shares of Preferred Stock and the holders of all outstanding shares
of such parity stock are respectively entitled with respect to such
distribution. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of the shares of Preferred Stock shall be insufficient to pay
in full the preferential amount aforesaid and liquidating payments on any other
shares of stock ranking, as to liquidation, dissolution or winding up, on a
parity with the Preferred Stock, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of Preferred Stock and any
such other stock ratably in accordance with the respective amounts which would
be payable on such shares of Preferred Stock and any such other stock if all
amounts payable thereon were paid in full. For the purposes of this Section 4,
neither a consolidation or merger of the Corporation with one or more
corporations or other entities nor a sale, lease, exchange or transfer of all
or any part of the Corporation's assets for cash, securities or other property
shall be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary.
(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or prior to the Preferred
Stock upon liquidation, dissolution or winding up, upon any liquidation,
dissolution or winding up of the Corporation, after payment shall have been
made in full to the holders of Preferred Stock, as provided in this Section 4,
any other series or class or classes of stock ranking junior to the Preferred
Stock upon liquidation, dissolution or winding up shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the holders
of Preferred Stock shall not be entitled to share therein.
5. Redemption at the Option of the Corporation.
(a) Preferred Stock may not be redeemed by the Corporation prior
to March 15, 2001. On or after such date the Corporation, at its option, may
redeem the shares of Preferred Stock, in whole or in part, out of funds legally
available therefor, at any time or from time to time, subject to the notice
provisions and provisions for partial redemption described below, during
the twelve-month periods beginning on March 15 in each of the following years at
the following
-7-
<PAGE> 8
redemption prices per share plus an amount equal to accrued and unpaid
dividends, if any, to (and including) the date fixed for redemption, whether or
not earned or declared (the "Redemption Price").
<TABLE>
<CAPTION>
YEAR PRICE PER SHARE
---- ---------------
<S> <C>
2001 . . . . . . . . . . . . . . $26.1375
2002 . . . . . . . . . . . . . . $25.9750
2003 . . . . . . . . . . . . . . $25.8125
2004 . . . . . . . . . . . . . . $25.6500
2005 . . . . . . . . . . . . . . $25.4875
2006 . . . . . . . . . . . . . . $25.3250
2007 . . . . . . . . . . . . . . $25.1625
2008 and thereafter . . . . . . . $25.0000
</TABLE>
(b) In the event the Corporation shall redeem shares of Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the redemption
date, to each holder of record of the shares to be redeemed, at such holder's
address as the same appears on the stock records of the Corporation. Each such
notice shall state: (i) the redemption date; (ii) the number of shares of
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iii) the Redemption Price; (iv) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price; (v)
the then current Conversion Price; and (vi) that dividends on the shares to be
redeemed shall cease to accrue on such redemption date. If, on the date fixed
for redemption, funds necessary for the redemption shall be available therefor
and shall have been irrevocably deposited or set aside, then, notwithstanding
that the certificates evidencing any shares of Preferred Stock so called for
redemption shall not have been surrendered, the dividends with respect to the
shares so called shall cease to accrue after the date fixed for redemption,
such shares shall no longer be deemed outstanding, all rights of the holders of
such shares as stockholders of the Company shall cease, and all rights
whatsoever with respect to the shares so called for redemption (except the
right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate.
Upon surrender in accordance with said notice of the certificates for
any such shares so redeemed (properly endorsed or assigned for transfer, if the
Board of Directors shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the applicable Redemption Price
aforesaid. If fewer than all the outstanding shares of Preferred Stock are to
be redeemed, shares to be redeemed shall be selected by the Corporation from
outstanding shares of Preferred Stock not previously called for redemption pro
rata (as near as may be). If fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
In the event that the Corporation has failed to pay accrued and unpaid
dividends on the Preferred Stock, it may not redeem less than all of the then
outstanding shares of the Preferred
-8-
<PAGE> 9
Stock until all such accrued and unpaid dividends and the then current
quarterly dividends have been paid in full.
Notwithstanding the foregoing, if notice of redemption has been given
pursuant to this Section 5 and any holder of shares of Preferred Stock shall,
prior to the close of business on the redemption date, give written notice to
the Corporation pursuant to Section 7(b) hereof of the conversion of any or all
of the shares to be redeemed held by such holder (accompanied by a certificate
or certificates for such shares, duly endorsed or assigned to the Corporation),
then (i) the Corporation shall not have the right to redeem such shares, (ii)
the conversion of such shares to be redeemed shall become effective as provided
in Section 7 and (iii) any funds which shall have been deposited for the
payment of the Redemption Price for such shares shall be returned to the
Corporation immediately after such conversion (subject to declared dividends
payable to holders of shares of Preferred Stock on the dividend payment record
date for such dividends being so payable, to the extent set forth in Section 7
hereof, regardless of whether such shares are converted subsequent to such
dividend payment record date and prior to the related dividend payment date).
6. Shares to be Retired. All shares of Preferred Stock
purchased, redeemed, exchanged or converted by the Corporation shall be retired
and cancelled and shall be restored to the status of authorized but unissued
shares of preferred stock, without designation as to series, and may thereafter
be reissued. Any shares of Preferred Stock which may have been issued and sold
by the Corporation pursuant to an over-allotment option and which are not
issued by the Corporation because the over-allotment option is not exercised or
is not exercised in full shall be restored to the status of authorized but
unissued shares of preferred stock, without designation as to series, and may
thereafter be reissued.
7. Conversion. Holders of shares of Preferred Stock shall have
the right to convert all or a portion of such shares into shares of Common
Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Preferred Stock shall have the right, at such
holder's option, at any time to convert all or any of such shares into the
number of fully paid and nonassessable shares of Common Stock obtained by
dividing the aggregate liquidation preference of the shares to be converted by
the Conversion Price and by surrender of such shares, such surrender to be made
in the manner provided in paragraph (b) of this Section 7; provided, however,
that the right to convert shares called for redemption pursuant to Section 5
hereof shall terminate at the close of business on the date fixed for such
redemption. No share of Preferred Stock may be converted in part into Common
Stock.
(b) In order to exercise the conversion right, the holder of each
share of Preferred Stock to be converted shall surrender the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent in the Borough of Manhattan, City of
New York, accompanied by written notice to the Corporation that the holder
thereof elects to convert such share of Preferred Stock. Unless the shares
issuable on conversion are to be issued in the same name as the name in which
such share of Preferred Stock is registered,
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<PAGE> 10
each share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or such holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid or are not required to be paid).
Holders of shares of Preferred Stock at the close of business on a
dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding dividend payment date (except that holders
of shares called for redemption on a redemption date falling between the close
of business on such dividend payment record date and the opening of business on
the corresponding dividend payment date shall, in lieu of receiving such
dividend on the dividend payment date fixed therefor, receive such dividend
payment together with all other accrued and unpaid dividends on the date fixed
for redemption, unless such holders convert such shares called for redemption
pursuant to the Certificate of Designations relating to the Preferred Stock)
notwithstanding the conversion thereof following such dividend payment record
date and prior to such dividend payment date. However, shares of Preferred
Stock surrendered for conversion during the period between the close of
business on any dividend payment record date and the opening of business on the
corresponding dividend payment date (except shares of Preferred Stock called
for redemption on a redemption date during such period) must be accompanied by
payment of an amount equal to the dividend payment with respect to such shares
of Preferred Stock presented for conversion of such dividend payment date. A
holder of shares of Preferred Stock on a dividend payment record date who (or
whose transferee) surrenders any such shares for conversion into shares of
Common Stock on the corresponding dividend payment date will receive the
dividend payable by the Corporation on such shares of Preferred Stock on such
date and the converting holder need not include payment in the amount of such
dividend upon surrender of shares of Preferred Stock for conversion on the
dividend payment date. Except as provided in this paragraph, the Corporation
shall make no payment or allowance for unpaid dividends, whether or not in
arrears, on converted shares of Preferred Stock or for dividends on the shares
of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on such holder's written order, a
certificate or certificates for the number of shares of Common Stock issuable
upon the conversion of such shares in accordance with the provisions of this
Section 7, and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in paragraph (c) of
this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for shares
of Preferred Stock shall have been surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby at such time on such date and such conversion
shall be at the Conversion Price in effect at such time on such date, unless
the stock transfer books of the Corporation shall be closed on that date, in
which event such person or persons shall be deemed
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<PAGE> 11
to have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such shares shall have been surrendered and such notice received by the
Corporation. All shares of Common Stock delivered upon conversion of the
Preferred Stock will upon delivery be duly and validly issued and fully paid
and nonassessable.
(c) In connection with the conversion of any shares of Preferred
Stock, no fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of the Preferred Stock. Instead of any
fractional interest in a share of Common Stock which would otherwise be
deliverable upon the conversion of a share of Preferred Stock, the Corporation
shall pay to the holder of such share an amount in cash (computed to the
nearest cent) equal to the Closing Price of Common Stock on the Trading Date
immediately preceding the date of conversion multiplied by the fraction of a
share of Common Stock represented by such fractional interest. If more than
one share of Preferred Stock shall be surrendered for conversion at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its Common Stock that is
paid or made (1) in shares of its Common Stock or (2) in rights to
purchase stock or other securities if such rights are not separable
from the Common Stock except upon the occurrence of a contingency, (B)
subdivide or split its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller
number of shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted, or in the case of clause
(A)(2) other provision shall be made, so that the holder of any share
of Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock of the
Corporation and rights to purchase stock or other securities which
such holder would have owned or have been entitled to receive after
the occurrence of any of the events described above had such share
been surrendered for conversion immediately prior to the occurrence of
such event or the record date therefor, whichever is earlier. In the
event of the redemption of any rights referred to in clause (A), such
holder shall have the right to receive, in lieu of any such rights,
any cash, property or securities paid in respect of such redemption;
provided, however, that if the value of such cash, property or
securities is less than $.10 per share of Common Stock, such holder
shall not be entitled to such cash, property or securities. An
adjustment made pursuant to this subparagraph (i) shall become
effective immediately after the close of business on the record date
for determination of stockholders entitled to receive such dividend or
distribution in the case of a dividend or distribution (except as
provided in paragraph (h) below) and shall become effective
immediately after the close of business on the effective date in the
case of a subdivision, split, combination or reclassification. Any
shares of Common Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the close of
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<PAGE> 12
business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock under
clauses (ii) and (iii) below.
(ii) In case the Corporation shall issue after the Issue
Date rights or warrants to all holders of Common Stock entitling them
(for a period expiring within 45 days after the issuance date) to
subscribe for or purchase Common Stock at a price per share less than
the Current Market Price per share of Common Stock at the record date
for the determination of stockholders entitled to receive such rights
or warrants, then the Conversion Price in effect immediately prior
thereto shall be adjusted to equal the price determined by multiplying
(A) the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by (B) a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants
(without giving effect to any such issuance) and (2) the number of
shares which the aggregate proceeds from the exercise of such rights
or warrants for Common Stock would purchase at such Current Market
Price, and the denominator of which shall be the sum of (1) the number
of shares of Common Stock outstanding on the date of issuance of such
rights or warrants (without giving effect to any such issuance) and
(2) the number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become
effective immediately after such record date. In determining whether
any rights or warrants entitle the holders of Common Stock to
subscribe for or purchase shares of Common Stock at less than such
Current Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and upon
exercise of such rights or warrants, the value of such consideration,
if other than cash, to be determined by the Board of Directors (whose
determination shall, if made in good faith, be conclusive).
(iii) In case the Corporation shall pay a dividend or make
a distribution to all holders of its Common Stock after the Issue Date
of any shares of capital stock of the Corporation or its subsidiaries
(other than Common Stock) or evidences of its indebtedness or assets,
including securities (any of the foregoing being hereinafter in this
subparagraph (iii) called the "Securities"), but excluding rights,
warrants, dividends and distributions referred to in subparagraphs (i)
and (ii) above, regular periodic cash dividends payable out of the
Corporation's surplus that may from time to time be fixed by the Board
of Directors and dividends and distributions in connection with the
liquidation, dissolution or winding up of the Corporation, then in
each such case, the Conversion Price shall be adjusted so that it
shall equal the price determined by multiplying (A) the Conversion
Price in effect on the record date mentioned below by (B) a fraction,
the numerator of which shall be the Current Market Price per share of
the Common Stock on the record date mentioned below less the then fair
market value as determined by the Board of Directors (whose
determination shall, if made in good faith, be conclusive) as of such
record date of the portion of the Securities applicable to one share
of Common Stock, and the denominator of which shall be the Current
Market Price per share of the Common Stock on such record date;
provided, however, that in the event the then fair market value (as so
determined) of the portion of Securities so distributed applicable to
one share of Common Stock is equal
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<PAGE> 13
to or greater than the Current Market Price per share of Common Stock
on the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each holder of
shares of Preferred Stock shall have the right to receive the amount
and kind of Securities such holder would have received had such holder
converted each such share of Preferred Stock immediately prior to the
record date for the distribution of the Securities. Except as
provided in paragraph (h) below, such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(iv) Notwithstanding anything in subparagraph (ii) above,
if such rights or warrants shall by their terms provide for an
increase or increases with the passage of time or otherwise in the
price payable to the Corporation upon the exercise thereof, the
Conversion Price upon any such increase becoming effective shall
forthwith be readjusted (but to no greater extent than originally
adjusted by reason of such issuance or sale) to reflect the same.
Upon the expiration or termination of such rights or warrants, if any
such rights or warrants shall not have been exercised, then the
Conversion Price shall forthwith be readjusted and thereafter be the
rate which it would have been had an adjustment been made on the basis
that (A) the only rights or warrants so issued or sold were those so
exercised and they were issued or sold for the consideration actually
received by the Corporation upon such exercise plus the consideration,
if any, actually received by the Corporation for the granting of all
such rights or warrants whether or not exercised and (B) the
Corporation issued and sold a number of shares of Common Stock equal
to those actually issued upon exercise of such rights or warrants, and
such shares were issued and sold for a consideration equal to the
aggregate exercise price in effect under the rights or warrants
actually exercised at the respective dates of their exercise. For
purposes of subparagraph (ii), the aggregate consideration received by
the Corporation in connection with the issuance of shares of Common
Stock or of rights or warrants shall be deemed to be equal to the sum
of the aggregate offering price (before deduction of underwriting
discounts or commissions and expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable
upon the exercise of such rights or warrants into shares of Common
Stock.
(v) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this subparagraph (v) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment; and provided, however, that any adjustment shall be
required and shall be made in accordance with the provisions of this
Section 7 (other than this subparagraph (v)) not later than such time
as may be required in order to preserve the tax-free nature of a
distribution to the holders of shares of Common Stock. All
calculations under this Section 7 shall be made to the nearest cent
(with $.005 being rounded upward) or to the nearest 1/100th of a share
(with .005 of a share being rounded upward), as the case may be.
Anything in this paragraph (d) to the contrary notwithstanding, the
Corporation shall be entitled, to the extent permitted by law, to make
such reductions in the Conversion Price, in addition to those required
by this paragraph (d), as it in its discretion shall determine to be
advisable
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<PAGE> 14
in order that any stock dividend, subdivision of shares, distribution
of rights or warrants to purchase stock or securities, or distribution
of other assets or any other transaction which could be treated as any
of the foregoing transactions pursuant to Section 305 of the Internal
Revenue Code of 1986, as amended, hereafter made by the Corporation to
its stockholders shall not be taxable to such stockholders.
(e) In case the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share
exchange, sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Stock (each of the foregoing being referred to
as a "Transaction"), in each case as a result of which shares of Common Stock
shall be converted into the right to receive stock, securities or other
property (including cash or any combination thereof), then the Preferred Stock
remaining outstanding will thereafter no longer be subject to conversion into
Common Stock pursuant to Section 7, but instead shall be convertible into the
kind and amount of shares of stock and other securities and property receivable
(including cash) upon the consummation of such Transaction by a holder of that
number of shares or fraction thereof of Common Stock into which one share of
Preferred Stock was convertible immediately prior to such Transaction. The
Corporation shall not be a party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this paragraph (e) and it
shall not consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Preferred
Stock which will contain provisions enabling the holders of the Preferred Stock
which remains outstanding after such Transaction to convert into the
consideration received by holders of Common Stock at the Conversion Price
immediately after such Transaction. In the event that at any time, as a result
of an adjustment made pursuant to this Section 7, the Preferred Stock shall
become subject to conversion into any securities other than shares of Common
Stock, thereafter the number of such other securities so issuable upon
conversion of the shares of Preferred Stock shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Preferred Stock contained in this
Section 7. The provisions of this paragraph (e) shall similarly apply to
successive Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock that would cause an adjustment
to the Conversion Price of the Preferred Stock pursuant to the terms
of any of the paragraphs above (including such an adjustment that
would occur but for the terms of the first sentence of subparagraph
(d)(v) above);
(ii) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of any class or any other rights or warrants;
(iii) there shall be any reclassification or change of the
Common Stock (other than an event to which paragraph (d)(i) of this
Section 7 applies) or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of
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<PAGE> 15
the Corporation is required, or a statutory share exchange, or a self
tender offer by the Corporation for all or substantially all of its
outstanding shares of Common Stock, or the sale or transfer of all or
substantially all of the assets of the Corporation; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then, in addition to actions otherwise required to be taken pursuant to Section
8, the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of the Preferred Stock at their
addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least 15 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or rights or
warrants are to be determined or (B) the date on which such reclassification,
change, consolidation, merger, statutory share exchange, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or
occur, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification, change,
consolidation, merger, statutory share exchange, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice or any defect therein
shall not affect the legality or validity of the proceedings described in this
Section 7.
(g) Whenever the Conversion Price is adjusted as herein provided,
the Corporation shall promptly file with the Transfer Agent an officers'
certificate signed by the President or a Vice President and the Chief Financial
Officer or the Secretary of the Corporation setting forth the Conversion Price
after such adjustment, the method of calculation thereof and setting forth a
brief statement of the facts requiring such adjustment and upon which such
adjustment is based. If the calculation of the adjustment requires a
determination by the Board of Directors pursuant to paragraph (d)(iii) of this
Section 7 or any similar provision, such certificate shall include a copy of
the resolution of the Board of Directors relating to such determination.
Promptly after delivery of such certificate, the Corporation shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price, the facts requiring such adjustment and upon which such
adjustment is based and the date on which such adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the holder
of each share of Preferred Stock at such holder's last address as shown on the
stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective immediately after a record date for
an event and the date fixed for conversion pursuant to Section 7 occurs after
such record date but before the occurrence of such event, the Corporation may
defer until the actual occurrence of such event (i) issuing to the holder of
any share of Preferred Stock surrendered for conversion the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
holder any amount in cash in lieu of any fraction pursuant to paragraph (c) of
this Section 7.
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<PAGE> 16
(i) For purposes of this Section 7, the number of shares of Common
Stock at any time outstanding shall not include any shares of Common Stock then
owned or held by or for the account of the Corporation or any corporation
controlled by the Corporation.
(j) If any single action would require adjustment pursuant to more
than one paragraph of this Section 7, only one adjustment shall be made and
such adjustment shall be the amount of adjustment which has the highest
absolute value to the holders of the Preferred Stock.
(k) In case the Corporation shall take any action affecting the
Common Stock, other than action described in this Section 7, which in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Preferred Stock, the
Conversion Price for the Preferred Stock may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as the Board of
Directors may determine to be equitable in the circumstances. Subject to the
foregoing, there shall be no adjustment of the Conversion Price in case of the
issuance of any stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 7.
(l) The Corporation shall at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purpose of effecting conversion of the Preferred
Stock, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Preferred Stock not theretofore
converted. For purposes of this paragraph (l), the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding shares
of Preferred Stock shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value of the shares of Common Stock
deliverable upon conversion of the Preferred Stock, the Corporation will take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
The Corporation will endeavor to make the shares of Common Stock
required to be delivered upon conversion of the Preferred Stock eligible for
trading upon the New York Stock Exchange or upon any national securities
exchange upon which the Common Stock shall then be traded, prior to such
delivery.
Prior to the delivery of any securities which the Corporation shall be
obligated to deliver upon conversion of the Preferred Stock, the Corporation
will endeavor to comply with all federal and state laws and regulations
thereunder requiring the registration of such securities with, or any approval
of or consent to the delivery thereof by, any governmental authority.
(m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
the shares of Preferred Stock (or any other securities issued on account of the
Preferred Stock pursuant hereto) or shares of Common Stock
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<PAGE> 17
on conversion of the Preferred Stock pursuant hereto; provided, however, that
the Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of
Preferred Stock (or any other securities issued on account of the Preferred
Stock pursuant hereto) or shares of Common Stock in a name other than the name
in which the shares of Preferred Stock with respect to which such Common Stock
shares are issued were registered and the Corporation shall not be required to
make any issue or delivery unless and until the person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or has
established, to the reasonable satisfaction of the Corporation, that such tax
has been paid or is not required to be paid.
(n) The Corporation shall not take any action which results in an
adjustment of the number of shares of Common Stock issuable upon conversion of
a share of Preferred Stock if the total number of shares of Common Stock
issuable after such action upon conversion of the Preferred Stock then
outstanding, together with the total number of shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized under the Articles of Incorporation. Subject to the foregoing, the
Corporation shall take all such actions as it may deem reasonable under the
circumstances to provide for the issuance of such number of shares of Common
Stock as would be necessary to allow for the conversion from time to time, and
taking into account adjustments as herein provided, of outstanding shares of
the Preferred Stock in accordance with the terms and provisions of the Articles
of Incorporation.
8. Special Conversion Rights.
(a) Until March 5, 2001, upon the occurrence of a Change of
Control with respect to the Corporation that is not a Common Stock Transaction,
each holder of Preferred Stock shall have the right, at the holder's option,
for a period of 30 days after the mailing of a notice by the Corporation to the
holders of the Preferred Stock pursuant to Section 12 hereof that a Change of
Control has occurred, to convert all, but not less than all, of such holder's
Preferred Stock into Common Stock of the Corporation at an adjusted Conversion
Price per share equal to the Special Conversion Price (as defined in paragraph
(d) below). The Corporation may, at its option, in lieu of providing Common
Stock upon any such special conversion, pay to the holder cash equal to the
Market Value (as defined in paragraph (d) below) of the Common Stock multiplied
by the number of shares of Common Stock into which such shares of Preferred
Stock would have been convertible immediately prior to such Change of Control
at an adjusted Conversion Price equal to the Special Conversion Price. The
Special Conversion Price arising upon a Change of Control shall only be
applicable with respect of the first Change of Control that occurs after the
Issue Date of any shares of Preferred Stock. Preferred Stock which becomes
convertible pursuant to a special conversion right shall, unless so converted,
remain convertible into the number of shares of Common Stock that the holders
of the Preferred Stock would have owned immediately after the Change of Control
if the holders had converted the Preferred Stock immediately before the
effective date of the Change of Control, subject to adjustment as provided in
Section 7 hereof.
(b) Upon the occurrence of a Change of Control with respect to the
Corporation, within 30 days after such occurrence, the Corporation shall mail
to each registered holder of Preferred Stock a notice of such occurrence (the
"Special Conversion Notice") setting forth the following:
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<PAGE> 18
(i) the event constituting the Change of Control;
(ii) the conversion date upon exercise of the applicable
special conversion right;
(iii) the Special Conversion Price;
(iv) the conversion rate (and related conversion price)
then in effect under Section 7 and the continuing conversion rights,
if any, under Section 7;
(v) the name and address of the paying agent and
conversion agent;
(vi) that holders who want to convert shares of Preferred
Stock must exercise such conversion right within the 30-day period
after the mailing of such notice by the Corporation;
(vii) that exercise of such conversion right shall be
irrevocable and no dividends on shares of Preferred Stock (or portions
thereof) tendered for conversion shall accrue from and after the
conversion date; and
(viii) that the Corporation (or a successor corporation, if
applicable) may, at its option, elect to pay cash (specifying the
amount thereof per share) for all shares of Preferred Stock tendered
for conversion.
(c) A holder of Preferred Stock must exercise the special
conversion right within the 30-day period after the mailing of the Special
Conversion Notice or such special conversion right shall expire. Such right
must be exercised in accordance with Section 7(b) to the extent the procedures
in Section 7(b) are consistent with the special provisions of this Section 8.
Exercise of such conversion right shall be irrevocable, to the extent permitted
by applicable law, and dividends on Preferred Stock tendered for conversion
shall cease to accrue from and after the conversion date. The conversion date
with respect to the exercise of a special conversion right arising upon a
Change of Control shall be the 30th day after the mailing of the Special
Conversion Notice. In taking any action in connection with any Change of
Control or related special conversion right, the Company will comply with all
applicable federal securities laws and regulations.
(d) The following definitions shall apply to terms used in this
Section 8:
(i) a "Change of Control" means any of the following
events: (A) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the
assets of the Corporation and its subsidiaries taken as a whole to any
"person" or group of related persons (a "Group") (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); (B) the consummation of any transaction
(including, without limitation, any purchase, sale, acquisition,
disposition, merger or consolidation) the result of which is that any
"person"
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<PAGE> 19
or Group, other than one or more Permitted Holders, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act) of more than 50% of the aggregate voting
power of all classes of capital stock of the Corporation having the
right to elect directors under ordinary circumstances; (C) the
adoption of a plan relating to the liquidation or dissolution of the
Corporation; or (D) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors (together with any new directors whose elections by such
Board of Directors or whose nomination for election by the
shareholders of the Corporation was approved by a vote of a majority
of the directors of the Corporation then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in
office.
(ii) a "Common Stock Transaction" shall mean any
transaction in which more than 50% of the value (as determined in good
faith by the Board of Directors of the Corporation) of the
consideration received by holders of the Corporation's Common Stock
consists of common stock that for each of the ten consecutive trading
days prior to the effective date of the transaction has been admitted
for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the Nasdaq National Market.
(iii) the "Market Value" of the Common Stock for any day
means the last reported sale price, regular way, on such day, or, if
no sale takes place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in either case as
reported on the New York Stock Exchange Consolidated Transactions
Tape, or, if the Corporation's Common Stock is not listed or admitted
to trading on the New York Stock Exchange on such day, on the
principal national securities exchange on which the Corporation's
Common Stock is listed or admitted to trading, if the Corporation's
Common Stock is listed on a national securities exchange, or the
Nasdaq National Market, or, if the Corporation's Common Stock is not
quoted or admitted to trading on such quotation system, on the
principal quotation system on which the Corporation's Common Stock may
be listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of
the Corporation's Common Stock in the over-the-counter market on the
day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or,
if not so available in such manner, as furnished by any New York Stock
Exchange member firm selected from time to time by the Board of
Directors of the Company for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of
Directors of the Company.
(iv) "Permitted Holders" means (a) Robert A. Belfer, Renee
E. Belfer, Laurence D. Belfer and Jack Saltz, (b) the spouses and
descendants of such individuals, (c) the estates or legal
representatives of the individuals named in clauses (a) and (b), and
(d) trusts created for the benefit of Persons named in clauses (a) and
(b).
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(v) the "Special Conversion Price" shall mean the higher
of (a) the Market Value of the Common Stock as of the date of the
Change of Control or (b) $12.00.
9. Ranking. Any class or classes of stock of the Corporation
shall be deemed to rank:
(i) prior to the Preferred Stock, as to dividends or as
to the distribution of assets upon liquidation, dissolution or winding
up, if the holders of such class shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the
holders of Preferred Stock;
(ii) on a parity with the Preferred Stock, as to dividends
or as to the distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share thereof be different
from those of the Preferred Stock, if the holders of such class of
stock and the Preferred Stock shall be entitled to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective
amounts of accrued and unpaid dividends per share or liquidation
prices, without preference or priority of one over the other; and
(iii) junior to the Preferred Stock, as to dividends or as
to the distribution of assets upon liquidation, dissolution or winding
up, if such stock shall be the Common Stock or if the holders of
Preferred Stock shall be entitled to receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in preference or priority to the holders of shares of
such stock.
10. Voting.
(a) Except as herein provided or as otherwise from time to time
required by law, holders of Preferred Stock shall have no voting rights.
Whenever, at any time or times, dividends payable on the shares of Preferred
Stock at the time outstanding have not been paid in an aggregate amount equal
to at least six quarterly dividends on such shares (whether or not
consecutive), the holders of Preferred Stock shall have the right, voting
separately as a class with the holders of shares of any one or more other
series of stock ranking on a parity as to dividends with the Preferred Stock
upon which like voting rights have been conferred and are exercisable (the
Preferred Stock and any such other stock, collectively for purposes hereof, the
"Defaulted Preferred Stock"), to elect two directors of the Corporation at the
Corporation's next annual meeting of the stockholders and at each subsequent
annual meeting of stockholders; provided, however, that if such voting rights
shall become vested more than 90 days or less than 20 days before the date
prescribed for the annual meeting of stockholders, thereupon the holders of the
shares of Defaulted Preferred Stock shall be entitled to exercise their voting
rights at a special meeting of the holders of shares of Defaulted Preferred
Stock as set forth herein. At elections for such directors, each holder of
Preferred Stock shall be entitled to one vote for each share held (the holders
of shares of any other series of Defaulted Preferred Stock ranking on such a
parity being entitled to such number of votes, if any, for each share of stock
held as may be granted to them).
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Upon the vesting of such right of the holders of Defaulted Preferred Stock, the
then authorized number of members of the Board of Directors shall automatically
be increased by two and the two vacancies so created shall be filled by vote of
the holders of outstanding Defaulted Preferred Stock as hereinafter set forth.
The right of holders of Defaulted Preferred Stock, voting separately as a
class, to elect members of the Board of Directors as aforesaid shall continue
until such time as all dividends accumulated on Defaulted Preferred Stock shall
have been paid, or declared and funds set aside for payment in full, at which
time such right shall terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every subsequent default of the
character above mentioned. As long as any shares of Preferred Stock shall
remain outstanding, the number of directors of the Corporation (excluding any
directors elected by vote of the holders of shares of Defaulted Preferred
Stock) elected at any meeting of stockholders of the Corporation at which
directors are to be elected shall not be such as would cause the number of
directors in office after such meeting (excluding any directors elected by vote
of the holders of shares of Defaulted Preferred Stock) to exceed the number
which is two less than the maximum number of directors permitted by the
Articles of Incorporation.
(b) Whenever such voting right shall have vested, such right may
be exercised initially either at a special meeting of the holders of shares of
Defaulted Preferred Stock called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at such meetings, or by the written consent of such holders pursuant
to Section 78.320 of the Nevada Private Corporations Law.
(c) At any time when such voting right shall have vested in the
holders of shares of Defaulted Preferred Stock entitled to vote thereon, and if
such right shall not already have been initially exercised, an officer of the
Corporation shall, upon the written request of 10% of the holders of record of
shares of such Defaulted Preferred Stock then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of holders of shares of
such Defaulted Preferred Stock. Such meeting shall be held at the earliest
practicable date upon the notice to holders of Defaulted Preferred Stock given
as required for annual meetings of stockholders at the place for holding annual
meetings of stockholders of the corporation or, if none, at a place designated
by the Secretary of the Corporation. If such meeting shall not be called by
the proper officers of the Corporation within 30 days after the personal
service of such written request upon the Secretary of the Corporation, or
within 30 days after mailing the same within the United States, by registered
mail, addressed to the Secretary of the Corporation at its principal office
(such mailing to be evidenced by the registry receipt issued by the postal
authorities), then the holders of record of 10% of the shares of Defaulted
Preferred Stock then outstanding may designate in writing any person to call
such meeting at the expense of the Corporation, and such meeting may be called
by such person so designated upon the notice to holders of Defaulted Preferred
Stock given as required for annual meetings of stockholders and shall be held
at the same place as is elsewhere provided in this paragraph. Any holder of
shares of Defaulted Preferred Stock then outstanding that would be entitled to
vote at such meeting shall have access to the stock books of the Corporation
for the purpose of causing a meeting of stockholders to be called pursuant to
the provisions of this paragraph. Notwithstanding the provisions of this
paragraph, however, no such special meeting shall be called or held during a
period within 45 days immediately preceding the date fixed for the next annual
meeting of stockholders.
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(d) The directors elected as provided herein shall serve until the
next annual meeting or until their respective successors shall be elected and
shall qualify; any director elected by the holders of Defaulted Preferred Stock
may be removed without cause by, and shall not be removed without cause
otherwise than by, the vote of the holders of a majority of the outstanding
shares of the Defaulted Preferred Stock who are entitled to participate in such
election of directors, voting separately as a class, at a meeting called for
such purpose or by written consent as permitted by law and the Articles of
Incorporation and By-laws of the Corporation. If the office of any director
elected by the holders of Defaulted Preferred Stock, voting separately as a
class, becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office or otherwise, the remaining director
elected by the holders of Defaulted Preferred Stock, voting separately as a
class, may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred. Upon any termination of the right of
the holders of Defaulted Preferred Stock to vote for directors as herein
provided, the term of office of all directors then in office elected by the
holders of Defaulted Preferred Stock, voting separately as a class, shall
terminate immediately. Whenever the terms of office of the directors elected
by the holders of Defaulted Preferred Stock, voting separately as a class,
shall so terminate and the special voting powers vested in the holders of
Defaulted Preferred Stock shall have expired, the number of directors shall be
reduced by the number of directors whose term of office shall have terminated
as provided hereinabove.
(e) So long as any shares of the Preferred Stock remain
outstanding, the affirmative vote or consent of the holders of at least
two-thirds of the shares of Preferred Stock outstanding at the time given
either by written consent or in person or by proxy at any special or annual
meeting, shall be necessary to permit, effect or validate any amendment,
alteration or repeal, whether by merger, consolidation or otherwise, of the
Articles of Incorporation that will (i) increase or decrease the aggregate
number of authorized shares of such series or of Preferred Stock, (ii) increase
or decrease the par value of the Preferred Stock, (iii) effect an exchange,
reclassification or cancellation of all or part of the shares of such series or
of the Preferred Stock, (iv) effect an exchange, or create a right of exchange,
of all or any part of the shares of another class into the shares of such
series or of Preferred Stock, (v) change the designations, preferences,
limitations or relative rights of the shares of such series or the Preferred
Stock, (vi) change the shares of such series or the Preferred Stock into the
same or a different number of shares of the same class or series or another
class or series, (vii) create a new class or series of shares having rights and
preferences equal, prior or superior to the shares of such series or the
Preferred Stock, or increase the rights and preferences of any class or series
having rights and preferences equal, prior or superior to the shares of such
series or the Preferred Stock, or increase the rights and preferences of any
class or series having rights or preferences later or inferior to the shares of
such series or the Preferred Stock in such a manner as to become equal, prior
or superior to the shares of such class or series, (viii) divide the shares of
Preferred Stock into series and fix and determine the designation of such
series and the variations in the relative rights and preferences between the
shares of such series, (ix) limit or deny the existing preemptive rights of the
shares of such series or of the Preferred Stock, or (x) cancel or otherwise
affect dividends on the shares of such series or the Preferred Stock that had
accrued but had not been declared. The foregoing provisions are not applicable
to the designation of any series by the Board of Directors in the manner
prescribed by the Articles of Incorporation. If the holders of the outstanding
shares of Preferred Stock are
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<PAGE> 23
entitled to vote as a class on a proposed amendment and the amendment would
affect all series of such class (other than any series of which no shares are
outstanding or any series that is not affected by the amendment) equally, then
the holders of the separate series shall not be entitled to separate class
votes, but shall instead vote together as one class. Notwithstanding the
foregoing, the approval of a proposed amendment to the Articles of
Incorporation that would solely effect changes in the designations,
preferences, limitations and relative rights, including voting rights, of one
or more series of shares that have been established by the Board of Directors
as prescribed by the Articles of Incorporation, shall not require the approval
of the holders of the outstanding shares of any class or series other than such
series if the preferences, limitations and relative rights of such series after
giving effect to such amendment and of any series that may be established as a
result of a reclassification of such series are, in each case, within those
permitted to be fixed and determined by the Board of Directors with respect to
the establishment of any new series of shares pursuant to the authority granted
the Board of Directors by the Articles of Incorporation.
11. Record Holders. The Corporation and the Transfer Agent may
deem and treat the record holder of any shares of Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
12. Notice. Except as may otherwise be provided by law or
provided for herein, all notices referred to herein shall be in writing, and
all notices hereunder shall be deemed to have been given upon receipt, in the
case of a notice of conversion given to the Corporation as contemplated in
Section 7(b) hereof, or, in all other cases, upon the earlier of receipt of
such notice or three Business Days after the mailing of such notice if sent by
registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms hereof) with postage prepaid, addressed: if to the
Corporation, to its offices at 767 Fifth Avenue, 46th Floor, New York, New York
10053 (Attention: Secretary) or other agent of the Corporation designated as
permitted hereby; or, if to any holder of the Preferred Stock, to such holder
at the address of such holder of the Preferred Stock as listed in the stock
record books of the Corporation (which shall include the records of the
Transfer Agent), or to such other address as the Corporation or holder, as the
case may be, shall have designated by notice similarly given.
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IN WITNESS WHEREOF, this Certificate has been signed on behalf of the
Corporation by its President and attested to by its Assistant Secretary, all as
of the 5th day of March, 1998.
BELCO OIL & GAS CORP.
By: /s/ LAURENCE D. BELFER
--------------------------------
Laurence D. Belfer, President
Attest:
By: /s/ DOMINICK J. GOLIO
------------------------------------------
Dominick J. Golio, Assistant Secretary
STATE OF NEW YORK )
)
COUNTY OF QUEENS )
This instrument was acknowledged before me on March 5, 1998, by
Laurence D. Belfer, as President of Belco Oil & Gas Corp.
/s/ SHERYL J. CHOW
-------------------
Notary Public
(My Commission Expires 3/6/99)
SHERYL J. CHOW
Notary Public, State of New York
No. 01CH5040192
Qualified in Queens County
Commission Expires March 06,1999
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