As filed: June 11, 1999 Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
Registration Statement under the Securities Act of 1933
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FX ENERGY, INC.
----------------------------------------------------
(exact name of registrant as specified in its charter)
NEVADA 87-0504461
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(state or jurisdiction of incorporation (I.R.S. employer
or organization) identification no.)
3006 HIGHLAND DRIVE, SUITE 206, SALT LAKE CITY, UTAH 84106
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(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
DAVID N. PIERCE, 3006 HIGHLAND DRIVE, SUITE 206, SALT LAKE CITY, UTAH 84106
(801) 486-5555
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
James R. Kruse
<PAGE> 1
KRUSE, LANDA & MAYCOCK, L.L.C.
50 West Broadway, Eighth Floor
Salt Lake City, Utah 84101
Telephone: (801) 531-7090 Telecopy: (801) 531-7091
e-mail: [email protected]
---------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ...[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ...[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
[CAPTION]
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(2) FEE
- -------------------- ------------ -------------- -------------- ------------
Debt Securities (3)
Preferred Stock, par
value $0.001 per
share (4)(5)
Depositary Shares (5) (6) (6) (6) (6)
Common Stock, par value
$0.001 per share, and
related Purchase
Rights (7)
Warrants (8)
Guarantees of Debt
Securities (9)
Total 100,000,000 100% $100,000,000 $27,800
(10) (10)
<PAGE> 2
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON THE DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
(1) The proposed maximum offering price per unit will be determined from time
to time by the registrant in connection with the issuance by the registrant of
the securities registered hereunder.
<PAGE> 3
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o) under
the Securities Act of 1933.
(3) Subject to note (10) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities are
issued at an original issue discount, then the offering price shall be in the
greater principal amount as shall result in an aggregate initial offering price
not to exceed $100,000,000 less the dollar amount of any securities previously
issued hereunder.
(4) Subject to note (10) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time to
time, by the registrant.
(5) Subject to note (10) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary Receipts
issued pursuant to a Deposit Agreement. If the registrant elects to offer to the
public fractional interests in shares of Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing the
fractional interests and the shares of Preferred Stock will be issued to the
depositary under the Deposit Agreement.
(6) Not applicable pursuant to General Instruction II.D. of Form S-3.
(7) Subject to note (10) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the registrant. Preferred stock purchase rights are evidenced by
certificates for shares of the Common Stock and automatically trade with the
Common Stock. Value attributable to such preferred stock purchase rights, if
any, is reflected in the market price of the Common Stock. There is also being
<PAGE> 4
registered hereunder an indeterminate number of shares of Common Stock as shall
be issuable upon conversion or redemption of Preferred Stock or Debt Securities
registered hereunder.
(8) Subject to note (10) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to purchase
Debt Securities, Preferred Stock, or Common Stock registered hereunder.
(9) Subject to (10) below, there is being registered hereunder an indeterminate
principal amount of Guarantees of Debt Securities.
(10) In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration Statement
exceed $100,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of Common
Stock registered hereunder is further limited to that which is permissible under
Rule 415(a)(4) under the Securities Act of 1933. The securities registered
hereunder may be sold separately or as units with other securities registered
hereunder.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
REGISTRANT MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JUNE 11, 1999
PROSPECTUS
FX ENERGY, INC.
<PAGE> 5
$100,000,000
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
GUARANTEES OF DEBT SECURITIES
FX Energy, Inc. may offer and sell from time to time in one or more
classes or series and in amounts, at prices and on terms that FX Energy will
determine at the time of the offering, with an aggregate initial offering price
of up to $100,000,000:
- debt securities;
- common stock;
- preferred stock;
- depositary shares relating to preferred stock of FX Energy;
- warrants to purchase debt securities, common stock or preferred stock;
and
- guarantees of the payment of debt securities issued by one or more
subsidiaries of FX Energy, Inc.
FX Energy will provide specific terms of these securities in supplements to
this prospectus. You should read this prospectus and any supplement carefully
before you invest.
<PAGE> 6
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
This prospectus is dated June 11, 1999.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that FX Energy filed
with the Securities and Exchange Commission (the "SEC") using a "shelf"
registration process. Under this shelf process, FX Energy may, over the next
two years, sell any combination of the securities described in this prospectus
in one or more offerings up to a total dollar amount of $100,000,000. This
prospectus provides you with a general description of the securities FX Energy
may offer. Each time FX Energy sells securities, FX Energy will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find More Information."
SPECIAL NOTE ABOUT FORWARD-LOOKING INFORMATION
This prospectus and the information incorporated by reference contain
statements about the future, sometimes referred to as "forward-looking"
statements. Forward-looking statements are typically identified by the use of
the words "believe," "may," "will," "should," "expect," "anticipate,"
"estimate," "project," "propose," "plan," "intend" and similar words and
<PAGE> 7
expressions. Statements that describe FX Energy's future strategic plans, goals
or objectives are also forward-looking statements. Any forward-looking
statements, including those regarding FX Energy or its management's current
beliefs, expectations, anticipations, estimations, projections, proposals, plans
or intentions, are not guarantees of future performance or results or events and
involve risks and uncertainties, such as those included in the applicable
prospectus supplement under the caption, "Risk Factors", and the following:
- The future results of drilling individual wells and other exploration
and development activities;
- Future events that may result in the need for additional capital;
- Fluctuations in prices for oil and gas;
- Uncertainties of certain terms to be determined in the future relating
to FX Energy's oil, gas and mining interests, including exploitation
fees, royalty rates and other matters;
- Future drilling and other exploration schedules and sequences for
various wells and other activities;
- Uncertainties regarding future political, economic, regulatory, fiscal,
taxation and other policies in Poland;
- The future ability of FX Energy to attract strategic partners to share
the costs of exploration, exploitation, development and acquisition
activities; and
- Future plans and the financial and technical resources of strategic
partners.
The forward-looking statements are based on present circumstances and on FX
Energy's predictions about events that have not occurred, which may not occur or
which may occur with different consequences and timing than those now assumed or
anticipated. Actual events or results may differ materially from those discussed
in the forward-looking statements as a result of various factors, including the
risk factors discussed below. The cautionary statements are intended to be
applicable to all related forward-looking statements wherever they appear in
<PAGE> 8
this prospectus or in information incorporated by reference. FX Energy assumes
no obligation to update such forward-looking statements or to update reasons
that actual results could differ materially from those anticipated in such
forward-looking statements.
SUMMARY
FX ENERGY
FX Energy is an independent oil and gas exploration, development and
production company, currently focused on oil and gas opportunities in the
Republic of Poland. FX Energy has acquired multiple high potential exploration
opportunities on large acreage blocks in Poland. As of June 1, 1999, FX Energy
was the largest foreign oil and gas exploration acreage holder in Poland, in
terms of both gross and net acres, with exploration rights covering
approximately 15.8 million gross acres, including 11.5 million gross acres
controlled by FX Energy and Apache Corporation, options covering 3.4 million
gross acres controlled by the Polish Oil and Gas Company ("POGC") and 0.9
million gross acres controlled solely by FX Energy. FX Energy has strategic
alliances with Apache Corporation and POGC to explore for oil and gas,
capitalize on development opportunities, gain access to geological and
geophysical data, obtain project financing and conduct other activities in
Poland.
FX Energy is currently focusing its oil and gas exploration program in the
Lublin, Carpathian, Pomeranian, Warsaw West and Baltic project areas in Poland.
FX Energy has exploratory agreements with Apache covering all of Poland, except
FX Energy's Baltic Project Area, and with POGC covering the Lublin, Carpathian,
and Pomeranian project areas.
<PAGE> 9
FX Energy intends to continue to concentrate its activities in Poland
because of its:
- significant oil and gas potential from geologically diverse hydrocarbon
provinces;
- rapidly growing free market economy and competitive regulatory
environment;
- relatively modern industrial infrastructure, including drilling and
service companies, pipelines, refineries and railroads;
dependence on imports for approximately 98% and 60% of its oil and gas
consumption, respectively; and
- internationally competitive fiscal regime regarding the development of
oil and gas resources, including a current 6% government royalty and an
exploitation license fee with no back-end governmental participation.
BUSINESS STRATEGY
The principal components of FX Energy's strategy are:
- develop and expand strategic alliances with Apache, POGC and others to
obtain significant financial and operational assistance and to enhance
FX Energy's ability to pursue additional opportunities in Poland;
- create a program of lower risk appraisal and development opportunities
to balance against its ongoing high potential exploration program on its
large acreage position in Poland by:
= seeking acquisitions of proved reserves that are currently producing
or can be placed into production through the investment in production
infrastructure and the implementation of a long-term exploitation
program;
= pursuing lower risk appraisal and development drilling opportunities
in Poland by acquiring interests in or near areas containing proven
<PAGE> 10
reserves or in areas in which FX Energy believes modern drilling and
production techniques will result in commercially producing wells; and
= advancing the high potential exploration program, now principally
the primary responsibility of Apache, on the large project areas in
which FX Energy already holds exploration rights.
PRINCIPAL CURRENT ACTIVITIES
FX Energy is implementing its strategy through the following current
activities:
- Lachowice Field Development. In June 1999, FX Energy and Apache began a
program to test and recomplete up to three existing wells initially
determined by POGC to contain hydrocarbons, and if warranted, to
commence additional developmental drilling and construction of
production facilities in order to initiate production in 2000.
- Possible Proved Reserve Opportunities. FX Energy and Apache are
reviewing data from existing POGC fields with proved reserves that may
be suitable for possible joint acquisition, the installation of
production infrastructure and the implementation of a long-term
exploitation program.
- New Appraisal/Development Projects. Based on a review of data provided
by POGC, FX Energy and Apache intend to propose to POGC possible joint
development and production operations, under arrangements similar to the
Lachowice model, on several existing POGC discoveries, shut-in fields
and under-developed properties in Poland.
- Ongoing Exploration Program. FX Energy and Apache will continue their
ongoing exploration program this year in Poland. Apache has committed
to spud five more wells this year and to pay FX Energy's share of costs.
POGC is expected to join in this program for up to a one-third interest.
In addition, FX Energy and Apache will acquire new seismic in the Lublin
and Carpathian project areas and will reprocess existing POGC seismic in
<PAGE> 11
their other project areas to prepare for the continuation of their
exploration program in 2000 and 2001.
WHERE YOU CAN FIND MORE INFORMATION
FX Energy files annual, quarterly and special reports, proxy statements and
other information with the SEC. FX Energy's SEC filings are available to the
public over the Internet at the SEC's web site at http:// www.sec.gov. You may
also read and copy any document FX Energy files with the SEC at its public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. FX Energy's filings with the SEC are also available at the
office of the Nasdaq Stock Market, 1735 "K" Street, N.W., Washington, D.C.
20006.
The SEC allows FX Energy to "incorporate by reference" the information FX
Energy files with them, which means that FX Energy can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that FX Energy files later with the SEC will automatically update
and supersede this information. FX Energy incorporates by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until FX Energy
sells all of the securities.
(1) Annual Report on Form 10-K for the year ended December 31, 1998;
(2) Current reports on Form 8-K reporting events of February 16, March 2,
May 18, and June 10, 1999;
(3) Quarterly report on Form 10-Q for the quarter ended March 31, 1999, as
amended May 18 and May 27, 1999; and
(4) Proxy Statement relating to the FX Energy 1999 annual stockholders'
meeting.
<PAGE> 12
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing or telephoning FX Energy at the following address: FX
Energy, Inc. 3006 Highland Drive, Suite 206, Salt Lake City, Utah 84106;
Attention: Scott J. Duncan, telephone (801) 486-5555, facsimile (801) 486-5575,
e-mail [email protected].
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. FX Energy has not
authorized anyone else to provide you with different information. FX Energy is
only offering these securities in states where the offer is permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
USE OF PROCEEDS
Unless FX Energy specifies otherwise in the applicable prospectus
supplement, the net proceeds from the sale of offered securities will be used
for general corporate purposes, which may include:
- funding expenditures, including paying for exploration, development
and acquisitions;
- providing working capital;
- redeeming or repurchasing securities of FX Energy or any subsidiary;
and/or
- repaying debt;
<PAGE> 13
FX Energy may temporarily invest the net proceeds FX Energy receives from any
offering of securities or use the net proceeds to repay short-term debt until FX
Energy can use them for their stated purposes.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
FX Energy's consolidated ratios of earnings to fixed charges and earnings
to fixed charges and preferred stock dividends for each of the periods indicated
are as follows:
THREE
MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------------------- ----------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Ratio of earnings to
fixed charges (a) (5) (6) (15) (44) N/A N/A
Ratio of earnings to
fixed charges and
preferred stock
dividends (b) (5)(a) (5)(a) (15)(b) (44)(b) N/A(b) N/A(b)
(a) The ratio indicates a less than one-to-one coverage because the
earnings were inadequate to cover the fixed charges for the period. FX
Energy's historical earnings for the years ended December 31, 1994, 1995,
1996, 1997 and 1998 were insufficient to cover FX Energy's fixed charges.
The amounts of the deficiencies were $778,000, $2.0 million, $4.6 million
<PAGE> 14
and $3.5 million in 1994, 1995, 1996 and 1997, respectively for the ratio
of earnings to fixed charges and to fixed charges and preferred stock
dividends. FX Energy had no long-term debt or fixed charges during 1998 or
during the three months ended March 31, 1999. These ratios are based on
continuing operations. "Earnings" is determined by adding:
- income before income taxes, and
- fixed charges, net of interest capitalized.
"Fixed charges" consist of interest (whether expensed or capitalized) and
that portion of rentals considered to be representative of the interest
factor. "Fixed charges and preferred stock dividends" represent fixed
charges (as described above) and preferred stock dividend requirements of
FX Energy.
(b) No Preferred Stock outstanding.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be issued under an indenture between FX Energy and
a trustee chosen by FX Energy. The trustee for each series of debt securities
will be identified in the applicable prospectus supplement.
The following description highlights the general terms and provisions of
the debt securities. The summary is not complete. When debt securities are
offered in the future, the prospectus supplement will explain the particular
terms of those securities and the extent to which these general provisions may
apply.
The form of the indenture has been filed as an exhibit to the registration
statement, and you should read the indenture for provisions that may be
<PAGE> 15
important to you. Capitalized terms used in the summary have the meanings
specified in the indenture.
GENERAL
Any debt securities FX Energy offers will be FX Energy's direct, unsecured
general obligation. The debt securities will be either senior debt securities or
subordinated debt securities. The senior debt securities will rank equally with
all of FX Energy's other senior and unsubordinated debt. The subordinated debt
securities will have a junior position to all of FX Energy's Senior Indebtedness
as designated by FX Energy's board of directors or in a supplemental indenture.
The indenture does not limit the aggregate principal amount of debt
securities that can be issued. The debt securities may be issued in one or more
series as may be authorized from time to time by FX Energy.
A prospectus supplement and a supplemental indenture relating to any series
of debt securities being offered will include specific terms relating to the
offering. These terms will include some or all of the following:
- title of the debt securities;
- total principal amount of the debt securities;
- the dates on which the principal and premium, if any, of the debt
securities will be payable;
- the interest rate (or method of determining the rate) which the debt
securities will bear and the interest payment dates for the debt
securities;
- the place where FX Energy will pay (or the method of payment of)
principal, premium and interest on the debt securities;
- any optional redemption periods and prices;
- whether FX Energy will issue the debt securities in registered or bearer
form;
<PAGE> 16
- any special provisions relating to bearer securities or global
securities representing individual bearer securities;
- any sinking fund or other provisions that would obligate FX Energy to
repurchase or otherwise redeem the debt securities;
- any rights of the holders of the debt securities to convert or exchange
the debt securities into or for other securities or property and the
terms and conditions of the conversion or exchange;
- denominations in which FX Energy will issue the debt securities, if
other than $1,000 and any integral multiple thereof;
- manner in which FX Energy will determine the amounts of principal,
premium or interest payments on the debt securities if these amounts may
be determined by reference to an index or based on a formula;
- if prior to maturity the actual principal amount of the debt securities
payable at maturity is not determinable, the manner in which FX Energy
will determine the deemed principal amount of the debt securities
payable at maturity;
- any changes or additions to the defeasance or discharge provisions;
- the currency in which FX Energy will pay principal, premium and interest
on the debt securities if other than the United States dollar;
- if other than the entire principal amount, the portion of the principal
amount of the debt securities payable if the maturity of the debt
securities is accelerated, or provable in bankruptcy;
- any provisions relating to any security provided for the debt
securities;
- any change in or addition to the events of default;
- whether FX Energy will issue the debt securities in the form of global
securities and the terms and conditions of the global securities;
- any trustees, authenticating or paying agents, transfer agents or
registrars with respect to the debt securities;
- the creation of or any change or addition to the covenants or
definitions relating to the sale or conveyance of assets by FX Energy or
to the provisions relating to the consolidation or merger of FX Energy;
<PAGE> 17
- the terms of any guaranty of the debt securities;
- any subordination provisions relating to the debt securities;
- the dates for certain required reports to the trustee relating to debt
securities which do not bear interest; and
- any other terms of the debt securities.
FX Energy may issue debt securities at a discount below their stated
principal amount. Even if FX Energy does not issue the debt securities below
their stated principal amount, for United States federal income tax purposes the
debt securities may be deemed to have been issued with a discount because of
certain interest payment characteristics. FX Energy will describe in a
prospectus supplement the United States federal income tax considerations
applicable to debt securities issued at a discount or deemed to be issued at a
discount. FX Energy will also describe in a prospectus supplement the special
United States federal income tax considerations or other restrictions or terms
applicable to debt securities issuable in bearer form, offered exclusively to
foreigners or denominated in a foreign currency.
DENOMINATIONS, REGISTRATION, TRANSFER AND PAYMENT
FX Energy may issue the debt securities in registered form without coupons,
in bearer form with or without coupons or in the form of one or more global
securities, as described below under the heading "Global Securities." Unless
specified by FX Energy otherwise in the prospectus supplement, registered
securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple of $1,000. Global securities will be issued in a
denomination equal to the total principal amount of outstanding debt securities
of the series represented by the global security. The denomination of debt
securities denominated in a foreign or composite currency will be described in a
prospectus supplement. If debt securities are issuable as bearer securities,
certain special limitations and considerations, which will be described in a
prospectus supplement, will apply.
<PAGE> 18
You may present registered securities for exchange or transfer at the
corporate trust office of the trustee or at any other office or agency
maintained by FX Energy for such purpose, without payment of any service charge
except for any tax or governmental charge. Bearer securities will be
transferable only by delivery. FX Energy will describe the specific terms for
the exchange of bearer securities in a prospectus supplement.
FX Energy will pay principal and any premium and interest on registered
securities at the corporate trust office of the trustee or at any other office
or agency maintained by FX Energy for such purpose. FX Energy may choose to make
any interest payment on a registered security:
- by check mailed to the address of the holder as such address shall
appear in the register; or
- if provided in the prospectus supplement, by wire transfer to an account
maintained by the holder as specified in the register.
FX Energy will make interest payments to the person in whose name the debt
security is registered at the close of business on the day specified by FX
Energy.
FX Energy will make no payment of principal, premium or interest on bearer
securities at any of FX Energy's offices or agencies in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
GLOBAL SECURITIES
FX Energy may issue the debt securities in whole or in part in the form of
one or more global securities. A global security is a security, typically held
by a depositary, that represents the beneficial interests of a number of
<PAGE> 19
purchasers of such security. FX Energy may issue the global securities in either
registered or bearer form and in either temporary or permanent form. FX Energy
will deposit global securities with the depositary identified in the prospectus
supplement. Unless it is exchanged in whole or in part for debt securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to certain nominees of the depositary.
FX Energy will describe the specific terms of the depositary arrangement
with respect to a series of debt securities in a prospectus supplement. FX
Energy expects that the following provisions will generally apply to depositary
arrangements.
After FX Energy issues a global security, the depositary will credit on its
book-entry registration and transfer system the respective principal amounts of
the debt securities represented by such global security to the accounts of
persons that have accounts with such depositary ("participants"). The
underwriters or agents participating in the distribution of the debt securities
will designate the accounts to be credited. If FX Energy offers and sells the
debt securities directly or through agents, either FX Energy or FX Energy's
agents will designate the accounts. Ownership of beneficial interests in a
global security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in the global
security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the depositary and its participants.
FX Energy and the trustee will treat the depositary or its nominee as the
sole owner or holder of the debt securities represented by a global security.
Except as set forth below, owners of beneficial interests in a global security
will not be entitled to have the debt securities represented by such global
security registered in their names, will not receive or be entitled to receive
physical delivery of such debt securities in definitive form and will not be
considered the owners or holders of the debt securities. The laws of some states
<PAGE> 20
require that certain purchasers of securities take physical delivery of the
securities. Such laws may impair the ability to transfer beneficial interests in
a global security.
Principal, any premium and any interest payments on debt securities
represented by a global security registered in the name of a depositary or its
nominee will be made to such depositary or its nominee as the registered owner
of such global security.
FX Energy expects that the depositary or its nominee, upon receipt of any
payments, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the global security as shown on the depositary's or its nominee's
records. FX Energy also expects that payments by participants to owners of
beneficial interest in the global security will be governed by standing
instructions and customary practices, as is the case with the securities held
for the accounts of customers registered in "street names," and will be the
responsibility of such participants.
If the depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by FX Energy within
ninety days, FX Energy will issue individual debt securities in exchange for
such global security. In addition, FX Energy may at any time in its sole
discretion determine not to have any of the debt securities of a series continue
to be represented by global securities and, in such event, will issue debt
securities of such series in exchange for such global security.
Neither FX Energy, the trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such global
security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Neither FX Energy, the trustee nor any
<PAGE> 21
paying agent will be liable for any delay by the depositary or any of its
participants in identifying the owners of beneficial interests in a global
security, and FX Energy, the trustee and any paying agent may conclusively rely
on instructions from the depositary or its nominee for all purposes.
SUBORDINATION
Debt securities may be subordinated to Senior Indebtedness to the extent
set forth in the applicable prospectus supplement. FX Energy currently conducts
substantially all its operations through subsidiaries, and subject to the terms
of any guaranty that may be entered into in connection with the issuance of a
series of debt securities, the holders of debt securities, whether or not
subordinated debt securities, will generally have a junior position to the
creditors of FX Energy's subsidiaries.
Under the indenture, payment of the principal, interest and any premium on
the subordinated debt securities will generally be subordinated and junior in
right of payment to the prior payment in full of all debt of FX Energy
designated as "Senior Indebtedness" as provided below. Upon distribution of FX
Energy's assets to FX Energy's creditors or upon the liquidation or dissolution
of FX Energy or in bankruptcy or similar proceedings relating to FX Energy or
its property, holders of FX Energy's Senior Indebtedness will be entitled to
receive payment in full in cash before the holders of the subordinated debt
securities can receive any payment with respect to the subordinated debt
securities. The indenture also provides that no payment of principal, interest
and any premium on the subordinated indebtedness securities may be made in the
event:
- FX Energy fails to pay the principal, interest or any premium on any
Senior Indebtedness within any applicable grace period; or
- any other default on Senior Indebtedness occurs and the maturity of the
Senior Indebtedness is accelerated.
<PAGE> 22
Additionally, if any default on the Senior Indebtedness occurs and the
maturity of the Senior Indebtedness could be accelerated as a result of such
default, then the representatives of the holders of such indebtedness that has
been designated as "Designated Senior Indebtedness" may require that FX Energy
suspend any payment on the subordinated debt securities for a blockage period of
180 days. Not more than one such blockage period may occur in any consecutive
360-day period.
Senior Indebtedness means FX Energy's indebtedness that is designated as
such by FX Energy's board of directors or in a supplemental indenture at the
time that the terms of the subordinated debt are established. The indenture will
not limit the amount of Senior Indebtedness that FX Energy may incur.
By reason of the subordination, in the event of FX Energy's insolvency, FX
Energy's creditors who may also be holders of Senior Indebtedness, as well as
certain general creditors, may recover more, ratably, than the holders of the
subordinated debt securities.
CONSOLIDATION, MERGER OR SALE OF ASSETS
The indenture generally permits a consolidation or merger between FX Energy
and another corporation or other entity. It also permits the sale or lease by FX
Energy of all or substantially all of FX Energy's property and assets. If this
happens, the remaining or acquiring corporation or other entity shall assume all
of FX Energy's responsibilities and liabilities under the indenture including
the payment of all amounts due on the debt securities and performance of the
covenants in the indenture.
FX Energy is only permitted to consolidate or merge with or into any other
entity or sell all or substantially all of FX Energy's assets according to the
terms and conditions of the indenture. The remaining or acquiring entity will be
<PAGE> 23
substituted for FX Energy in the indenture with the same effect as if it had
been an original party to the indenture. Thereafter, the successor entity may
exercise FX Energy's rights and powers under the indenture, in FX Energy's name
or in its own name. Any act or proceeding required or permitted to be done by FX
Energy's board of directors or any of FX Energy's officers may be done by the
board or officers of the successor entity. If FX Energy consolidates or merges
with or into any other entity or sells all or substantially all of FX Energy's
assets, FX Energy shall be released from all FX Energy's liabilities and
obligations under the indenture and under the debt securities.
MODIFICATION OF INDENTURE
FX Energy may modify the indenture, without prior notice to or consent of
any holders, for any of the following purposes:
- to evidence the succession of another person to FX Energy's rights and
the assumption by the successor of FX Energy's covenants and obligations
in the indenture and the debt securities;
- to add to the covenants for the benefit of the holders of the debt
securities or to surrender any right or power conferred upon FX Energy
in the indenture;
- to add any event of default;
- to cure any ambiguity, defect or inconsistency, to secure the debt
securities, or to make any change that does not adversely affect the
rights of any holders;
- to modify or amend the indenture to permit the qualification of the
indenture or any supplemental indenture under the Trust Indenture Act;
- to add to or change any provision of the indenture to provide that
bearer securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal or premium with
respect to registered securities or of principal, premium or interest
with respect to bearer securities, or to permit registered securities to
<PAGE> 24
be exchanged for bearer securities, so long as any such action does not
adversely affect the interests of the holders of debt securities nor
permit or facilitate the issuance of debt securities of any series in
uncertificated form;
- to comply with the provisions of the indenture relating to
consolidations, mergers and sales of assets;
- in the case of subordinated debt securities, to make any change in the
provisions of the indenture relating to subordination that would limit
or terminate the benefits available to any holder of Senior Indebtedness
under such provisions;
- to add guarantees for any or all of the debt securities or to secure any
or all of the debt securities;
- to make any change that does not adversely affect the rights of any
holder;
- to add to, change or eliminate any provision of the indenture, so long
as any such addition, change or elimination does not either apply to any
debt security of any series created prior to the modification that is
entitled to the benefit of the provision or modify the rights of the
holders of any such debt security with respect to the provision or
become effective only when there is no debt security outstanding;
- to evidence and provide for a successor or other trustee with respect to
the debt securities of one or more series and to add to or change any
provision of the indenture to provide for or facilitate the
administration of the indenture by more than one trustee;
- to establish the form or terms of debt securities and coupons of any
series; and
- to provide for uncertificated debt securities in addition to or in place
of certificated debt securities.
FX Energy may modify and amend the indenture with the written consent of at
least a majority in principal amount of the outstanding debt securities of each
series affected by the modifications or amendments; provided, however, that such
<PAGE> 25
modifications may not, without the consent of the holder of each outstanding
debt security of each series affected thereby:
- reduce the percentage in principal amount of debt securities of any
series whose holders must consent to an amendment;
- reduce the rate of or extend the time for payment of interest on any
debt security or coupon or reduce the amount of any payment to be made
with respect to any coupon;
- reduce the principal of or extend the stated maturity of any debt
security;
- reduce the premium payable upon the redemption of any debt security or
change the time at which any debt security may or shall be redeemed;
- make any debt security or coupon payable in a currency other than that
stated in the debt security;
- in the case of any subordinated debt security or related coupons, make
any change in the subordination provisions of the indenture that
adversely affects the rights of any holder under the provisions;
- release any security that may have been granted with respect to the debt
securities;
- impair the right of a holder of debt securities to receive payment of
principal and interest on such holder's debt securities on or after the
due dates therefor or to institute suit for the enforcement of or with
respect to such holder's debt securities;
- make any change in the provisions of the indenture relating to waivers
of defaults or amendments that require unanimous consent;
- change any obligation of FX Energy provided for in the indenture to pay
additional interest with respect to bearer securities; or
- limit the obligation of FX Energy to maintain a paying agency outside
the United States for payment on bearer securities or limit the
obligation of FX Energy to redeem certain bearer securities.
<PAGE> 26
EVENTS OF DEFAULT
"Event of Default," with respect to any series of debt securities, means
any of the following:
- failure to pay interest on any debt security of that series for 30 days;
- failure to pay the principal or any premium on any debt security of that
series when due;
- failure to deposit any sinking fund payment when due;
- failure to comply with the provisions of the indenture relating to
consolidations, mergers and sales of assets;
- failure to perform any other covenant with respect to that series in the
indenture that continues for 90 days after being given written notice;
- certain events in bankruptcy, insolvency or reorganization of FX Energy
or a significant subsidiary that has guaranteed the payment of such
series of debt securities;
- the entry of a judgment in excess of $20 million against FX Energy or
such significant subsidiary which is not covered by insurance and not
discharged, waived or stayed; or
- any other event of default included in the indenture or any supplemental
indenture.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under the indenture.
If an event of default relating to certain events in bankruptcy, insolvency
or reorganization of FX Energy occurs and continues, the entire principal of all
the debt securities of all series will be due and payable immediately. If any
other event of default for any series of debt securities occurs and continues,
the trustee or the holders of at least 25% in aggregate principal amount of the
debt securities of the series may declare the entire principal of all the debt
<PAGE> 27
securities of that series to be due and payable immediately. If this happens,
subject to certain conditions, the holders of a majority of the aggregate
principal amount of the debt securities of that series can void the declaration.
The trustee may withhold notice to the holders of debt securities of any default
(except in the payment of principal or interest or in the making of any sinking
fund payment) if it considers such withholding of notice to be in the interests
of the holders.
Other than its duties in case of a default, a trustee is not obligated to
exercise any of its rights or powers under the indenture at the request, order
or direction of any holders, unless the holders offer the trustee reasonable
indemnity. If they provide this reasonable indemnification, the holders of a
majority in principal amount of any series of debt securities may direct the
time, method and place of conducting any proceeding or any remedy available to
the trustee, or exercising any power conferred upon the trustee, for any series
of debt securities.
No holder of any debt security can institute any action or proceeding with
respect to the indenture unless the holder gives written notice of an event of
default to the trustee, the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of the applicable series shall have
requested the trustee to institute the action or proceeding and has
appropriately indemnified the trustee, and the trustee has failed to institute
the action or proceeding within a specified time period.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
Discharge.
With certain exceptions, FX Energy will be discharged from its obligations
under the indenture with respect to any series of debt securities either by
paying the principal and any premium and interest on all of the outstanding debt
<PAGE> 28
securities of such series when due and payable or by delivering to the trustee
all outstanding debt securities of such series for cancellation.
Legal Defeasance.
FX Energy may be discharged from FX Energy's obligations on the debt
securities of any series at any time if FX Energy deposits with the trustee
sufficient cash or government obligations to pay the principal and any premium
and interest on the debt securities of that series to the stated maturity date
or a redemption date for the debt securities of that series. If that happens,
payment of the debt securities of such series may not be accelerated because of
an event specified as an event of default with respect to such debt securities,
and the holders of the debt securities of such series will not be entitled to
the benefits of the indenture, except for registration of transfer and exchange
of debt securities and replacement of lost, stolen or mutilated debt securities.
FX Energy may be discharged only if, among other things, FX Energy has
delivered to the trustee an opinion of counsel stating that FX Energy has
received from the United States Internal Revenue Service a ruling or, since the
date of execution of the indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that the holders of the
debt securities of that series will not recognize income, gain or loss for
federal income tax purposes as a result of the defeasance.
Covenant Defeasance.
FX Energy may omit to comply with certain restrictive covenants contained
in the indenture and any omission to comply with those covenants will not
constitute a default or event of default with respect to the debt securities of
any series. FX Energy may omit to comply with such covenants only if, among
other things:
<PAGE> 29
- FX Energy deposits with the trustee sufficient cash or government
obligations to pay the principal and any premium and interest on the
debt securities of that series to the stated maturity date or a
redemption date for the debt securities of that series; and
- FX Energy delivers to the trustee an opinion of counsel to the effect
that the holders of the debt securities of the series will not recognize
income, gain or loss for federal income tax purposes as a result of the
covenant defeasance.
Effect of Discharge and Defeasance.
Under federal income tax law as of the date of this prospectus, a discharge
may be treated as an exchange of the related debt securities. Each holder might
be required to recognize gain or loss equal to the difference between the
holder's cost or other tax basis for the debt securities and the value of the
holder's interest in the trust. Holders might be required to include as income a
different amount than would be included without the discharge. Prospective
investors are urged to consult their own tax advisors as to the tax consequences
of a discharge, including the applicability and effect of tax laws other than
the federal income tax law.
THE TRUSTEE
FX Energy may appoint a separate trustee for any series of debt securities.
FX Energy may maintain banking and other commercial relationships with the
trustee and its affiliates in the ordinary course of business, and the trustee
may own debt securities and serve as trustee under FX Energy's other indentures.
GOVERNING LAW
The indenture and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 30
DESCRIPTION OF CAPITAL STOCK
FX Energy is authorized to issue 30,000,000 shares of common stock, $0.001
par value; and 5,000,000 shares of preferred stock (including 500,000 shares of
Series A Preferred Stock), $0.001 par value.
COMMON STOCK
As of June 1, 1999, FX Energy had 14,847,003 shares of common stock issued
and outstanding. The holders of common stock are entitled to one vote per share
on each matter submitted to a vote at any meeting of stockholders. Holders of
common stock do not have cumulative voting rights, and therefore, a majority of
the outstanding shares voting at a meeting of stockholders is able to elect the
entire board of directors, and if they do so, minority stockholders would not be
able to elect any members to the board of directors. FX Energy's bylaws provide
that a majority of the issued and outstanding shares of FX Energy constitutes a
quorum for stockholders' meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute.
Stockholders of FX Energy have no preemptive rights to acquire additional
shares of common stock or other securities. The common stock is not subject to
redemption and carries no subscription or conversion rights. In the event of
liquidation of FX Energy, the shares of common stock are entitled to share
equally in corporate assets after satisfaction of all liabilities and the
payment of any liquidation preferences.
Holders of common stock are entitled to receive such dividends as the board
of directors may from time to time declare out of funds legally available for
the payment of dividends. FX Energy seeks growth and expansion of its business
through the reinvestment of profits, if any, and does not anticipate that it
<PAGE> 31
will pay dividends on the common stock in the foreseeable future. In certain
cases, common stockholders may not receive dividends, if and when declared by
the board of directors, until FX Energy has satisfied its obligations to any
preferred stockholders. Certain of FX Energy's debt may restrict the payment of
dividends.
As of June 1, 1999, FX Energy had reserved for issuance on exercise of
options and warrants at exercise prices ranging from $1.50 to $10.25 an
aggregate of 3,684,239 shares of common stock consisting of 2,599,584 shares
issuable on the exercise of outstanding options and warrants with a weighted
average exercise price of $4.42 per share, and 1,084,655 shares issuable on the
exercise of options previously granted but not yet exercisable at a weighted
exercise price of $6.97 per share.
The board of directors has authority to authorize the offer and sale of
additional securities without the vote of or notice to existing shareholders,
and it is likely that additional securities will be issued to provide future
financing. The issuance of additional securities could dilute the percentage
interest and per share book value of existing shareholders, including persons
purchasing common stock in this offering.
PREFERRED STOCK
Under FX Energy's Articles of Incorporation, FX Energy's board of directors
is authorized, without shareholder action, to issue preferred stock in one or
more series and to fix the number of shares and rights, preferences and
limitations of each series. Among the specific matters that may be determined
by the board of directors are the dividend rate, the redemption price, if any,
conversion rights, if any, the amount payable in the event of any voluntary
liquidation or dissolution of FX Energy and voting rights, if any. If FX Energy
offers preferred stock, the specific designations and rights will be described
in the prospectus supplement.
<PAGE> 32
Series A Preferred Stock
FX Energy is authorized to issue 500,000 shares of Series A Preferred
Stock. Such preferred stock is non-redeemable and subordinate to any other
series of FX Energy's Preferred Stock which may at any time be issued (FX Energy
currently does not have any Preferred Stock outstanding). The Series A
Preferred Stock is authorized for issuance pursuant to the preferred stock
purchase rights that trade with the common stock, as described below. Each
share of Series A Preferred Stock is entitled to receive, when, as and if
declared, a dividend in an amount equal to one hundred times the cash dividend
declared on each share of common stock and one hundred times any non-cash
dividends declared with respect to each share of common stock, in like kind,
other than a dividend payable in shares of common stock. In the event of
liquidation, the holder of each share of Series A Preferred Stock shall be
entitled to receive a liquidation payment in an amount equal to one hundred
times the liquidation payment made per common share of FX Energy. Each share of
Series A Preferred Stock has one hundred votes, voting together with the common
stock and not as a separate class, unless otherwise required by law or FX
Energy's articles of incorporation. In the event of any merger, consolidation
or other transaction in which shares of common stock of FX Energy are exchanged,
each share of Series A Preferred Stock is entitled to receive one hundred times
the amount received per share of common stock of FX Energy.
Each share of common stock includes one right (a "Right") which entitles
the registered holder to purchase from FX Energy one one-hundredth (1/100) of a
share of Series A Preferred Stock at an exercise price of $100 per Right,
subject to adjustment to prevent dilution. Initially the Rights will not be
exercisable, certificates for the Rights will not be issued and, unless and
until the Rights become exercisable, they will be transferred with and only with
the shares of common stock. The Rights are exercisable on the Separation Date,
which will occur on the earlier of (i) ten calendar days following a public
<PAGE> 33
announcement that certain persons or groups have acquired 20% or more of the
outstanding voting shares of FX Energy, (ii) ten calendar days following the
commencement or public announcement of the intent of any person to acquire 20%
or more of the outstanding voting shares of FX Energy; or (iii) such later date
as may be fixed by the board of directors. Following the Separation Date,
certificates representing the Rights will be mailed to holders of record of
common stock and thereafter such certificates alone will evidence the rights.
If any person acquires more than 20% of the outstanding common stock or FX
Energy engages in certain business combinations, other than pursuant to a tender
or exchange offering for all shares of common stock approved by the board of
directors, the Rights become exercisable for common stock, in lieu of Series A
Preferred Stock, by paying one-half of the exercise price of the Right for a
number of shares of common stock of FX Energy having an aggregate market price
equal to such exercise price. Any Rights that are or were beneficially owned by
a person who has acquired 20% or more of the outstanding common stock will
become void.
FX Energy may redeem the Rights at $.01 per Right at any time until ten
business days after public announcement that a person has acquired 20% or more
of the outstanding shares of common stock, provided that the redemption is
approved by FX Energy's Rights Redemption Committee, a committee consisting of
at least three continuing directors, a majority of whom are not employees of FX
Energy. The Rights will expire on the tenth anniversary after adoption of the
Rights by the board of directors unless earlier redeemed by FX Energy. Unless
the Rights have been previously redeemed, all shares of common stock issued by
FX Energy will include Rights. As long as the Rights are redeemable, the Rights
Redemption Committee, without further shareholder approval may, except with
respect to the exercise price or expiration date of the Rights, amend the Rights
in any matter that, in the opinion of the board of directors, does not
materially adversely affect the interests of holders of the Rights.
<PAGE> 34
CERTAIN ARTICLE AND BYLAW PROVISIONS
FX Energy's Articles of Incorporation divide the members of the board of
directors into three classes of directors, with each class to be as nearly equal
in number of directors as possible, serving staggered, three-year terms. FX
Energy's Articles of Incorporation also provide that directors may be removed,
with or without cause, by a two-thirds majority of the shareholders at a meeting
called for that purpose and that any resulting vacancies can be filled by only a
vote of a majority of the directors remaining in office.
FX Energy's bylaws permit stockholders to nominate a person for election as
a director or bring other matters before a stockholder meeting only if written
notice of such intent is provided to FX Energy at least 30 days prior to the
meeting. Such notice of intent to nominate a person for election as a director
is required to set forth the same kind of information respecting such nominee as
would be required under the proxy rules of the SEC, including the written
consent of the nominee to serve as a director, if elected, and the name and
address of the stockholder making the nomination as well as the number of shares
of stock owned by such stockholder. In the case of other proposed business, the
notice must set forth a brief description of each matter proposed, the name and
address of the stockholder proposing the matter, the number of shares of stock
owned by such stockholder and any material interest of such stockholder in such
matter.
Nevada law provides that a merger or consolidation, sale or similar
transaction involving all or substantially all of FX Energy's assets, the
issuance of securities having an aggregate value equal to 5% or more of the
aggregate market of all outstanding shares of the corporation or the
reclassification, recapitalization or similar transaction involving an
"interested stockholder" (as defined), within three years after the stockholder
became interested, cannot be completed unless such transaction is approved by
<PAGE> 35
the board of directors of FX Energy. After the expiration of three years after
a person becomes an interested stockholder, a transaction cannot be completed
with the interested stockholder unless it is approved by the board of directors
or a majority of the outstanding voting power not beneficially owned by the
interested stockholder, unless certain "fair price" provisions are met. Such
fair price provisions generally require that the amount of cash and the market
value of the consideration of the cash to be received per share by all holders
of the outstanding common stock of FX Energy not beneficially owned by the
interested stockholder be at least equal to the higher of the price per share
paid by the interested stockholder or the market value on the date of
announcement of the proposed combination. For purposes of these provisions, an
interested stockholder is one who beneficially owns, directly or indirectly, 10%
or more of the voting power of the outstanding stock of the corporation.
The foregoing provisions may tend to deter any potential unfriendly offers
or other efforts to obtain control of FX Energy that are not approved by the
board of directors and thereby deprive the stockholders of opportunities to sell
shares of common stock at prices higher than the prevailing market price. On
the other hand, these provisions may tend to assure continuity of management and
corporate policies and to induce any person seeking control of FX Energy or a
business combination with FX Energy to negotiate on terms acceptable to the then
elected board of directors.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
FX Energy may, at FX Energy's option, elect to offer fractional shares of
serial preferred stock, rather than full shares of serial preferred stock. If FX
Energy offers fractional shares, FX Energy will issue to the public receipts for
depositary shares, and each of these depositary shares will represent a fraction
<PAGE> 36
of a share of a particular series of preferred stock. FX Energy will specify
that fraction in the prospectus supplement.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between FX Energy and a
depositary selected by FX Energy. The depositary will be a bank or trust company
and will have its principal office in the United States and a combined capital
and surplus of at least $50 million. Subject to the terms of the deposit
agreement, each owner of a depositary share will be entitled, in proportion to
the applicable fractional interest in shares of preferred stock underlying that
depositary share, to all the rights and preferences of the preferred stock
underlying that depositary share. Those rights include dividend, voting,
redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued under
the deposit agreement. FX Energy will issue depositary receipts to those persons
who purchase the fractional interests in the preferred stock underlying the
depositary shares, in accordance with the terms of the offering.
The following summary of the deposit agreement, the depositary shares and
the depositary receipts is not complete. You should refer to the forms of the
deposit agreement and depositary receipts that are filed as exhibits to the
registration statement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of related depositary shares in proportion to the number of depositary shares
owned by those holders.
<PAGE> 37
If FX Energy makes a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with FX Energy's approval, sell the property and distribute the net
proceeds from the sale to the applicable holders.
REDEMPTION OF DEPOSITARY SHARES
Whenever FX Energy redeems shares of preferred stock that are held by the
depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing the shares of preferred stock so
redeemed. The redemption price per depositary share will be equal to the
applicable fraction of the redemption price per share payable with respect to
that series of the preferred stock. If fewer than all the depositary shares are
to be redeemed, the depositary will select the depositary shares to be redeemed
by lot or pro rata as determined by the depositary.
Depositary shares called for redemption will no longer be outstanding after
the applicable redemption date, and all rights of the holders of those
depositary shares will cease, except the right to receive any money, securities,
or other property upon surrender to the depositary of the depositary receipts
evidencing those depositary shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the depositary shares
underlying that preferred stock. Each record holder of those depositary shares
on the record date (which will be the same date as the record date for the
preferred stock) will be entitled to instruct the depositary as to the exercise
<PAGE> 38
of the voting rights pertaining to the amount of the preferred stock underlying
that holder's depositary shares. The depositary will try, as far as practicable,
to vote the number of shares of preferred stock underlying those depositary
shares in accordance with those instructions, and FX Energy will agree to take
all action which the depositary deems necessary in order to enable the
depositary to do so. The depositary will not vote the shares of preferred stock
to the extent it does not receive specific instructions from the holders of
depositary shares underlying the preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
FX Energy and the depositary may amend the form of depositary receipt
evidencing the depositary shares and any provision of the deposit agreement at
any time. However, any amendment that materially and adversely alters the rights
of the holders of depositary shares will not be effective unless the amendment
has been approved by the holders of at least a majority of the depositary shares
then outstanding. The deposit agreement may be terminated by FX Energy or by the
depositary only if:
- all outstanding depositary shares have been redeemed; or
- there has been a final distribution of the underlying preferred stock in
connection with FX Energy's liquidation, dissolution or winding up and
the preferred stock has been distributed to the holders of depositary
receipts.
CHARGES OF DEPOSITARY
FX Energy will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. FX Energy will
also pay charges of the depositary in connection with the initial deposit of the
preferred stock and any redemption of the preferred stock. Holders of depositary
receipts will be required to pay transfer and other taxes and governmental
<PAGE> 39
charges and such other charges as are expressly provided in the deposit
agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering a notice to FX Energy
of its election to do so. FX Energy may remove the depositary at any time. Any
such resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of its appointment. FX Energy must appoint a
successor depositary within 60 days after delivery of the notice of resignation
or removal. The successor depositary must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50 million.
MISCELLANEOUS
The depositary will be required to forward to holders of depositary
receipts all reports and communications from FX Energy that FX Energy delivers
to the depositary and that FX Energy is required to furnish to the holders of
the preferred stock.
<PAGE> 40
Neither FX Energy nor the depositary will be liable if either is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the deposit agreement. FX Energy's obligations and those of
the depositary will be limited to performing in good faith their respective
duties under the deposit agreement. Neither FX Energy nor the depositary will be
obligated to prosecute or defend any legal proceeding relating to any depositary
shares or preferred stock unless satisfactory indemnity is furnished. FX Energy
and the depositary may rely upon written advice of counsel or accountants, or
upon information provided by persons presenting preferred stock for deposit,
holders of depositary receipts or other persons they believe to be competent and
on documents they believe to be genuine.
DESCRIPTION OF WARRANTS
FX Energy may issue warrants to purchase debt securities ("debt warrants"),
preferred stock ("preferred stock warrants"), or common stock ("common stock
warrants," and collectively with the preferred stock warrants, the "stock
warrants"). FX Energy may issue warrants independently or together with any
other securities FX Energy offers pursuant to a prospectus supplement and the
warrants may be attached to or separate from the securities. FX Energy will
issue each series of warrants under a separate warrant agreement that FX Energy
will enter into with a bank or trust company, as warrant agent. FX Energy will
describe additional terms of the warrants and the applicable warrant agreements
in the applicable prospectus supplement.
DEBT WARRANTS
FX Energy will describe in the applicable prospectus supplement the terms
of the debt warrants being offered, the warrant agreement relating to the debt
warrants and the debt warrant certificates representing the debt warrants, which
may include the following:
<PAGE> 41
- title of the debt warrants;
- price or prices at which the debt warrants will be issued;
- aggregate number of the debt warrants;
- the designation and terms of the debt securities purchasable upon
exercise of the debt warrants, and the procedures and conditions
relating to the exercise of the debt warrants;
- the designation and terms of any related debt securities with which the
debt warrants are issued, and the number of the debt warrants issued
with each security;
- the date, if any, on and after which the debt warrants and the related
debt securities will be separately transferable;
- the principal amount of debt securities purchasable upon exercise of
each debt warrant, and the price at which the principal amount of the
debt securities may be purchased upon exercise;
- the date on which the right to exercise the debt warrants will commence
and the date on which the right will expire;
- the maximum or minimum number of the debt warrants that may be exercised
at any time;
- whether the debt warrants represented by the debt warrant certificates
or debt securities that may be issued upon exercise of the debt warrants
will be issued in registered or bearer form;
- information with respect to book-entry procedures, if any;
- the currency or currency units in which the offering price, if any, and
the exercise price are payable;
- a discussion of the material United States federal income tax
considerations applicable to the exercise of the debt warrants;
- the antidilution provisions of the debt warrants, if any;
- the redemption or call provisions, if any, applicable to the debt
warrants; and
- any other terms of the debt warrants, including terms, procedures and
limitations relating to the exercise of the debt warrants.
<PAGE> 42
Holders may exchange debt warrant certificates for new debt warrant
certificates of different denominations, and may exercise debt warrants at the
corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement. Prior to the exercise of their debt warrants,
holders of debt warrants will not have any of the rights of holders of the
securities purchasable upon the exercise and will not be entitled to payments of
principal, premium or interest on the securities purchasable upon the exercise.
STOCK WARRANTS
FX Energy will describe in the applicable prospectus supplement the terms
of the preferred stock warrants or common stock warrants being offered, which
may include the following:
- title of the warrants;
- price or prices at which the warrants will be issued;
- aggregate number of the warrants issued;
- the designation and terms of the preferred stock or common stock for
which the warrants are exercisable;
- if applicable, the designation and terms of the preferred stock or
common stock with which the warrants are issued and the number of the
warrants issued with each share of preferred stock or common stock;
- if applicable, the date on and after which the warrants and the related
preferred stock or common stock will be separately transferable;
- the number of shares of preferred stock or common stock purchasable upon
exercise of the warrants and the exercise price of the warrants;
- the date on which the right to exercise the warrants will commence, and
the date on which the right will expire;
- the maximum or minimum number of the warrants which may be exercised at
any time;
- the currency or currency units in which the offering price, if any, and
the exercise price are payable;
<PAGE> 43
- if applicable, a discussion of the material United States federal income
tax considerations applicable to the exercise of the warrants;
- any antidilution provisions of the warrants;
- any redemption or call provisions applicable to the warrants; and
- any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of the warrant to purchase for cash at
the exercise price set forth in the applicable prospectus supplement the
principal amount of debt securities or shares of preferred stock or common stock
being offered. Holders may exercise warrants at any time up to the close of
business on the expiration date set forth in the applicable prospectus
supplement. After the close of business on the expiration date, unexercised
warrants are void.
Holders may exercise warrants as set forth in the prospectus supplement
relating to the warrants being offered. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the prospectus supplement,
FX Energy will, as soon as practicable, forward the debt securities or shares of
preferred stock or common stock purchasable upon the exercise of the warrant. If
less than all of the warrants represented by the warrant certificate are
exercised, FX Energy will issue a new warrant certificate for the remaining
warrants.
DESCRIPTION OF GUARANTEES
FX Energy may issue guarantees in connection with debt securities offered
by any prospectus supplement. The following summary of certain provisions of the
guarantees does not purport to be complete and is subject to, and qualified in
<PAGE> 44
its entirety by reference to, the provisions of the form of guaranty that will
be filed with the SEC in connection with the offering of guarantees. Each
guarantee will be issued pursuant to the indenture. The prospectus supplement
for a particular issue of debt securities will describe the terms of the related
guarantees, including the following:
- series of debt securities to which the guarantees apply;
- whether the guarantees are secured or unsecured;
- whether the guarantees are conditional or unconditional;
- whether the guarantees are senior or subordinate to other guarantees or
debt;
- the terms under which the guarantees may be amended, modified, waived,
released or otherwise terminated, if different from the provisions
applicable to the guaranteed debt securities; and
- any additional terms of the guarantees.
PLAN OF DISTRIBUTION
FX Energy may sell the offered securities within or outside the United
States:
- through agents;
- through underwriters or dealers;
- directly to one or more purchasers; or
- through a combination of any such methods of sale.
BY AGENTS
Offered securities may be sold through agents designated by FX Energy.
Unless otherwise indicated in the prospectus supplement, the agents will act on
a best efforts basis to solicit purchases for the period of their appointment.
<PAGE> 45
BY UNDERWRITERS OR DEALERS
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities will be
subject to certain conditions. Unless otherwise indicated in the prospectus
supplement, the underwriters will be obligated to purchase all the securities of
the series offered if any of the securities are purchased. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
FX Energy may also sell the offered securities pursuant to one or more
standby agreements with one or more underwriters in connection with the call,
redemption or exchange of a specified class or series of any securities of FX
Energy. In a standby agreement, the underwriter or underwriters would agree
either:
- to purchase from FX Energy up to the number of shares of common stock
that would be issuable upon conversion or exchange of all the shares of
the class or series of securities of FX Energy at an agreed price per
share of common stock; or
- to purchase from FX Energy up to a specified dollar amount of offered
securities at an agreed price per offered security, which price may be
fixed or may be established by formula or other method and which may or
may not relate to market prices of the common stock or any other
security of FX Energy then outstanding.
The underwriter or underwriters would also agree, if applicable, to convert
or exchange any securities of the class or series held or purchased by the
underwriter or underwriters into or for common stock or other security of FX
<PAGE> 46
Energy. The underwriter or underwriters may assist in the solicitation of
conversions or exchanges by holders of the class or series of securities.
If dealers are used in the sale of offered securities with respect to which
this prospectus is delivered, FX Energy will sell the offered securities to the
dealers as principals. The dealers may then resell the offered securities to the
public at varying prices to be determined by the dealers at the time of resale.
The names of the dealers and the terms of the transaction will be set forth in
the prospectus supplement thereto.
DIRECT SALES; RIGHTS OFFERINGS
Offered securities may also be sold directly by FX Energy. In this case, no
underwriters or agents would be involved. FX Energy may sell offered securities
upon the exercise of rights which may be issued to FX Energy's securityholders.
<PAGE> 47
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be underwriters as defined in the Securities Act of
1933, and any discounts or commissions received by them from FX Energy and any
profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Securities Act of 1933. Any
underwriters or agents will be identified and their compensation described in a
prospectus supplement.
Representatives of the underwriters through whom the offered securities are
sold for public offering and sale may engage in over-allotment, stabilizing
transactions, syndicate short covering transactions and penalty bids in
accordance with Regulation M under the Securities Exchange Act of 1934.
Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position. Stabilizing transactions permit bids
to purchase the offered securities so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
offered securities in the open market after the distribution has been completed
in order to cover syndicate short positions. Penalty bids permit the
representative of the underwriters to reclaim a selling concession from a
syndicate member when the offered securities originally sold by such syndicate
member are purchased in a syndicate covering transaction to cover syndicate
short positions. Such stabilizing transactions, syndicate covering transactions
and penalty bids may cause the price of the offered securities to be higher than
it would otherwise be in the absence of such transactions. These transactions
may be effected on a national securities exchange and, if commenced, may be
discontinued at any time.
FX Energy may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
<PAGE> 48
the Securities Act of 1933, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, FX Energy or FX Energy's subsidiaries in the ordinary
course of their businesses.
The offered securities may or may not be listed on a national securities
exchange. Any underwriters or agents to or through whom the offered securities
are sold for public offering and sale may make a market in such offered
securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurances can
be given that there will be a market for the offered securities.
LEGAL MATTERS
FX Energy's legal counsel, Kruse, Landa & Maycock, L.L.C., Salt Lake City,
Utah, or another counsel named in the prospectus supplement, will pass upon
certain legal matters in connection with the offered securities. Any
underwriters will be advised about issues relating to any offering by their own
legal counsel.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of Pricewaterhouse-
Coopers LLP, independent accountants, given on the authority of said firm as
experts in accounting and auditing.
<PAGE> 49
The year end independent reserve report dated December 31, 1998,
incorporated by reference into this Prospectus by reference from FX Energy's
Annual Report on Form 10-K for the year ended December 31, 1998, has been
prepared by Larry D. Krause, Billings, Montana, as stated in his report, which
is incorporated by reference and has been so incorporated by reference in
reliance and upon such report given on the authority of that firm as experts in
oil and gas engineering.
<PAGE> 50
- -----------------------------------
TABLE OF CONTENTS
- ----------------------------------- FX ENERGY, INC.
SECTION PAGE
- --------------------- ----
ABOUT THIS PROSPECTUS.............7
SUMMARY 9 $100,000,000
WHERE YOU CAN FIND MORE INFORMATION
...............................12
USE OF PROCEEDS..................13 DEBT SECURITIES
RATIOS OF EARNINGS TO FIXED CHARGES COMMON STOCK
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
PREFERRED.STOCK.DIVIDENDS.......14 DEPOSITARY SHARES
DESCRIPTION OF DEBT SECURITIES...15 WARRANTS
DESCRIPTION OF CAPITAL STOCK.....31 GUARANTEES OF DEBT SECURITIES
DESCRIPTION OF DEPOSITARY SHARES.36
DESCRIPTION OF WARRANTS..........41
DESCRIPTION OF GUARANTEES........44
GENERAL INFORMATION..............48
LEGAL MATTERS....................49
EXPERTS..........................49
<PAGE> 51
Investors should rely on the PROSPECTUS
information contained in this
prospectus. FX Energy has not
authorized anyone to provide
different information. This JUNE 11, 1999
Prospectus does not constitute an
offer to sell or the solicitation of
an offer to buy any securities covered
by this Prospectus in any state or
other jurisdiction to any person to
whom it is unlawful to make such offer
or soliciation in such state or
jurisdiction.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
-------------------------------------------------------
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
-------------------------------------------------------
The following are the estimated expenses in connection with the
distribution of the securities being registered:
Securities and Exchange Commission registration fee.. $ 27,800
Legal fees........................................... 125,000
State "blue sky" fees and expenses (including
attorneys' fees)..................................... 5,000
Accounting fees and expenses......................... 50,000
Transfer agent fees and expenses..................... 10,000
Printing and engraving expenses...................... 35,000
Listing fees......................................... 17,500
Miscellaneous........................................ 9,700
-----------
Total $ 280,000
===========
<PAGE> 52
All expenses, except the SEC registration fee, are estimates.
<PAGE> 53
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.037 and 78.751 of the Nevada Revised Statutes and "ARTICLE VII.
INDEMNIFICATION OF DIRECTORS AND OFFICERS" of the Registrant's articles of
incorporation provide for indemnification of the Registrant's directors and
officers and the limitation of liability thereon in a variety of circumstances,
which may include liabilities under the Securities Act of 1933, as amended.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons pursuant to the
foregoing provisions, the Registrant has been informed that in the opinion of
the SEC such indemnification is contrary to public policy as expressed in the
Securities Act and, therefore, is unenforceable. (See "ITEM 17.
UNDERTAKINGS.")
ITEM 16. EXHIBITS
The following documents are included as exhibits to this Registration
Statement, pursuant to item 601 of regulation S-K.
<PAGE> 54
<TABLE>
<S> <C> <C> <C>
SEC
EXHIBIT REFERENCE
NUMBER NUMBER TITLE OF DOCUMENT LOCATION
- ------- --------- ---------------------------------------- --------------
ITEM 1. UNDERWRITING AGREEMENT
- --------------------------------------------------------
1.1 1 Form of Underwriting Agreement To be filed *
ITEM 4. INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS
- --------------------------------------------------------
4.1 4 Form of Designation of Rights, Incorporated by
Privileges, and Preferences of Series A Reference(1)
Preferred Stock
4.2 4 Form of Rights Agreement dated as of Incorporated by
April 4, 1997, between FX Energy and Reference(1)
Fidelity Transfer Corp.
4.3 4 Form of Indenture between FX Energy and This Filing
one or more commercial banks, as trustee
4.4 4 Form of Senior Debt Security To be filed *
4.5 4 Form of Subordinated Debt Security To be filed *
4.6 4 Form of Deposit Agreement To be filed *
4.7 4 Form of Depositary Receipt To be filed *
4.8 4 Form of Warrant Agreement To be filed *
4.9 4 Form of Warrant Certificate To be filed *
4.10 4 Form of Guaranty To be filed *
ITEM 5. OPINION RE: LEGALITY
- --------------------------------------------------------
5.1 5 Opinion of Kruse, Landa & Maycock, LLC, as This Filing
to the legality of the securities to be
registered
ITEM 12. COMPUTATION OF RATIOS OF EARNINGS
- --------------------------------------------------------
<PAGE> 55
12.1 12 Computation of Ratios of Earnings to Fixed This Filing
Charges and Earnings to Fixed Charges and
Preferred Stock Dividends
ITEM 23. CONSENTS OF EXPERTS AND COUNSEL
- --------------------------------------------------------
23.1 23 Consent of PricewaterhouseCoopers LLP, This Filing
independent accountants
23.2 23 Consent of Larry D. Krause, Petroleum This Filing
Engineer
23.3 23 Consent of Kruse, Landa & Maycock, LLC Included in
Exhibit 5.1
ITEM 24. POWER OF ATTORNEY
- --------------------------------------------------------
24.1 24 Power of Attorney Signature Page
ITEM 25. STATEMENT OF ELIGIBILITY OF TRUSTEE
- --------------------------------------------------------
25.1 25 Form T-1 Statement for Eligibility under To be filed *
Trust Indenture Act of 1939 of Trustee
- -----------------
* To be filed in an exhibit to this registration statement or as an exhibit to
a current report on Form 8-K.
(1)Incorporated by reference from the report on Form 8-K dated April 4, 1997.
<PAGE> 56
ITEM 17. UNDERTAKINGS
RULE 415 OFFERINGS: POST-EFFECTIVE AMENDMENTS. [Regulation S-K, Item 512(a)]
The undersigned Registrant will:
(1) File, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE [Regulation
S-K, Item 512(b)]
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
<PAGE> 57
INCORPORATED ANNUAL AND QUARTERLY REPORTS [Regulation S-K, Item 512(e)]
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide interim financial information required to
be presented Article 3 of Regulation S-X.
INDEMNIFICATION. [Regulation S-K, Item 512(h)]
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer, or controlling person of the registrant in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE> 58
ELIGIBILITY OF TRUSTEE [Regulation S-K, Item 512(j)]
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the SEC under section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Salt Lake City, state of Utah, on the 11th day of
June 1999.
FX ENERGY, INC.
(Registrant)
By /s/ David N. Pierce, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David N. Pierce and Andrew W. Pierce, and each of
them, with power of substitution, as his attorney-in-fact for him, in all
capacities, to sign any amendments to this Registration Statement and to file
the same with exhibits thereto and other documents in connection therewith, with
<PAGE> 59
the SEC, hereby ratifying and confirming all that said attorney-in-fact or his
substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated on the 11th day of June 1999.
/s/ David N. Pierce, Director and
President
(Principal Executive and Financial
Officer)
/s/ Andrew W. Pierce, Director
Jerzy B. Maciolek, Director
/s/ Thomas B. Lovejoy, Director
/s/ Peter Raven, Director
Jay W. Decker, Director
/s/ Scott J. Duncan, Director
/s/ Dennis L. Tatum, Treasurer
(Principal Accounting Officer)
</TABLE>
EXHIBIT 5.1
KRUSE, LANDA & MAYCOCK, L.L.C.
EIGHTH FLOOR, BANK ONE TOWER
50 WEST BROADWAY (300 SOUTH)
SALT LAKE CITY, UTAH 84101-2034
JAMES R. KRUSE TELEPHONE: (801) 531-7090
ELLEN MAYCOCK TELECOPY: (801) 531-7091
DAVID R. KING MAILING ADDRESS (801) 359-3954
KEITH L. POPE Post Office Box 45561
LYNDON L. RICKS Salt Lake City, Utah 84145-0561 www.klmlaw.com
JODY L. WILLIAMS
STEVEN G. LOOSLE
RICHARD C. TAGGART
DAVID C. WRIGHT
PAMELA S. NIGHSWONGER Of Counsel
SHANE L. HANNA HOWARD S. LANDA
June 11, 1999
FX Energy, Inc.
3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Re: Registration Statement on Form S-3
" Debt Securities
" Common Stock, par value $0.001 per share
" Preferred Stock, par value $0.001 per share
" Depositary Shares
" Warrants
" Guarantees of Debt Securities
Ladies and Gentlemen:
We have acted as counsel for FX Energy, Inc., a Nevada corporation (the
"Company"), in connection with the registration under the Securities Act of 1933
(the "Securities Act"), on a Registration Statement on Form S-3 (the
"Registration Statement") of the offer and sale from time to time pursuant to
Rule 415 under the Securities Act of the following securities for an aggregate
initial offering price not to exceed $100,000,000: (i) debt securities of the
Company ("Debt Securities"); (ii) shares of common stock, par value $0.001 per
share, of the Company ("Common Stock"); (iii) shares of preferred stock, par
value $0.001 per share, of the Company ("Preferred Stock"); (iv) depositary
shares representing fractional interests in Preferred Stock ("Depositary
Shares");(v) warrants to purchase Debt Securities, Preferred Stock or Common
Stock (the "Warrants"); and (vi) guarantees of Debt Securities (the "Guarantees"
and, together with the Debt Securities, Preferred Stock, Depositary Shares,
Common Stock and Warrants, the "Securities").
For purposes of rendering the opinions contained in this letter, we have
reviewed those agreements, records and documents as we have deemed relevant in
order to render the opinions set forth herein, including (a) the articles of
incorporation and the bylaws of the Company in effect as of the date hereof,
and (b) the Indenture in the form of Exhibit 4.3 to the Registration Statement
to be executed by the Company and the trustee (the "Indenture"), pursuant to
which Debt Securities may be issued.
<PAGE> 1
As to certain questions of fact material to our opinions that we have not
independently established, we have relied upon certificates from officers of the
Company and upon certificates of public officials.
In rendering the following opinions, we have assumed (a) all information
contained in all documents reviewed by us is true and correct, (b) the
genuineness of all signatures on all documents reviewed by us, (c) the
authenticity and completeness of all documents submitted to us as originals, (d)
the conformity to authentic originals of all documents submitted to us as
certified or photostatic copies, (e) each natural person signing any document
reviewed by us had the legal capacity to do so, and (f) each person signing in a
representative capacity any document reviewed by us had authority to sign in
such capacity.
Based on the foregoing, and subject to the assumptions, exceptions and
qualifications stated below, we are of the opinion that:
1. With respect to Debt Securities to be issued under the Indenture, when
(a) the Indenture has been duly authorized and validly executed and delivered by
the Company to the trustee, (b) the Indenture has been duly qualified under the
Trust Indenture Act of 1939, (c) the Company's Board of Directors (the "Board")
has taken all necessary corporate action to approve the issuance and terms of
such Debt Securities, the terms of the offering thereof and related matters, and
(d) such Debt Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Indenture and the applicable
definitive purchase, underwriting or similar agreement approved by the Board
upon payment of the consideration therefor provided for therein, such Debt
Securities will be legally issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
<PAGE> 2
2. With respect to shares of Common Stock, when both (a) the Board has
taken all necessary corporate action to approve the issuance of and the terms of
the offering of the shares of Common Stock and related matters and (b)
certificates representing the shares of Common Stock have been duly executed,
countersigned, registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Company's Board upon payment of the consideration therefor (not less than
the par value of the Common Stock) provided for therein or (ii) upon conversion
or exercise of any other Security, in accordance with the terms of such Security
or the instrument governing such Security providing for such conversion or
exercise as approved by the Board, for the consideration approved by the Board
(not less than the par value of the Common Stock), then the shares of Common
Stock will be legally issued, fully paid and nonassessable.
3. With respect to shares of Preferred Stock, when both (a) the Board has
taken all necessary corporate action to approve the issuance and terms of the
shares of Preferred Stock, the terms of the offering thereof, and related
matters, including the adoption of a Designation of Rights, Privileges and
Preferences relating to such Preferred Stock (a "Designation") and the filing
of the Designation with the Secretary of State of the State of Nevada, and (b)
certificates representing the shares of Preferred Stock have been duly executed,
countersigned, registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Preferred Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such Security or
the instrument governing such Security providing for such conversion or exercise
as approved by the Board, for the consideration approved by the Board (not less
than the par value of the Preferred Stock), then the shares of Preferred Stock
will be legally issued, fully paid and non assessable.
<PAGE> 3
4. With respect to Depositary Shares, when (a) the Board has taken all
necessary corporate action to approve the issuance and terms of the Depositary
Shares, the terms of the offering thereof, and related matters, including the
adoption of a Designation relating to the Preferred Stock underlying such
Depositary Shares and the filing of the Designation with the Secretary of State
of the State of Nevada, (b) the Depositary Agreement or Agreements relating to
the Depositary Shares and the related Depositary Receipts have been duly
authorized and validly executed and delivered by the Company and the Depositary
appointed by the Company, (c) the shares of Preferred Stock underlying such
Depositary Shares have been deposited with a bank or trust company (which meets
the requirements for the Depositary forth in the Registration Statement) under
the applicable Depositary Agreements, and (d) the Depositary Receipts
representing the Depositary Shares have been duly executed, countersigned,
registered and delivered in accordance with the appropriate Depositary Agreement
and the applicable definitive purchase, underwriting or similar agreements
approved by the Board upon payment of the consideration therefore provided for
therein, the Depositary Shares will be legally issued.
5. With respect to the Warrants, when (a) the Board has taken all
necessary corporate action to approve the creation of and the issuance and terms
of the Warrants, the terms of the offering thereof, and related matters (b) the
warrant agreement or agreements relating to the Warrants have been duly
authorized and validly executed and delivered by the Company and the warrant
agent appointed by the Company, and (c) the Warrants or certificates
representing the Warrants have been duly executed, countersigned, registered and
delivered in accordance with the appropriate warrant agreement or agreements and
the applicable definitive purchase, underwriting or similar agreement approved
by the Company's Board upon payment of the consideration therefor provided for
therein, the Warrants will be legally issued.
<PAGE> 4
6. With respect to Guarantees, when (a) the Indenture or an appropriate
supplemental indenture, if any, has been duly authorized and validly executed
and delivered by a Guarantor to the Trustee, (b) such Guarantor's Board of
Directors has taken all necessary corporate action to approve the issuance and
terms of such Guarantees, the terms of the offering thereof and related matters,
(c) the related Debt Securities have been properly issued as contemplated in
paragraph 1 of this opinion, and (d) the Guarantees have been duly executed,
issued and delivered in accordance with the provisions of the Indenture (if
applicable) and the applicable definitive purchase, underwriting or similar
agreement approved by such Guarantor's Board of Directors upon the payment of
the consideration therefor provided for therein, such Subsidiary Guarantees will
be legally enforceable against the Guarantor in accordance with their terms.
The opinions expressed above are subject in all respects to the following
assumption, exceptions and qualifications:
A. We have assumed that (a) the Registration Statement and any
amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (b) the Registration
Statement will be effective and will comply with all applicable laws at the
time the Securities are offered or issued as contemplated by the
Registration Statement (if such offering or issuance requires the delivery
of a prospectus under the Securities Act or pursuant to any other law); (c)
a Prospectus Supplement will have been prepared and filed with the
Securities and Exchange Commission describing the Securities offered
thereby and will comply with all applicable laws; (d) all Securities will
be issued and sold in compliance with applicable federal and state
securities laws and in the manner stated in the Registration Statement and
the appropriate Prospectus Supplement; (e) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered or
issued will have been duly authorized and validly executed and delivered by
<PAGE> 5
the Company and the other parties thereto; and (f) any Securities issuable
upon conversion, exchange or exercise of any Security being offered or
issued will be duly authorized, created and, if appropriate, reserved for
issuance upon such conversion, exchange or exercise.
B. In rendering the opinions in paragraph 1 and 6, we have assumed
that the trustee is or, at the time the Indenture is signed, will be
qualified to act as trustee under the Indenture and that the trustee has or
will have duly executed and delivered the Indenture.
C. The enforceability of the Indenture and the Guarantees and
provisions thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now
or hereinafter in effect relating to or affecting enforcement of creditors'
rights generally and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law). Such
principles or equity include concepts of materiality, reasonableness, good
faith and fair dealing, and also to the possible unavailability of
specific performance or injunctive relief.
D. We express no opinion respecting (a) the enforceability of
provisions in the Indenture, Guarantees, or any other agreement or
instrument with respect to delay or omission of enforcement of rights or
remedies, or waivers of notices or defenses, or waivers of benefits of, or
other rights that cannot be effectively waived under, applicable laws; (b)
the enforceability of indemnification provisions to the extent they purport
to relate to liabilities resulting from or based upon negligence or any
violation of federal or state securities or blue sky laws or (c) the
enforceability of Sections 2.18, 11.07 and 14.11 of the Indenture.
<PAGE> 6
E. We note that the Indenture by its terms purports to be governed
by the laws of the State of New York and that the terms of the Warrants and
Guarantees, when determined, may be governed by the laws of a jurisdiction
other than the State of Utah or other than the Domestic and Foreign
Corporation Laws of the State of Nevada. While we express no opinion with
respect to the laws of the State of New York or such other jurisdictions in
rendering these opinions, we have assumed that the internal laws of the
State of New York and such other jurisdictions are the same as the internal
laws of the State of Utah. We have not conducted any analysis to determine
whether that assumption is correct.
F. The opinions expressed in this letter are limited to the laws of
the State of Utah, the Domestic and Foreign Corporation Laws of the State
of Nevada, and the federal laws of the United States of America.
We consent to the filing of this opinion of counsel as Exhibit 5.1 to the
Registration Statement. We also consent to the reference to this firm under the
heading "Legal Opinions" in the Prospectus forming a part of the Registration
Statement. In giving this consent, we do not admit that this firm is in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
This opinion is rendered on the date hereof, and we disclaim any duty to
advise you regarding any changes in the matters addressed herein.
Very truly yours,
KRUSE, LANDA & MAYCOCK, LLC
/s/ Kruse, Landa & Maycock, LLC
KLM/JRK:sp
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated February 26, 1999, relating to the financial
statements, which appear in FX Energy, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the references to us under the
caption "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Salt Lake City, Utah
June 11, 1999
CONSENT OF PETROLEUM ENGINEERING CONSULTANT
I hereby consent to (i) the incorporation by reference into the registration
statement on Form S-3 of FX Energy, Inc. (the "Company") of my report as of
January 19, 1999, respecting the estimated oil reserve information for the
Montana and Nevada producing properties of the Company, as such report is
referred to in the Company's annual report on form 10-K for its fiscal year
ended December 31, 1998; and (ii) the reference to me under the heading
"Experts" in such Registration Statement.
/s/ LARRY D. KRAUSE
Billings, Montana
June 10, 1999
FX ENERGY, INC.
AND
[------------------------------------]
AS TRUSTEE
--OO0OO--
INDENTURE
DATED AS OF ------, 1999
--OO0OO--
DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
RECITALS OF THE COMPANY.....................................................1
ARTICLE I
DEFINITIONS
Section 1.01. Certain Terms Defined........................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act............7
Section 1.03. Rules of Construction........................................8
ARTICLE II
DEBT SECURITIES
Section 2.01. Forms Generally ..............................................8
Section 2.02. Form of Trustee's Certificate of Authentication ..............8
Section 2.03. Principal Amount; Issuable in Series..........................9
Section 2.04. Execution of Debt Securities ................................11
Section 2.05. Authentication and Delivery of Debt Securities ..............12
Section 2.06. Denomination of Debt Securities .............................12
Section 2.07. Registration of Transfer and Exchange .......................13
Section 2.08. Temporary Debt Securities ...................................14
Section 2.09. Mutilated, Destroyed, Lost or Stolen Debt Securities ........15
Section 2.10. Cancellation of Surrendered Debt Securities .................16
Section 2.11. Provisions of the Indenture and Debt Securities for the Sole
Benefit of the Parties and the Holders .....................16
Section 2.12. Payment of Interest; Interest Rights Preserved ..............16
Section 2.13. Securities Denominated in Foreign Currencies ................17
Section 2.14. Wire Transfers ..............................................17
Section 2.15. Securities Issuable in the Form of a Global Security ........18
Section 2.16. Medium Term Securities ......................................20
Section 2.17. Defaulted Interest ..........................................20
Section 2.18. Judgments ...................................................21
Section 2.19. CUSIP Numbers................................................22
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. Applicability of Article ....................................22
Section 3.02. Tax Redemption; Special Tax Redemption.......................22
Section 3.03. Notice of Redemption; Selection of Debt Securities ..........23
Section 3.04. Payment of Debt Securities Called for Redemption ............25
Section 3.05. Mandatory and Optional Sinking Funds ........................26
Section 3.06. Redemption of Debt Securities for Sinking Fund...............26
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. Payment of Principal of, and Premium, if any, and Interest on,
Debt Securities .............................................27
Section 4.02. Maintenance of Offices or Agencies for Registration of Transfer,
Exchange and Payment of Debt Securities ....................28
Section 4.03. Appointment to Fill a Vacancy in the Office of Trustee ......28
Section 4.04. Duties of Paying Agents, etc ................................28
Section 4.05. Statement by Officers as to Default .........................29
Section 4.06. Payment of Additional Interest ..............................29
Section 4.07. Further Instruments and Acts ................................31
Section 4.08. Existence....................................................31
ARTICLE V
HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 5.01. Company to Furnish Trustee Information as to Names and Addresses
of Holders; Preservation of Information .....................31
Section 5.02. Communications to Holders ...................................31
Section 5.03. Reports by Company ..........................................31
Section 5.04. Reports by Trustee ..........................................32
Section 5.05. Record Dates for Action by Holders...........................32
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. Events of Default ...........................................32
Section 6.02. Collection of Indebtedness by Trustee, etc...................34
Section 6.03. Application of Moneys Collected by Trustee ..................35
Section 6.04. Limitation on Suits by Holders ..............................36
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights
Not a Waiver of Default......................................36
Section 6.06. Rights of Holders of Majority in Principal Amount of Debt
Securities to Direct Trustee and to Waive Default. ..........36
Section 6.07. Trustee to Give Notice of Defaults Known to It, but May
Withhold Such Notice in Certain Circumstances. ..............37
Section 6.08. Requirement of an Undertaking To Pay Costs in Certain Suits
under the Indenture or Against the Trustee. .................37
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities .........................37
Section 7.02. Certain Rights of Trustee ...................................38
Section 7.03. Trustee Not Liable for Recitals in Indenture or in Debt
Securities ..................................................39
Section 7.04. Trustee, Paying Agent or Registrar May Own Debt Securities ..39
Section 7.05. Moneys Received by Trustee to Be Held in Trust ..............39
Section 7.06. Compensation and Reimbursement ..............................40
Section 7.07. Right of Trustee to Rely on an Officers' Certificate Where No
Other Evidence Specifically Prescribed ......................40
Section 7.08. Separate Trustee; Replacement of Trustee.....................40
Section 7.09. Successor Trustee by Merger .................................41
Section 7.10. Eligibility; Disqualification ...............................41
Section 7.11. Preferential Collection of Claims Against Company ...........42
Section 7.12. Compliance with Tax Laws.....................................42
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. Evidence of Action by Holders ...............................42
Section 8.02. Proof of Execution of Instruments and of Holding of Debt
Securities ..................................................42
Section 8.03. Who May Be Deemed Owner of Debt Securities ..................42
Section 8.04. Instruments Executed by Holders Bind Future Holders..........43
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Purposes for Which Supplemental Indenture May Be Entered into
Without Consent of Holders .................................43
Section 9.02. Modification of Indenture with Consent of Holders of Debt
Securities ..................................................45
Section 9.03. Effect of Supplemental Indentures ...........................46
Section 9.04. Debt Securities May Bear Notation of Changes by Supplemental
Indentures ..................................................46
Section 9.05. Payment for Consent..........................................46
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01.Consolidations and Mergers of the Company....................47
Section 10.02.Rights and Duties of Successor Corporation...................47
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01.Applicability of Article.....................................47
Section 11.02.Satisfaction and Discharge of Indenture; Defeasance..........48
Section 11.03.Conditions of Defeasance.....................................48
Section 11.04.Application of Trust Money...................................49
Section 11.05.Repayment to Company.........................................49
Section 11.06.Indemnity for U.S. Government Obligations....................50
Section 11.07.Reinstatement................................................50
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. Applicability of Article; Agreement To Subordinate..........50
Section 12.02. Liquidation, Dissolution, Bankruptcy........................50
Section 12.03. Default on Senior Indebtedness..............................50
Section 12.04. Acceleration of Payment of Debt Securities..................51
Section 12.05. When Distribution Must Be Paid Over.........................51
Section 12.06. Subrogation.................................................51
Section 12.07. Relative Rights.............................................51
Section 12.08. Subordination May Not Be Impaired by Company................51
Section 12.09. Rights of Trustee and Paying Agent..........................51
Section 12.10. Distribution or Notice to Representative....................52
Section 12.11. Article XII Not to Prevent Defaults or Limit
Right to Accelerate ........................................52
Section 12.12. Trust Moneys Not Subordinated...............................52
Section 12.13. Trustee Entitled to Rely....................................52
Section 12.14. Trustee to Effectuate Subordination.........................52
Section 12.15. Trustee Not Fiduciary for Holders of Senior Indebtedness....53
Section 12.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions..................................................53
ARTICLE XIII
GUARANTEE OF DEBT SECURITIES
Section 13.01. Applicability of Article....................................53
Section 13.02. Unconditional Guarantee.....................................53
Section 13.03. Execution and Delivery of Subsidiary Guarantees.............54
Section 13.04. Limitation on Merger or Consolidation.......................55
Section 13.05. Release of Subsidiary Guarantors............................55
Section 13.06. Limitation of Subsidiary Guarantor's Liability..............55
Section 13.07. Contribution................................................55
Section 13.08. Subordination of Guarantees.................................56
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.01. Successors and Assigns of Company Bound by Indenture........56
Section 14.02. Acts of Board, Committee or Officer of Successor
Company Valid...............................................56
Section 14.03. Required Notices or Demands.................................56
Section 14.04. Indenture and Debt Securities to Be Construed in Accordance
with the Laws of the State of New York......................57
Section 14.05. Officers' Certificate and Opinion of Counsel to be Furnished
upon Application or Demand by the Company ..................57
Section 14.06. Payments Due on Legal Holidays..............................57
Section 14.07. Provisions Required by Trust Indenture Act to Control.......57
Section 14.08. Computation of Interest on Debt Securities..................58
Section 14.09. Rules by Trustee, Paying Agent and Registrar................58
Section 14.10. No Recourse Against Others..................................58
Section 14.11. Severability................................................58
Section 14.12. Effect of Headings..........................................58
Section 14.13. Indenture May Be Executed in Counterparts...................58
<PAGE>
FX ENERGY, INC.
DEBT SECURITIES
CROSS REFERENCE SHEET
* This Cross Reference Sheet shows the location in the Indenture of the
provisions inserted pursuant to Sections 310-318(a), inclusive of the Trust
Indenture Act of 1939.
TIA SECTION INDENTURE SECTION
[S] [C]
310
(a)(1)..................................................7.10
(a)(2)..................................................7.10
(a)(3)..................................................7.10
(a)(4)..................................................7.10
(a)(5)..................................................7.10
(b).....................................................7.10
(c).....................................................N.A.
**311
(a).....................................................7.11
(b).....................................................7.11
(c).....................................................N.A.
312
(a).....................................................5.01
(b).....................................................5.02
(c).....................................................5.02
313
(a).....................................................5.04
(b)(1)..................................................5.04
(b)(2)..................................................5.04
(c)....................................................14.03
(d).....................................................5.04
314
(a)(1)...............................................5.03(a)
(a)(2)...............................................5.03(b)
(a)(3)..................................5.03(a), (b) & 13.03
(a)(4)..................................................4.05
(b).....................................................N.A.
(c)(1).................................................14.05
(c)(2).................................................14.05
(c)(3)..................................................N.A.
(d).....................................................N.A.
(e)....................................................14.05
(f).....................................................4.06
315
(a)..................................................7.01(a)
(b)..............................................6.07 & 3.03
(c).....................................................7.01
(d).....................................................7.01
(e).....................................................6.08
316
(a) (last sentence).....................................1.01
(a)(1)(A)...............................................6.06
(a)(1)(B)...............................................6.06
(a)(2)..................................................9.01
(d) (b).................................................6.04
(c).....................................................5.05
317
(a)(1)..................................................6.02
(a)(2)..................................................6.02
(b).....................................................4.04
318
(a)....................................................14.07
* The Cross Reference Sheet is not part of the Indenture.
** N.A. means "Not Applicable."
<PAGE>
INDENTURE
INDENTURE, dated as of ------------------, between FX ENERGY, INC., a
corporation duly organized and existing under the laws of the State of Nevada
(hereinafter sometimes called the "Company"), and -------------------------,
a --------------------------- (hereinafter sometimes called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the "Debt Securities"),
as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH
That in order to declare the terms and conditions upon which the Debt
Securities are authenticated, issued and delivered, and in consideration of the
premises, and of the purchase and acceptance of the Debt Securities by the
holders thereof, the Company and the Trustee covenant and agree with each other,
for the benefit of the respective Holders from time to time of the Debt
Securities or any series thereof, as follows:
<PAGE>1
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN TERMS DEFINED. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any Indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or that are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force as of the date of original execution of this
Indenture.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 2.03
with respect to the Debt Securities of any series. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any business day in such city.
<PAGE>2
"Bearer Holder" means, with respect to any Bearer Security or Coupon, the
bearer thereof.
"Bearer Security" means any Debt Security (with or without Coupons), title
to which passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the Board of Directors of the Company or
any duly authorized committee or subcommittee of such Board, except as the
context may otherwise require.
"business day" means, when used with respect to any Place of Payment
specified pursuant to Section 2.03, any day that is not a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies in
such Place of Payment are authorized or obligated by law to close, except as
otherwise specified pursuant to Section 2.03.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP.
"Commodity Price Protection Agreement" means, in respect of any Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
<PAGE>3
"Common Stock" means the common stock, par value $0.001 per share, of the
Company, which stock is currently listed on the Nasdaq National Market.
"Company" means FX Energy, Inc., a Nevada corporation, and, subject to the
provisions of Article X, shall also include its successors and assigns.
"Company Order" means a written order of the Company, signed by its
Chairman of the Board, Vice Chairman, President or any Vice President and by its
Treasurer, Secretary, any Assistant Treasurer or any Assistant Secretary.
"corporate trust office of the trustee" or other similar term means the
office of the Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered in the United States
of America, except that with respect to the presentation of Debt Securities for
payment or for registration of transfer and exchange, such term shall also mean
the office of the Trustee or the Trustee's agent in ------------------------,
at which at any particular time its corporate agency business shall be
conducted.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Coupon Security" means any Bearer Security authenticated and delivered
with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
<PAGE>4
"Debt Security" or "Debt Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any debt security or debt
securities, as the case may be of any series authenticated and delivered under
this Indenture.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, unless otherwise specified by the Company pursuant to
either Section 2.03 or 2.15, with respect to registered Debt Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, The Depository Trust Company, New York, New York, or any successor
thereto registered as a clearing agency under the Exchange Act or other
applicable statute or regulations.
"Designated Senior Indebtedness" means any Senior Indebtedness which, at
the date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $[ ] million and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture and has been
designated as "Designated Senior Indebtedness" for purposes of this Indenture in
an Officers' Certificate received by the Trustee.
"Dollar" or "$" means such currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
"Dollar Equivalent" means, with respect to any monetary amount in a Foreign
Currency, at any time for the determination thereof, the amount of Dollars
obtained by converting such Foreign Currency involved in such computation into
Dollars at the spot rate for the purchase of Dollars with the applicable Foreign
Currency as quoted by (unless another comparable financial
<PAGE>5
institution is designated by the Company) in New York, New York at approximately
11:00 a.m. (New York time) on the date two business days prior to such
determination.
"Euro" means the lawful currency of the participating member states of the
European Union, or its successors that adopt a single currency in accordance
with the Treaty establishing the European Community, as amended by the Treaty on
European Union that was signed on February 7, 1992.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.
"Foreign Currency" means a currency issued by the government of any country
other than the United States or a composite currency the value of which is
determined by reference to the values of the currencies of any group of
countries.
"GAAP" means generally accepted accounting principles in the United States
as in effect as of the date on which the Debt Securities of the applicable
series are issued, including those set forth in (i) the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (ii) statements and pronouncements of the
Financial Accounting Standards Board, (iii) such other statements by such other
entity as approved by a significant segment of the accounting profession and
(iv) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
<PAGE>6
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP consistently applied.
"Global Security" means with respect to any series of Debt Securities
issued hereunder, a Debt Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and any
Indentures supplemental hereto, or resolution of the Board of Directors and set
forth in an Officers' Certificate, which shall be registered in the name of the
Depositary or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all the Outstanding Debt
Securities of such series or any portion thereof, in either case having the same
terms, including the same original issue date, date or dates on which principal
is due and interest rate or method of determining interest.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order to permit the Company or any of its Subsidiaries
to perform any contract or subcontract made by it with or at the request of
the United States or any state thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
state thereof or any department, agency or instrumentality of either pursuant to
the provisions of any contract, statute, regulation or order.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to keep-
<PAGE>7
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (b) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Protection Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or other similar agreement.
"Holder," "Holder of Debt Securities" or other similar terms means, with
respect to a Registered Security, the Registered Holder and, with respect to a
Bearer Security or a Coupon, the Bearer Holder.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication: (i) any liability, contingent or otherwise, of
such Person (A) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument, or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property); (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
as entered into in the ordinary course of business; (iv) all indebtedness of
others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on any asset or
<PAGE>8
property (including leasehold interests and any other tangible or intangible
property) of such Person, whether or not such indebtedness is assumed by such
Person or is not otherwise such Person's legal liability; provided that if the
obligations so secured have not been assumed in full by such Person or are
otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien or the fair market value
of the assets or the property securing such lien; (v) all indebtedness of others
(including all interest and dividends on any Indebtedness or Preferred Stock of
any other Person the payment of which is) guaranteed, directly or indirectly, by
such Person or that is otherwise its legal liability or which such Person has
agreed to purchase or repurchase or in respect of which such Person has agreed
contingently to supply or advance funds; and (vi) to the extent not otherwise
included in this definition, obligations in respect of Hedging Obligations.
Indebtedness shall not include (a) accounts payable arising in the ordinary
course of business, and (b) any obligations in respect of prepayments for gas or
oil production or gas or oil imbalances.
"Indenture" means this instrument as originally executed, or, if amended or
supplemented as herein provided, as so amended or supplemented and shall include
the form and terms of particular series of Debt Securities as contemplated
hereunder, whether or not a supplemental Indenture is entered into with respect
thereto.
"Interest" includes, when used with respect to a Bearer Security, any
additional interest payable on such Bearer Security pursuant to Sections 3.02
or 4.06.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
<PAGE>9
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
charge or adverse claim affecting title or resulting in an encumbrance against
real or personal property or a security interest of any kind (including any
conditional sale or other title retention agreement or lease in the nature
thereof or any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the Company or any of its
Subsidiaries under a lease that is not in the nature of a conditional sale or
title retention agreement).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman, the President or any Vice President and by the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company. Each such certificate shall include the statements provided for in
Section 13.05, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal counsel
for the Company (which counsel may be an employee of the Company), or outside
counsel for the Company. Each such opinion shall include the statements provided
for in Section 13.05, if applicable.
"Original Issue Discount Debt Security" means any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.
"Outstanding", when used with respect to any series of Debt Securities,
means, as of the date of determination, all Debt Securities of that series
theretofore authenticated and delivered under this Indenture, except:
<PAGE>10
(a) Debt Securities of that series theretofore canceled by the Trustee
or delivered to the Trustee for cancellation;
(b) Debt Securities of that series for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any paying agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
paying agent) for the Holders of such Debt Securities; provided, that, if
such Debt Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(c) Debt Securities of that series that have been paid pursuant to
Section 2.09 or in exchange for or in lieu of which other Debt Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Debt Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debt Securities
are held by a bona fide purchaser in whose hands such Debt Securities are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities of any
series have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Debt Securities owned by the Company or any
other obligor upon the Debt Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities that a
responsible officer of the Trustee actually knows to be so owned shall be
so disregarded. Debt Securities so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
<PAGE>11
to such Debt Securities and that the pledgee is not the Company or any
other obligor upon the Debt Securities or an Affiliate of the Company or
of such other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
the principal amount of an Original Issue Discount Debt Security
that shall be deemed to be Outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 6.01. In determining whether the
Holders of the requisite principal amount of the Outstanding Debt
Securities of any series have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Debt Security denominated in one or more foreign currencies or currency
units that shall be deemed to be Outstanding for such purposes shall be the
Dollar Equivalent, determined in the manner provided as contemplated by
Section 2.03 on the date of original issuance of such Debt Security, of the
principal amount (or, in the case of any Original Issue Discount Security,
the Dollar Equivalent on the date of original issuance of such Security of
the amount determined as provided in the preceding sentence above) of such
Debt Security.
"pari passu", as applied to the ranking of any Indebtedness of a Person in
relation to other Indebtedness of such Person, means that each such Indebtedness
either (a) is not subordinate in right of payment to any Indebtedness or (b) is
subordinate in right of payment to the same Indebtedness as is the other, and is
so subordinate to the same extent, and is not subordinate in right of payment to
each other or to any Indebtedness as to which the other is not so subordinate.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
<PAGE>12
organization, government or any agency or political subdivision thereof or any
other entity.
"Place of Payment" means, when used with respect to the Debt Securities of
any series, the place or places where the principal of, and premium, if any, and
interest on, the Debt Securities of that series are payable as specified
pursuant to Section 2.03.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Registered Holder" means the Person in whose name a Registered Security is
registered in the Debt Security Register (as defined in Section 2.07(a)).
"Registered Security" means any Debt Security registered as to principal
and interest in the Debt Security Register (as defined in Section 2.07(a)).
"Registrar" has the meaning set forth in Section 2.07(a).
"Representative" means the trustee, agent or representative (if any) for an
issue of Senior Indebtedness.
"responsible officer", when used with respect to the Trustee, means any
Account Manager or any officer within the corporate trust trustee administration
group of the Trustee, including any Vice President, any Assistant Vice
President, any Treasurer, any Assistant Treasurer, any trust officer or any
other officer of the Trustee performing functions similar to those performed by
the persons who at the time shall be such officers, and any other officer of the
<PAGE>13
Trustee to whom corporate trust matters are referred because of his knowledge of
and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, as to any series of Debt Securities
subordinated pursuant to the provisions of Article XII, the Indebtedness of the
Company identified as Senior Indebtedness in the resolution of the Board of
Directors and accompanying Officers' Certificate or supplemental Indenture
setting forth the terms, including as to Subordination, of such series.
"Significant Subsidiary" means a Subsidiary of any Person that would be a
"significant subsidiary" as defined in Rule 405 under the Securities Act as in
effect on the date of this Indenture.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subsidiary" of any Person means (i) any Person of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Subsidiaries of that Person or a
combination thereof, and (ii) any partnership, joint venture or other Person in
which such Person or one or more of the Subsidiaries of that Person or a
combination thereof has the power to control by contract or otherwise the board
of directors or equivalent governing body or otherwise controls such entity.
<PAGE>14
"Subsidiary Guarantee" means the guarantee of the Subsidiary Guarantors as
provided in Article XIII.
"Subsidiary Guarantors" means any Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
"Trustee" initially means and any other Person or
Persons appointed as such from time to time pursuant to Section 7.08, and,
subject to the provisions of Article VII, includes its or their successors and
assigns. If at any time there is more than one such Person, "Trustee" as used
with respect to the Debt Securities of any series shall mean the Trustee with
respect to the Debt Securities of that series.
"Trust Indenture Act" (except as herein otherwise expressly provided) means
the Trust Indenture Act of 1939 as in force at the date of this Indenture as
originally executed and, to the extent required by law, as amended.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more members of which is, for United States federal income
tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
<PAGE>15
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Yield to Maturity" means the yield to maturity, calculated at the time of
issuance of a series of Debt Securities, or, if applicable, at the most recent
redetermination of interest on such series and calculated in accordance with
accepted financial practice.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the Trust Indenture Act,
which are incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms have the following meanings:
"indenture securities" means the Debt Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Debt Securities.
All other Trust Indenture Act terms used in this Indenture that are defined
by the Trust Indenture Act, reference to another statute or defined by rules of
the Securities and Exchange Commission have the meanings assigned to them by
such definitions.
Section 1.03. RULES OF CONSTRUCTION. Unless the context otherwise requires:
<PAGE>16
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(g) the masculine gender includes the feminine and the neuter;
(h) a "day" means a calendar day; and
(i) references to agreements and other instruments include subsequent
amendments and waivers but only to the extent not prohibited by this
Indenture.
ARTICLE II
DEBT SECURITIES
Section 2.01. FORMS GENERALLY. The Debt Securities and Coupons, if any, of
each series shall be in substantially the form established without the approval
of any Holder by or pursuant to a resolution of the Board of Directors or in one
or more Indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
<PAGE>17
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as the Company
may deem appropriate (and, if not contained in a supplemental Indenture entered
into in accordance with Article IX, as are not prohibited by the provisions of
this Indenture) or as may be required or appropriate to comply with any law or
with any rules made pursuant thereto or with any rules of any securities
exchange on which such series of Debt Securities may be listed, or to conform to
general usage, or as may, consistently herewith, be determined by the officers
executing such Debt Securities and Coupons, as evidenced by their execution of
the Debt Securities and Coupons.
The definitive Debt Securities of each series and Coupons, if any, shall be
typewritten, printed, lithographed or engraved on steel engraved borders or may
be produced in any other manner, all as determined by the officers executing
such Debt Securities and Coupons, as evidenced by their execution of such Debt
Securities and Coupons.
Each Bearer Security and each Coupon shall bear a legend substantially to
the following effect: "Any United States Person who holds this obligation will
be subject to limitations under the United States federal income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code."
Section 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's Certificate of Authentication on all Debt Securities authenticated by
the Trustee shall be in substantially the following form:
<PAGE>18
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated:-----------------------, 1999
[-----------------------------],
As Trustee
By:---------------------------
Authorized Signature
Section 2.03. PRINCIPAL AMOUNT; ISSUABLE IN SERIES. The aggregate principal
amount of Debt Securities which may be issued, executed, authenticated,
delivered and outstanding under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established, without the approval of any Holders, in or pursuant to a resolution
of the Board of Directors and set forth in an Officers' Certificate, or
established in one or more Indentures supplemental hereto, prior to the issuance
of Debt Securities of any series any or all of the following:
(a) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt
Securities);
(b) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);
<PAGE>19
(c) the date or dates on which the principal and premium, if any, of
the Debt Securities of the series are payable;
(d) the rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest shall be
payable, or the method by which such date will be determined, in the case
of Registered Securities, the record dates for the determination of Holders
thereof to whom such interest is payable; and the basis upon which interest
will be calculated if other than that of a 360-day year of twelve thirty-
day months;
(e) the place or places, if any, in addition to or instead of the
corporate trust office of the Trustee (in the case of Registered
Securities) or the principal London office of the Trustee (in he case of
Bearer Securities), where the principal of, and premium, if any, and
interest on, Debt Securities of the series shall be payable;
(f) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company or
otherwise;
(g) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are to be issued, whether Coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series and the circumstances under which and the places
at which any such exchanges, if permitted, may be made;
<PAGE>20
(h) if any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (i) whether the provisions of Sections
3.02 and 4.06 or other provisions for payment of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (ii) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 2.08) payable
in respect of any interest payment date prior to the exchange of such
temporary Bearer Security for definitive Bearer Securities of the series
shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such interest
payment date; and (iii) the terms upon which a temporary Bearer Security
may be exchanged for one or more definitive Bearer Securities of the
series;
(i) the obligation, if any, of the Company to redeem, purchase or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof, and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligations;
(j) the terms, if any, upon which the Debt Securities of the series
may be convertible into or exchanged for Common Stock, Preferred Stock
(which may be represented by depositary shares), other Debt Securities or
warrants for Common Stock, Preferred Stock or Indebtedness or other
securities of any kind of the Company or any other obligor and the terms
and conditions upon which such conversion or exchange shall be effected,
including the initial conversion or exchange price or rate, the conversion
<PAGE>21
or exchange period and any other provision in addition to or in lieu of
those described herein;
(k) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(l) if the amount of principal of or any premium or interest on Debt
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(m) if the principal amount payable at the Stated Maturity of Debt
Securities of the series will not be determinable as of any one or more
dates prior to such Stated Maturity, the amount which will be deemed to be
such principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any maturity
other than the Stated Maturity or which will be deemed to be Outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined); and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of Dollar Equivalent;
(n) any changes or additions to Article XI, including the addition of
additional covenants that may be subject to the covenant defeasance option
pursuant to Section 11.02(b);
(o) if other than such coin or Currency of the United States as at the
time of payment is legal tender for payment of public and private debts,
the coin or Currency or Currencies or units of two or more Currencies in
which payment of the principal of, and premium, if any, and interest on,
Debt Securities of the series shall be payable;
<PAGE>22
(p) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.01 or provable in bankruptcy pursuant to Section 6.02;
(q) the terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Debt Securities of the series of any properties,
assets, moneys, proceeds, securities or other collateral, including whether
certain provisions of the Trust Indenture Act are applicable and any
corresponding changes to provisions of this Indenture as currently in
effect;
(r) any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the
Trustee or the Holders to declare the principal of, and premium and
interest on, such Debt Securities due and payable;
(s) if the Debt Securities of the series shall be issued in whole or
in part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Debt Securities in
definitive registered form; and the Depositary for such Global Security or
Securities and the form of any legend or legends to be borne by any such
Global Security or Securities in addition to or in lieu of the legend
referred to in Section 2.15;
(t) any trustees, authenticating or paying agents, transfer agents or
registrars;
(u) the applicability of, and any addition to or change in the
covenants and definitions currently set forth in this Indenture or in the
terms currently set forth in Article X, including conditioning any merger,
<PAGE>23
conveyance, transfer or lease permitted by Article X upon the satisfaction
of an Indebtedness coverage standard by the Company and Successor Company
(as defined in Article X);
(v) the terms, if any, of any Guarantee of the payment of principal
of, and premium, if any, and interest on, Debt Securities of the series and
any corresponding changes to the provisions of this Indenture as currently
in effect;
(w) the subordination, if any, of the Debt Securities of the series
pursuant to Article XII and any changes or additions to Article XII;
(x) with regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and
(y) any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of this Indenture).
All Debt Securities of any one series and the Coupons, if any, appertaining
thereto shall be substantially identical except as to denomination and except as
may otherwise be provided in or pursuant to such resolution of the Board of
Directors and as set forth in such Officers' Certificate or in any such
Indenture supplemental hereto.
Section 2.04. EXECUTION OF DEBT SECURITIES. The Debt Securities and the
Coupons, if any, shall be signed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its President or a Vice President and by its
Secretary, an Assistant Secretary, a Treasurer or an Assistant Treasurer. Such
signatures upon the Debt Securities and Coupons may be the manual or facsimile
signatures of the present or any future such authorized officers and may be
imprinted or otherwise reproduced on the Debt Securities and Coupons. The seal
of the Company, if any, may be in the form of a facsimile thereof and may be
<PAGE>24
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities and
Coupons.
Only such Debt Securities and Coupons as shall bear thereon a certificate
of authentication substantially in the form hereinbefore recited, signed
manually by the Trustee, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. Such certificate by the Trustee upon any
Debt Security or Coupon executed by the Company shall be conclusive evidence
that the Debt Security or Coupon so authenticated has been duly authenticated
and delivered hereunder.
In case any officer of the Company who shall have signed any of the Debt
Securities or Coupons shall cease to be such officer before the Debt Securities
or Coupons so signed shall have been authenticated and delivered by the Trustee,
or disposed of by the Company, such Debt Securities or Coupons nevertheless may
be authenticated and delivered or disposed of as though the Person who signed
such Debt Securities or Coupons had not ceased to be such officer of the
Company; and any Debt Security or Coupon may be signed on behalf of the Company
by such Persons as, at the actual date of the execution of such Debt Security or
Coupon, shall be the proper officers of the Company, although at the date of
such Debt Security or Coupon or of the execution of this Indenture any such
Person was not such officer.
Section 2.05. AUTHENTICATION AND DELIVERY OF DEBT SECURITIES. At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Debt Securities, with appropriate Coupons, if any, of any
series executed by the Company to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver such Debt Securities and
Coupons to or upon a Company Order. In authenticating such Debt Securities and
Coupons, and accepting the additional responsibilities under this Indenture in
relation to such Debt Securities and Coupons, the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying upon:
<PAGE>25
(a) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or Assistant Secretary of the Company,
authorizing the terms of issuance of any series of Debt Securities and
Coupons;
(b) an executed supplemental Indenture, if any;
(c) an Officers' Certificate; and
(d) an Opinion of Counsel prepared in accordance with Section 13.05
which shall state:
(i) that the terms of such Debt Securities and Coupons have been
established by or pursuant to a resolution of the Board of Directors
or by a supplemental Indenture as permitted by Section 2.03 in
conformity with the provisions of this Indenture; and
(ii) that such Debt Securities and Coupons, when authenticated
and delivered by the Trustee and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or similar laws
affecting the enforcement of creditors' rights generally and (B)
rights of acceleration and the availability of equitable remedies may
be limited by equitable principles (whether in a proceeding at law or
in equity);
<PAGE>26
Such Opinion of Counsel need express no opinion as to whether a court in
the United States would render a money judgment in a currency other than that of
the United States.
The Trustee shall have the right to decline to authenticate and deliver any
Debt Securities or Coupons under this Section 2.05 if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken or if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors, trustees or vice presidents shall determine
that such action would expose the Trustee to personal liability to existing
Holders.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate Debt Securities and Coupons, if any, of any series.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Debt Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar, paying
agent or agent for service of notices and demands.
Unless otherwise provided in the form of Debt Security for any series, each
Debt Security shall be dated the date of its authentication.
Section 2.06. DENOMINATION OF DEBT SECURITIES. Unless otherwise provided in
the form of Debt Security for any series, the Debt Securities of each series
shall be issuable only as Registered Securities in such denominations as shall
be specified or contemplated by Section 2.03. In the absence of any such
specification with respect to the Debt Securities of any series, the Debt
Securities of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.
Section 2.07. REGISTRATION OF TRANSFER AND EXCHANGE.
<PAGE>27
(a) The Company shall keep or cause to be kept a register for each
series of Registered Securities issued hereunder (hereinafter collectively
referred to as the "Debt Security Register"), in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for
the registration of Registered Securities and the transfer of Registered
Securities as in this Article II provided. At all reasonable times the Debt
Security Register shall be open for inspection by the Trustee. Subject to
Section 2.15, upon due presentment for registration of transfer of any
Registered Security at any office or agency to be maintained by the Company
in accordance with the provisions of Section 4.02, the Company shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Registered Security or Registered
Securities of authorized denominations for a like aggregate principal
amount. In no event may Registered Securities, including Registered
Securities received in exchange for Bearer Securities, be exchanged for
Bearer Securities.
Unless and until otherwise determined by the Company by resolution of
the Board of Directors, the register of the Company for the purpose of
registration, exchange or registration of transfer of the Registered
Securities shall be kept at the corporate trust office of the Trustee and,
for this purpose, the Trustee shall be designated "Registrar".
Registered Securities of any series (other than a Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same series of other authorized
denominations. Subject to Section 2.15, Registered Securities to be
exchanged shall be surrendered at the office or agency to be maintained by
the Company as provided in Section 4.02, and the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor the
<PAGE>28
Registered Security or Registered Securities which the Holder making the
exchange shall be entitled to receive.
At the option of the Holder of Bearer Securities of any series, except
as otherwise specified as contemplated by Section 2.03(h) or 2.03(s) with
respect to a Global Security representing Bearer Securities, Bearer
Securities of such series may be exchanged for Registered Securities (if
the Debt Securities of such series are issuable as Registered Securities)
or Bearer Securities of the same series, of any authorized denomination or
denominations, of like tenor and aggregate principal amount, upon surrender
of the Bearer Securities to be exchanged at the office or agency of the
Company maintained for such purpose, with all unmatured Coupons and all
matured Coupons in Default thereto appertaining; provided, however, that
delivery of a Bearer Security shall occur only outside the United States.
If such Holder is unable to produce any such unmatured Coupon or Coupons or
matured Coupon or Coupons in Default, such exchange may be effected if such
Holder's Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of
such missing Coupon or Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there be furnished
to them such security or indemnity as they may require to save each of them
and any paying agent harmless. If thereafter such Holder shall surrender to
any paying agent any such missing Coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount
of such payment; provided, however, that, except as otherwise provided in
Section 2.12, interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an office or agency located
outside the United States.
Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Debt Securities that the Holder making the exchange is entitled to receive.
<PAGE>29
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States
income tax laws and regulations applicable to Debt Securities in effect at
the time of such exchange.
(b) All Registered Securities presented or surrendered for
registration of transfer, exchange or payment shall (if so required by the
Company, the Trustee or the Registrar) be duly endorsed or be accompanied
by a written instrument or instruments of transfer, in form satisfactory to
the Company, the Trustee and the Registrar, duly executed by the Registered
Holder or his attorney duly authorized in writing.
All Debt Securities issued in exchange for or upon transfer of Debt
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture as the
Debt Securities surrendered for such exchange or transfer.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax, fee,
assessment or other governmental charge that may be imposed in relation
thereto, other than those expressly provided in this Indenture to be made
at the Company's own expense or without expense or without charge to the
Holders.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Debt Securities for a period of 15 days next preceding
any mailing of notice of redemption of Debt Securities of such series or
(ii) to register the transfer of or exchange any Debt Securities selected,
called or being called for redemption; provided, however, that, if
specified pursuant to Section 2.03, any Bearer Securities of any series
<PAGE>30
that are exchangeable for Registered Securities and that are called for
redemption pursuant to Section 3.02 may, to the extent permitted by
applicable law, be exchanged for one or more Registered Securities of such
series during the period preceding the redemption date therefor.
Prior to the due presentation for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent or any Registrar may
deem and treat the Person in whose name a Debt Security is registered as
the absolute owner of such Debt Security for the purpose of receiving
payment of principal of, and premium, if any, and interest on, such Debt
Security and for all other purposes whatsoever, whether or not such Debt
Security is overdue, and none of the Company, the Trustee, any paying agent
or Registrar shall be affected by notice to the contrary.
None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for any
aspect of the records relating to, or payments made on account of,
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Section 2.08. TEMPORARY DEBT SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute and the
Trustee shall authenticate and deliver temporary Debt Securities (printed,
lithographed, photocopied, typewritten or otherwise produced) of any authorized
denomination, and substantially in the form of the definitive Debt Securities in
lieu of which they are issued, in registered form or, if authorized, in bearer
form with one or more Coupons or without Coupons, and with such omissions,
insertions and variations as may be appropriate for temporary Debt Securities
and Coupons, all as may be determined by the Company with the concurrence of the
Trustee. Temporary Debt Securities and Coupons may contain such reference to any
provisions of this Indenture as may be appropriate. Every temporary Debt
<PAGE>31
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Debt Securities.
If temporary Debt Securities of any series are issued, the Company will
cause definitive Debt Securities of such series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.03(h)(iii) with respect to a series of Debt Securities issuable as Bearer
Securities or as one or more Global Securities representing individual Bearer
Securities of the series, (a) after the preparation of definitive Debt
Securities of such series, the temporary Debt Securities of such series shall be
exchangeable for definitive Debt Securities of such series upon surrender of the
temporary Debt Securities of such series at the office or agency of the Company
at a Place of Payment for such series, without charge to the Holder thereof,
except as provided in Section 2.07 in connection with a transfer and except that
a Person receiving definitive Bearer Securities shall bear the cost of
insurance, postage, transportation and the like unless otherwise specified
pursuant to Section 2.03, and (b) upon surrender for cancellation of any one or
more temporary Debt Securities of any series (accompanied by any unmatured
Coupons appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Debt Securities of the same series of authorized denominations and of
like tenor; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided,
further, however, that delivery of a Global Security representing individual
Bearer Securities or a Bearer Security shall occur only outside the United
States. Until so exchanged, temporary Debt Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debt Securities of such series, except as otherwise specified as contemplated by
Section 2.03(h)(ii) with respect to the payment of interest on Global Securities
in temporary form.
<PAGE>32
Unless otherwise specified pursuant to Section 2.03, the Company will
execute and deliver each definitive Global Security representing individual
Bearer Securities and each Bearer Security to the Trustee at its principal
office in London or such other place outside the United States specified
pursuant to Section 2.03.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to be
exchanged and endorsed.
Section 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. If
(a) any mutilated Debt Security or any mutilated Coupon with the
Coupon Security to which it appertains (and all unmatured Coupons attached
thereto) is surrendered to the Trustee at its corporate trust office (in
the case of Registered Securities) or at its principal London office or
such other Place of Payment outside the United States specified pursuant
to Section 2.03 (in the case of Bearer Securities) or
(b) the Company and the Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Debt Security or any Coupon, and
there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them and any paying
agent harmless, and neither the Company nor the Trustee receives notice
that such Debt Security or Coupon has been acquired by a bona fide
purchaser, then the Company shall execute and, upon a Company Order, the
Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Debt Security or in exchange for
the Coupon Security to which such mutilated, destroyed, lost or stolen
<PAGE>33
Coupon appertained, a new Debt Security of the same series of like tenor,
form, terms and principal amount, bearing a number not contemporaneously
Outstanding, and, in the case of a Coupon Security, with such Coupons
attached thereto that neither gain nor loss in interest shall result from
such exchange or substitution.
Upon the issuance of any substituted Debt Security, the Company may
require the payment of a sum sufficient to cover any tax, fee, assessment
or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith. In case any Debt Security or Coupon
which has matured or is about to mature or which has been called for
redemption shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substituted Debt Security or Coupon, pay
or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security or Coupon) if the applicant for such
payment shall furnish the Company and the Trustee with such security or
indemnity as either may require to save it harmless from all risk, however
remote, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or
theft of such Debt Security or Coupon and of the ownership thereof;
provided, however, that payment of principal of, and premium, if any, and
interest on, Bearer Securities or Coupons shall, except as otherwise
provided in Section 2.12, be payable only at an office or agency located
outside the United States.
Every substituted Debt Security of any series, with its Coupons, if
any, issued pursuant to the provisions of this Section 2.09 by virtue of
the fact that any Debt Security or Coupon is destroyed, lost or stolen
shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debt Security or
Coupon shall be found at any time, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all
<PAGE>34
other Debt Securities of that series and Coupons, if any, duly issued
hereunder. All Debt Securities and Coupons, if any, shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Debt Securities or Coupons, and shall preclude any and all other
rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their
surrender.
Section 2.10. CANCELATION OF SURRENDERED DEBT SECURITIES. All Debt
Securities surrendered for payment, redemption, registration of transfer or
exchange and all Coupons surrendered for payment or exchange shall, if
surrendered to the Company or any paying agent or a Registrar, be delivered to
the Trustee for cancellation by it, or if surrendered to the Trustee, shall be
canceled by it, and no Debt Securities or Coupons shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities and Coupons held by the Trustee shall be
destroyed (subject to the record retention requirements of the Exchange Act) and
certification of their destruction delivered to the Company, unless otherwise
directed. On request of the Company, the Trustee shall deliver to the Company
canceled Debt Securities and Coupons held by the Trustee. If the Company shall
acquire any of the Debt Securities or Coupons, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented
thereby unless and until the same are delivered or surrendered to the Trustee
for cancellation. The Company may not issue new Debt Securities or Coupons to
replace Debt Securities or Coupons it has redeemed, paid or delivered to the
Trustee for cancellation.
Section 2.11. PROVISIONS OF THE INDENTURE AND DEBT SECURITIES FOR THE SOLE
BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in the Debt
Securities or Coupons, expressed or implied, shall give or be construed to give
<PAGE>35
to any Person, other than the parties hereto, the Holders or any Registrar or
paying agent, any legal or equitable right, remedy or claim under or in respect
of this Indenture, or under any covenant, condition or provision herein
contained; all its covenants, conditions and provisions being for the sole
benefit of the parties hereto, the Holders and any Registrar and paying agents.
Section 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Registered Security that is payable and is
punctually paid or duly provided for on any interest payment date shall be
paid to the Person in whose name such Registered Security is registered at
the close of business on the regular record date for such interest
notwithstanding the cancellation of such Registered Security upon any
transfer or exchange subsequent to the regular record date. In case a
Coupon Security of any series is surrendered in exchange for a Registered
Security of such series after the close of business (at an office or agency
in a Place of Payment for such series) on any regular record date and
before the opening of business (at such office or agency) on the next
succeeding interest payment date, such Coupon Security shall be surrendered
without the Coupon relating to such interest payment date and interest will
not be payable on such interest payment date in respect of the Registered
Security issued in exchange for such Coupon Security, but will be payable
only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture. Payment of interest on Registered Securities
shall be made at the corporate trust office of the Trustee (except as
otherwise specified pursuant to Section 2.03), or at the option of the
Company, by check mailed to the address of the Person entitled thereto as
such address shall appear in the Debt Security Register or, if provided
pursuant to Section 2.03 and in accordance with arrangements satisfactory
to the Trustee, at the option of the Registered Holder by wire transfer to
an account designated by the Registered Holder.
<PAGE>36
(b) No interest shall be payable with respect to a Bearer Security or
Coupon unless such certification requirements as are specified pursuant to
Section 2.03(h)(ii) are satisfied with respect to such Bearer Security or
Coupon. Interest on any Coupon Security that is payable and is punctually
paid or duly provided for on any interest payment date shall be paid to the
Holder of the Coupon that has matured on such interest payment date upon
surrender of such Coupon on such interest payment date at the principal
London office of the Trustee or at such other Place of Payment outside
the United States specified pursuant to Section 2.03.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any interest payment
date shall be paid to the Holder of the Bearer Security upon presentation
of such Bearer Security and notation thereon on such interest payment date
at the principal [London] office of the Trustee or at such other Place of
Payment outside the United States specified pursuant to Section 2.03.
Unless otherwise specified pursuant to Section 2.03, at the direction
of the Holder of any Bearer Security or Coupon payable in Dollars, and
subject to applicable laws and regulations, payments in respect of such
Bearer Security or Coupon will be made by check drawn on a bank in New
York, New York, or, in accordance with arrangements satisfactory to the
Trustee, by wire transfer to a Dollar account maintained by such Holder
with a bank outside the United States.
If such payment at the offices of all paying agents outside the United
States becomes illegal or is effectively precluded because of the
imposition of exchange controls or similar restrictions on the full payment
or receipt of such amounts in Dollars, then, to the extent permitted by
United States tax law, the Company will appoint an office or agent in the
United States at which such payment may be made. Unless otherwise specified
pursuant to Section 2.03, at the direction of the Holder of any Bearer
<PAGE>37
Security or Coupon payable in a Foreign Currency, payment on such Bearer
Security or Coupon will be made by a check drawn on a bank outside the
United States or, in accordance with arrangements satisfactory to the
Trustee, by wire transfer to an appropriate account maintained by such
Holder outside the United States. Except as provided in this paragraph, no
payment on any Bearer Security or Coupon will be made by mail to an address
in the United States or by transfer to an account in the United States.
(c) Subject to the foregoing provisions of this Section 2.12 and
Section 2.17, each Debt Security of a particular series delivered under
this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Debt Security of the same series shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such
other Debt Security.
Section 2.13. SECURITIES DENOMINATED IN FOREIGN CURRENCIES.
(a) Except as otherwise specified pursuant to Section 2.03 for Bearer
Securities of any series, payment of the principal of, and premium, if any,
and interest on, Bearer Securities of such series denominated in any
Currency will be made in such Currency.
(b) Except as otherwise specified pursuant to Section 2.03 for
Registered Securities of any series, payment of the principal of, and
premium, if any, and interest on, Registered Securities of such series will
be made in Dollars.
(c) For the purposes of calculating the principal amount of Debt
Securities of any series denominated in a Foreign Currency or in units of
two or more Foreign Currencies (including Euro) for any purpose under this
Indenture, the principal amount of such Debt Securities at any time
<PAGE>38
Outstanding shall be deemed to be the Dollar Equivalent of such principal
amount as of the date of any such calculation.
In the event any Foreign Currency or currencies or units of two or
more Currencies in which any payment with respect to any series of Debt
Securities may be made ceases to be a freely convertible Currency on United
States Currency markets, for any date thereafter on which payment of
principal of, or premium, if any, or interest on, the Debt Securities of a
series is due, the Company shall select the Currency of payment for use on
such date, all as provided in the Debt Securities of such series. In such
event, the Company shall, as provided in the Debt Securities of such
series, notify the Trustee of the Currency which it has selected to
constitute the funds necessary to meet the Company's obligations on such
payment date and of the amount of such Currency to be paid. Such amount
shall be determined as provided in the Debt Securities of such series. The
payment to the Trustee with respect to such payment date shall be made by
the Company solely in the Currency so selected.
Section 2.14. WIRE TRANSFERS. Notwithstanding any other provision to the
contrary in this Indenture, the Company may make any payment of monies required
to be deposited with the Trustee on account of principal of, or premium, if any,
or interest on, the Debt Securities (whether pursuant to optional or mandatory
redemption payments, interest payments or otherwise) by wire transfer in
immediately available funds to an account designated by the Trustee on or before
the date such moneys are to be paid to the Holders of the Debt Securities in
accordance with the terms hereof.
Section 2.15. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 2.01 and 2.03
that the Debt Securities of a particular series are to be issued in whole
or in part in the form of one or more Global Securities, then the Company
<PAGE>39
shall execute and the Trustee or its agent shall, in accordance with
Section 2.05, authenticate and deliver, such Global Security or Securities,
which (i) shall represent, and shall be denominated in an amount equal to
the aggregate principal amount of, the Outstanding Debt Securities of such
series to be represented by such Global Security or Securities, or such
portion thereof as the Company shall specify in an Officer's Certificate,
(ii) shall be registered in the name of the Depositary for such Global
Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following
effect:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO. HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF,
or such other legend as may then be required by the Depositary for
such Global Security or Securities.
<PAGE>40
(b) Notwithstanding any other provision of this Section 2.15 or of
Section 2.07 to the contrary, and subject to the provisions of paragraph
(c) below, unless the terms of a Global Security expressly permit such
Global Security to be exchanged in whole or in part for definitive Debt
Securities in registered form, a Global Security may be transferred, in
whole but not in part and in the manner provided in Section 2.07, only by
the Depositary to a nominee of the Depositary for such Global Security, or
by a nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or a nominee of the Depositary to a
successor Depositary for such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
(c)
(i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or Securities or if at
any time the Depositary for the Debt Securities for such series shall
no longer be eligible or in good standing under the Exchange Act or
other applicable statute, rule or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security or
Securities. If a successor Depositary for such Global Security or
Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility,
the Company shall execute, and the Trustee or its agent, upon receipt
of a Company Order for the authentication and delivery of such
individual Debt Securities of such series in exchange for such Global
Security, will authenticate and deliver, individual Debt Securities of
such series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of the Global Security
in exchange for such Global Security or Securities.
<PAGE>41
(ii) The Company may at any time and in its sole discretion
determine that the Debt Securities of any series or portion thereof
issued or issuable in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities. In
such event the Company will execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of individual Debt
Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Debt
Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such
series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 2.01 and
2.03 with respect to Debt Securities issued or issuable in the form of
a Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for
individual Debt Securities of such series of like tenor and terms in
definitive form on such terms as are acceptable to the Company, the
Trustee and such Depositary. Thereupon the Company shall execute, and
the Trustee or its agent upon receipt of a Company Order for the
authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, (A) to
each Person specified by such Depositary a new Debt Security or
Securities of the same series of like tenor and terms and of any
authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security; and (B) to such Depositary a new
Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Debt Securities delivered to Holders thereof.
<PAGE>42
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Debt Securities. In case a Coupon
Security of any series is surrendered in exchange for a Registered
Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any special record
date and before the opening of business (at such office or agency) on
the related proposed date of payment of Defaulted Interest, such
Coupon Security shall be surrendered without the Coupon relating to
such proposed date of payment and Defaulted Interest will not be
payable on such proposed date of payment in respect of the Registered
Security issued in exchange for such Coupon Security, but will be
payable only to the Holder of such Coupon when due in accordance with
the provisions of this Indenture. Upon the exchange of the entire
principal amount of a Global Security for individual Debt Securities,
such Global Security shall be canceled by the Trustee or its agent.
Except as provided in the preceding paragraph, Registered Securities
issued in exchange for a Global Security pursuant to this Section 2.15
shall be registered in such names and in such authorized denominations as
the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or
the Registrar. The Trustee or the Registrar shall deliver such Registered
Securities to the Persons in whose names such Registered Securities are so
registered.
(v) Payments in respect of the principal of and interest on any
Debt Securities registered in the name of the Depositary or its
nominee will be payable to the Depositary or such nominee in its
capacity as the registered owner of such Global Security. The Company
and the Trustee may treat the Person in whose name the Debt
<PAGE>43
Securities, including the Global Security, are registered as the owner
thereof for the purpose of receiving such payments and for any and all
other purposes whatsoever. None of the Company, the Trustee, any
Registrar, the paying agent or any agent of the Company or the Trustee
will have any responsibility or liability for (A) any aspect of the
records relating to or payments made on account of the beneficial
ownership interests of the Global Security by the Depositary or its
nominee or any of the Depositary's direct or indirect participants, or
for maintaining, supervising or reviewing any records of the
Depositary, its nominee or any of its direct or indirect participants
relating to the beneficial ownership interests of the Global Security,
(B) the payments to the beneficial owners of the Global Security of
amounts paid to the Depositary or its nominee, or (C) any other matter
relating to the actions and practices of the Depositary, its nominee
or any of its direct or indirect participants. None of the Company,
the Trustee or any such agent will be liable for any delay by the
Depositary, its nominee, or any of its direct or indirect participants
in identifying the beneficial owners of the Debt Securities, and the
Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Depositary or its
nominee for all purposes (including with respect to the registration
and delivery, and the respective principal amounts, of the Debt
Securities to be issued).
The Trustee shall deliver individual Bearer Securities issued in
exchange for a Global Security pursuant to this Section 2.15 to the Persons
and in such authorized denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee; provided, however, that
individual Bearer Securities shall be delivered in exchange for a Global
Security only in accordance with the procedures as may be specified
pursuant to Section 2.03.
<PAGE>44
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States
income tax laws and regulations applicable to debt Securities in effect at
the time of such exchange.
Section 2.16. MEDIUM TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Debt Securities of a series are not to be originally
issued at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, resolutions of the Board of Directors,
supplemental Indenture, Opinion of Counsel or written order or any other
document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 14.05 at or
prior to the time of authentication of each Debt Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security of such
series to be issued; provided, that any subsequent request by the Company to the
Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that are identical to the Debt Securities issued in the first
issuance of Debt Securities of such series.
A Company Order delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph, may provide that Debt
Securities that are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time upon the telephonic
or written order of Persons designated in such written order (any such
telephonic instructions to be promptly confirmed in writing by such Person) and
<PAGE>45
that such Persons are authorized to determine, consistent with the Officers'
Certificate, supplemental Indenture or resolution of the Board of Directors
relating to such written order, such terms and conditions of such Debt
Securities as are specified in such Officers' Certificate, supplemental
Indenture or such resolution.
Section 2.17. DEFAULTED INTEREST.
(a) Any interest on any Debt Security of a particular series which is
payable, but is not punctually paid or duly provided for, on the dates and
in the manner provided in the Debt Securities of such series and in this
Indenture (herein called "Defaulted Interest") shall, if such Debt Security
is a Registered Security, forthwith cease to be payable to the Registered
Holder thereof on the relevant record date by virtue of having been such
Registered Holder, and such Defaulted Interest (plus interest on such
Defaulted Interest to the extent lawful) may be paid by the Company, at its
election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall promptly notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each such Registered Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
<PAGE>46
shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first class postage
pre-paid, to each Holder thereof at its address as it appears in the
Security Register, not less than 10 days prior to such special record
date.
Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities of such series are registered at the close of business on
such special record date. In case a Coupon Security of any such series
is surrendered in exchange for a Registered Security of such series
after the close of business (at an office or agency in a Place of
Payment for such series) on any special record date and before the
opening of business (at such office or agency) on the related proposed
date of payment of Defaulted Interest, such Coupon Security shall be
surrendered without the Coupon relating to such proposed date of
payment, and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Coupon Security, but will be payable only to the
Holder of such Coupon when due in accordance with the provisions of
this Indenture.
(ii) The Company may make payment of any Defaulted Interest on
the Registered Securities of such series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
<PAGE>47
which the Registered Securities of such series may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by
the Trustee.
(b) Any Defaulted Interest payable in respect of Bearer Securities of
any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities
of such series, and notice of the payment date therefor shall be given by
the Trustee, in the name and at the expense of the Company, in the manner
provided in Section 14.03 not more than 25 days and not less than 20 days
prior to the date of the proposed payment.
Section 2.18. JUDGMENTS. The Company may provide pursuant to Section 2.03
for Debt Securities of any series that
(a) the obligation, if any, of the Company to pay the principal of,
and premium, if any, and interest on, the Debt Securities of any series in
a Foreign Currency or Dollars (the "Designated Currency") as may be
specified pursuant to Section 2.03 is of the essence and agrees that, to
the fullest extent possible under applicable law, judgments in respect of
Debt Securities of such series shall be given in the Designated Currency;
(b) the obligation of the Company to make payments in the Designated
Currency of the principal of, and premium, if any, and interest on, such
Debt Securities shall, notwithstanding any payment in any other Currency
(whether pursuant to a judgment or otherwise), be discharged only to the
extent of the amount in the Designated Currency that the Holder receiving
such payment may, in accordance with normal banking procedures, purchase
with the sum paid in such other Currency (after any premium and cost of
<PAGE>48
exchange) on the business day in the country of issue of the Designated
Currency or in the international banking community (in the case of a
composite currency) immediately following the day on which such Holder
receives such payment;
(c) if the amount in the Designated Currency that may be so purchased
for any reason falls short of the amount originally due, the Company shall
pay such additional amounts as may be necessary to compensate for such
shortfall; and
(d) any obligation of the Company not discharged by such payment shall
be due as a separate and independent obligation and, until discharged as
provided herein, shall continue in full force and effect.
Section 2.19. CUSIP NUMBERS. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the accuracy
of such numbers either as printed on the Securities or contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the "CUSIP"
numbers.
ARTICLE III
REDEMPTION OF DEBT SECURITIES
Section 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Debt Securities of any series that are redeemable
<PAGE>49
before their Stated Maturity except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.
Section 3.02. TAX REDEMPTION; SPECIAL TAX REDEMPTION.
(a) Unless otherwise specified pursuant to Section 2.03, Bearer
Securities of any series may be redeemed at the option of the Company in
whole, but not in part, at any time, on giving not less than 30 or more
than 60 days' notice in accordance with Section 3.03 (which notice shall be
irrevocable), at the redemption price thereof (calculated without premium),
if the Company has or will become obligated to pay additional interest on
such Bearer Securities pursuant to Section 4.06 as a result of any change
in, or amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or any change in the application or official
interpretation of such laws, regulations or rulings, which change or
amendment becomes effective on or after the date on which any Person
(including any Person acting as underwriter, broker or dealer) agrees to
purchase any of such Bearer Securities pursuant to their original issuance,
and such obligation cannot be avoided by the Company taking reasonable
measures available to it; provided, that no such notice of redemption shall
be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to pay such additional interest were a payment
in respect of the Bearer Securities of that series then due. Prior to the
publication of any notice of redemption pursuant to this Section 3.02(a),
the Company shall deliver to the Trustee (i) an Officers' Certificate
stating that the Company is entitled to effect such redemption and setting
forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred and (ii) an Opinion of
Counsel to the effect that the Company has or will become obligated to pay
such additional interest as a result of such change or amendment.
<PAGE>50
(b) Unless otherwise specified pursuant to Section 2.03, if the
Company shall determine that any payment made outside the United States by
the Company or any of its paying agents in respect of any Bearer Security
or Coupon would, under any present or future laws or regulations of the
United States, be subject to any certification, documentation, information
or other reporting requirement of any kind, the effect of which requirement
is the disclosure to the Company, any paying agent or any governmental
authority of the nationality, residence or identity of a beneficial owner
of such Bearer Security or Coupon that is a United States Alien (other than
such a requirement (i) that would not be applicable to a payment made by
the Company or any one of its paying agents (A) directly to the beneficial
owner or (B) to a custodian, nominee or other agent of the beneficial
owner, or (ii) that can be satisfied by such custodian, nominee or other
agent certifying to the effect that the beneficial owner is a United States
Alien; provided, that, in any case referred to in clause (i)(B) or (ii),
payment by the custodian, nominee or agent to the beneficial owner is not
otherwise subject to any such requirement), then the Company shall elect
either (A) to redeem such Bearer Security or Coupon in whole, but not in
part, at the redemption price thereof (calculated without premium) or (B)
if the conditions of the next succeeding paragraph are satisfied, to pay
the additional interest specified in such paragraph. The Company shall make
such determination as soon as practicable and publish prompt notice thereof
(the "Determination Notice"), stating the effective date of such
certification, documentation, information or other reporting requirement,
whether the Company elects to redeem the Bearer Security or Coupon or to
pay the additional interest specified in the next succeeding paragraph and
(if applicable) the last date by which the redemption of the Bearer
Security or Coupon must take place, as provided in the next succeeding
sentence. If any Bearer Security or Coupon is to be redeemed pursuant to
this paragraph, the redemption shall take place on such date, not later
than one year after the publication of the Determination Notice, as the
<PAGE>51
Company shall specify by notice given to the Trustee at least 60 days
before the redemption date.
Notice of such redemption shall be given by the Company to the Holders
of the Bearer Security or Coupon not more than 60 days or less than 30 days
prior to the redemption date. Notwithstanding the foregoing, the Company
shall not so redeem the Bearer Security or Coupon if the Company shall
subsequently determine, not less than 30 days prior to the redemption date,
that subsequent payments on the Bearer Security or Coupon would not be
subject to any such certification, documentation, information or other
reporting requirement, in which case the Company shall publish prompt
notice of such subsequent determination, and any earlier redemption notice
given pursuant to this paragraph shall be revoked and of no further effect.
Prior to the publication of any Determination Notice pursuant to this
paragraph, the Company shall deliver to the Trustee (1) an Officers'
Certificate stating that the Company is entitled to make such determination
and setting forth a statement of facts showing that the conditions
precedent to the obligation of the Company to redeem the Bearer Security or
Coupon or to pay the additional interest specified in the next succeeding
paragraph have occurred and (2) an Opinion of Counsel to the effect that
such conditions have occurred.
If and so long as the certification, documentation, information or
other reporting requirement referred to in the preceding paragraphs would
be fully satisfied by payment of a backup withholding tax or similar
charge, the Company may elect to pay as additional interest such amounts
as may be necessary so that every net payment made outside the United
States following the effective date of such requirement by the Company or
any of its paying agents in respect of any Bearer Security or Coupon of
which the beneficial owner is a United States Alien (but without any
requirement that the nationality, residence or identity of such beneficial
owner be disclosed to the Company, any paying agent or any governmental
<PAGE>52
authority),after deduction or withholding for or on account of such backup
withholding tax or similar charge that (x) would not be applicable in the
circumstances referred to in the parenthetical clause of the first
sentence of the first paragraph of this Section 3.02(b) or (y) is imposed
as a result of presentation of any such Bearer Security or Coupon for
payment more than 15 days after the date on which such payment became due
and payable or on which payment thereof was duly provided for, whichever
occurred later, will not be less than the amount provided in any such
Bearer Security or Coupon to be then due and payable. If the Company
elects to pay additional interest pursuant to this paragraph, the Company
shall have the right to redeem the Bearer Security or Coupon at any time
in whole, but not in part, at the redemption price thereof (calculated
without premium), subject to the provisions of the immediately preceding
paragraph. If the Company elects to pay additional interest pursuant to
this paragraph and the condition specified in the first sentence of this
paragraph should no longer be satisfied, then the Company shall redeem the
Bearer Security or Coupon in whole, but not in part, at the redemption
price thereof (calculated without premium), subject to the provisions of
the immediately preceding paragraph. Any redemption payments made by the
Company pursuant to the two immediately preceding sentences shall be
subject to the continuing obligation of the Company to pay additional
interest pursuant to this paragraph. If the Company elects to, or is
required to, redeem the Bearer Security or Coupon pursuant to this
paragraph, it shall publish prompt notice thereof. If the Bearer Security
or Coupon is to be redeemed pursuant to this paragraph, the redemption
shall take place on such date, not later than one year after publication of
the notice of redemption, as the Company shall specify by notice to the
Trustee at least 60 days prior to the redemption date.
Section 3.03. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. In case
the Company shall desire to exercise the right to redeem all or, as the case may
be, any part of the Debt Securities of any series in accordance with their
<PAGE>53
terms, a resolution of the Board of Directors of the Company or a supplemental
Indenture, the Company shall fix a date for redemption and shall give notice of
such redemption at least 30 and not more than 60 days prior to the date fixed
for redemption to the Holders of Debt Securities of such series to be
redeemed as a whole or in part, in the manner provided in Section 14.03. The
notice if given in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives such notice. In any
case, failure to give such notice or any defect in the notice to the Holder of
any Debt Security of a series designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security of such series.
Each such notice of redemption shall specify
(a) the date fixed for redemption,
(b) the redemption price at which Debt Securities of such series are
to be redeemed,
(c) the Place or Places of Payment that payment will be made upon
presentation and surrender of such Debt Securities,
(d) that the redemption is for a sinking fund payment (if applicable),
(e) that, unless otherwise specified in such notice, Coupon Securities
of any series, if any, surrendered for redemption must be accompanied by
all Coupons maturing subsequent to the date fixed for redemption, failing
which the amount of any such missing Coupon or Coupons will be deducted
from the redemption price,
(f) if the Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
<PAGE>54
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on the applicable redemption date pursuant to Section 2.15(c) or
otherwise, the last date on which such exchanges may be made,
(g) that, if the Company defaults in making such redemption payment or
if the Debt Securities of that series are subordinated pursuant to the
terms of Article XII, the paying agent is prohibited from making such
payment pursuant to the terms of this Indenture,
(h) that on and after said date any interest thereon or on the
portions thereof to be redeemed will cease to accrue,
(i) that in the case of Original Issue Discount Securities original
issue discount accrued after the date fixed for redemption will cease to
accrue, the terms of the Debt Securities of that series pursuant to which
the Debt Securities of that series are being redeemed, and
(j) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Debt
Securities of that series.
If less than all the Debt Securities of a series are to be redeemed the
notice of redemption shall specify the CUSIP numbers of the Debt Securities of
that series to be redeemed. In case any Debt Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debt Security, a new Debt
Security or Debt Securities of that series in principal amount equal to the
unredeemed portion thereof, and in the case of a Bearer Security with
appropriate Coupons, if any, will be issued.
<PAGE>55
At least 60 days before the redemption date unless the Trustee consents to
a shorter period, the Company shall give notice to the Trustee of the redemption
date, the principal amount of Debt Securities to be redeemed and the series and
terms of the Debt Securities pursuant to which such redemption will occur. Such
notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with the
conditions herein. If fewer than all the Debt Securities of a series are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall be not less than 15
days after the date of notice to the Trustee.
On or prior to the redemption date for any Registered Securities, the
Company shall deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust) an
amount of money in the Currency in which such Debt Securities are denominated
(except as provided pursuant to Section 2.03) sufficient to pay the redemption
price of such Registered Securities or any portions thereof that are to be
redeemed on that date. In the case of any redemption pertaining to Bearer
Securities or Coupon Securities, the Company shall, no later than the business
day prior to such redemption date, deposit with the Trustee or with a paying
agent (other than the Company) an amount of money in the Currency in which such
Debt Securities are denominated (except as provided pursuant to Section 2.03)
sufficient to pay the redemption price of such Bearer or Coupon Securities or
any portion thereof that are to be redeemed on the redemption date.
If less than all the Debt Securities of like tenor and terms of a series
are to be redeemed (other than pursuant to mandatory sinking fund redemptions)
the Trustee shall select, on a pro rata basis, by lot or by such other method as
in its sole discretion it shall deem appropriate and fair, the Debt Securities
of that series or portions thereof (in multiples of $1,000) to be redeemed. In
any case where more than one Registered Security of such series is registered in
the same name, the Trustee in its discretion may treat the aggregate principal
<PAGE>56
amount so registered as if it were represented by one Registered Security of
such series. The Trustee shall promptly notify the Company in writing of the
Debt Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed. If
any Debt Security called for redemption shall not be so paid upon surrender
thereof on such redemption date, the principal, premium, if any, and interest
shall bear interest until paid from the redemption date at the rate borne by the
Debt Securities of that series. If less than all the Debt Securities of unlike
tenor and terms of a series are to be redeemed, the particular Debt Securities
to be redeemed shall be selected by the Company. Provisions of this Indenture
that apply to Debt Securities called for redemption also apply to portions of
Debt Securities called for redemption.
Section 3.04. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If notice
of redemption has been given as provided in Section 3.03, the Debt Securities or
portions of Debt Securities of the series with respect to which such notice has
been given shall become due and payable on the date and at the Place or Places
of Payment stated in such notice at the applicable redemption price, together
with any interest accrued to the date fixed for redemption, and on and after
said date (unless the Company shall default in the payment of such Debt
Securities at the applicable redemption price, together with any interest
accrued to said date) any interest on the Debt Securities or portions of Debt
Securities of any series so called for redemption shall cease to accrue, any
original issue discount in the case of Original Issue Discount Securities shall
cease to accrue and any Coupons for such interest appertaining to any Coupon
Securities to be redeemed, except to the extent described below, shall be void.
On presentation and surrender of such Debt Securities at the Place or
Places of Payment in said notice specified, the said Debt Securities or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with any interest accrued thereon to the
date fixed for redemption.
<PAGE>57
If any Coupon Security surrendered for redemption shall not be accompanied
by all Coupons appertaining thereto maturing on or after the applicable
redemption date, the redemption price for such Coupon Security may be reduced by
an amount equal to the face amount of all such missing Coupons. If thereafter
the Holder of such Coupon shall surrender to any paying agent outside the United
States any such missing Coupon in respect of which a deduction shall have been
made from the redemption price, such Holder shall be entitled to receive the
amount so deducted. The surrender of such missing Coupon or Coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any paying
agent harmless.
Any Debt Security that is to be redeemed only in part shall be surrendered
at the corporate trust office or such other office or agency of the Company as
is specified pursuant to Section 2.03 (in the case of Registered Securities) and
at the principal [London] office of the Trustee or such other office or agency
of the Company outside the United States as is specified pursuant to Section
2.03 (in the case of Bearer Securities) with, if the Company, the Registrar or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Registrar and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing, and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Debt Security without service charge, a new Debt Security or Debt
Securities of the same series, of like tenor and form, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Debt Security
so surrendered, and in the case of a Coupon Security, with appropriate Coupons
attached; except that if a Global Security is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the Depositary for
such Global Security, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the
<PAGE>58
principal of the Global Security so surrendered. In the case of a Debt Security
providing appropriate space for such notation, at the option of the Holder
thereof, the Trustee, in lieu of delivering a new Debt Security or Debt
Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.
Section 3.05. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount of
any sinking fund payment provided for by the terms of Debt Securities of any
series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of Debt Securities of
any series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as an "optional sinking fund payment".
Unless otherwise specified in the terms of Debt Securities of any series or
the related resolution or supplemental indenture, in lieu of making all or any
part of any mandatory sinking fund payment with respect to any Debt Securities
of such series in cash, the Company may at its option (a) deliver to the Trustee
Debt Securities of that series (together with the unmatured Coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the Company
or (b) receive credit for the principal amount of Debt Securities of that series
that have been redeemed either at the election of the Company pursuant to the
terms of such Debt Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debt Securities, resolution
or supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund, and the amount of such mandatory sinking fund
payment shall be reduced accordingly.
<PAGE>59
Section 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less than
60 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, any resolution or supplemental Indenture,
the portion thereof, if any, that is to be satisfied by payment of cash in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) and the portion thereof, if any, that is to
be satisfied by delivering and crediting Debt Securities of that series pursuant
to this Section 3.06 (which Debt Securities, if not previously redeemed, will
accompany such certificate) and whether the Company intends to exercise its
right to make any permitted optional sinking fund payment with respect to such
series. Such certificate shall also state that no Event of Default has occurred
and is continuing with respect to such series. Such certificate shall be
irrevocable and upon its delivery the Company shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Company to deliver such
certificate (or to deliver the Debt Securities and Coupons, if any, specified in
this paragraph) shall not constitute a Default, but such failure shall require
that the sinking fund payment due on the next succeeding sinking fund payment
date for that series shall be paid entirely in cash and shall be sufficient to
redeem the principal amount of such Debt Securities subject to a mandatory
sinking fund payment without the option to deliver or credit Debt Securities as
provided in this Section 3.06 and without the right to make any optional sinking
fund payment, if any, with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made in cash that
shall equal or exceed $100,000 (or a lesser sum if the Company shall so request)
with respect to the Debt Securities of any particular series shall be applied by
the Trustee on the sinking fund payment date on which such payment is made (or,
if such payment is made before a sinking fund payment date, on the sinking fund
<PAGE>60
payment date following the date of such payment) to the redemption of such Debt
Securities at the Redemption Price specified in such Debt Securities, resolution
or supplemental Indenture for operation of the sinking fund together with any
accrued interest to the date fixed for redemption. Any sinking fund moneys not
so applied or allocated by the Trustee to the redemption of Debt Securities
shall be added to the next cash sinking fund payment received by the Trustee for
such series and, together with such payment, shall be applied in accordance with
the provisions of this Section 3.06. Any and all sinking fund moneys with
respect to the Debt Securities of any particular series held by the Trustee on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
shall be applied by the Trustee, together with other moneys, if necessary, to be
deposited sufficient for the purpose, to the payment of the principal of the
Debt Securities of that series at its Stated Maturity.
The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in the last paragraph of
Section 3.03, and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 3.03, except that the notice of
redemption shall also state that the Debt Securities are being redeemed by
operation of the sinking fund. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.04.
At least one business day before each sinking fund payment date, the
Company shall pay to the Trustee (or, if the Company is acting as its own paying
agent, the Company shall segregate and hold in trust) in cash a sum in the
Currency in which the Debt Securities of such series are denominated (except as
provided pursuant to Section 2.03) equal to any interest accrued to the date
fixed for redemption of Debt Securities or portions thereof to be redeemed on
such sinking fund payment date pursuant to this Section 3.06.
<PAGE>61
The Trustee shall not redeem any Debt Securities of a series with sinking
fund moneys or mail any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
Default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the
time when any such Default or Event of Default shall occur and any moneys
thereafter paid into such sinking fund shall, during the continuance of such
Default or Event of Default, be held as security for the payment of such Debt
Securities; provided, however, that in case such Event of Default or Default
shall have been cured or waived as provided herein, such moneys shall thereafter
be applied on the next sinking fund payment date for such Debt Securities on
which such moneys may be applied pursuant to the provisions of this Section
3.06.
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. PAYMENT OF PRINCIPAL OF, AND PREMIUM, IF ANY, AND INTEREST
ON, DEBT SECURITIES. The Company, for the benefit of each series of Debt
Securities, will duly and punctually pay or cause to be paid the principal of,
and premium, if any, and interest on, each of the Debt Securities and pay any
Coupons at the place, at the respective times and in the manner provided herein,
in the Debt Securities and in the Coupons. Each installment of interest on the
Debt Securities may be paid by mailing checks for such interest payable to the
<PAGE>62
Person entitled thereto pursuant to Section 2.07(a) to the address of such
Person as it appears on the Debt Security Register or by a wire transfer as
provided in Section 2.12. Any interest due on Coupon Securities on or before the
Stated Maturity of the related Debt Security, other than additional interest, if
any, payable as provided in Section 4.06 in respect of principal of, or premium,
if any, on such a Debt Security, shall be payable only upon presentation and
surrender of the several Coupons for such interest installments as are evidenced
thereby as they severally mature.
Principal, premium and interest of Debt Securities of any series shall be
considered paid on the date due if on such date the Trustee or any paying agent
holds in accordance with this Indenture money sufficient to pay in the Currency
in which the Debt Securities of such series are denominated (except as provided
pursuant to Section 2.03) all principal, premium and interest then due and, in
the case of Debt Securities subordinated pursuant to the terms of Article XII,
the Trustee or such paying agent, as the case may be, is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Debt Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF
TRANSFER, EXCHANGE AND PAYMENT OF DEBT SECURITIES. The Company will maintain in
each Place of Payment for any series of Debt Securities and Coupons, if any, an
office or agency where Debt Securities and Coupons of such series (but, except
as otherwise provided in Section 2.12, unless such Place of Payment is located
outside the United States, not Bearer Securities or Coupons) may be presented or
surrendered for payment, where Debt Securities of such series may be surrendered
for transfer or exchange and where notices and demands to or upon the Company in
respect of the Debt Securities and Coupons of such series and this Indenture may
<PAGE>63
be served. So long as any Bearer Securities of any series remain outstanding,
the Company will maintain for such purposes one or more offices or agencies
outside the United States in such city or cities specified pursuant to Section
2.03 and, if any Bearer Securities are listed on a securities exchange that
requires an office or agency for the payment of principal of, and premium, if
any, or interest on, such Bearer Securities in a location other than the
location of an office or agency specified pursuant to Section 2.03, the Company
will maintain for such purposes an office or agency in such location so long as
any Bearer Securities are listed on such securities exchange and such exchange
so requires. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the corporate trust
office of the Trustee (in the case of Registered Securities) and at the
principal [London] office of the Trustee or such other Place for Payment
outside the United States specified pursuant to Section 2.03 (in the case of
Bearer Securities), and the Company hereby appoints the Trustee as its agent
to receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate different or additional
offices or agencies to be maintained for such purposes (in or outside of such
Place of Payment), and may from time to time rescind any such designation;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligations described in the preceding paragraph. The
Company will give prompt written notice to the Trustee of any such additional
designation or rescission of designation and any change in the location of any
such different or additional office or agency.
Section 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.08, a Trustee so that there
<PAGE>64
shall at all times be a Trustee hereunder with respect to each series of Debt
Securities.
Section 4.04. DUTIES OF PAYING AGENTS, ETC.
(a) The Company shall cause each paying agent, if any, other than the
Trustee, to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this
Section 4.04, that it will
(i) hold all sums held by it as such agent for the payment of the
principal of, and premium, if any, or interest on, the Debt Securities
of any series and the payment of any related Coupons (whether such
sums have been paid to it by the Company or by any other obligor on
the Debt Securities or Coupons of such series) in trust for the
benefit of the Holders of the Debt Securities and Coupons of such
series;
(ii) give the Trustee notice of any failure by the Company (or by
any other obligor on the Debt Securities or Coupons of such series) to
make any payment of the principal of, and premium, if any, or interest
on, the Debt Securities of such series or any payment on any related
Coupons when the same shall be due and payable; and
(iii) at any time during the continuance of an Event of Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held by it as such agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, and premium, if any, or interest
on, the Debt Securities and Coupons, if any, of any series, set aside,
segregate and hold in trust for the benefit of the Holders of the Debt
<PAGE>65
Securities and Coupons of such series a sum sufficient to pay such
principal, premium, if any, or interest so becoming due. The Company will
promptly notify the Trustee of any failure by the Company to take such
action or the failure by any other obligor on such Debt Securities or
Coupons to make any payment of the principal of, and premium, if any, or
interest on, such Debt Securities or Coupons when the same shall be due and
payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by it or any paying agent, as
required by this Section 4.04, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
paying agent.
(d) Whenever the Company shall have one or more paying agents with
respect to any series of Debt Securities and Coupons, it will, prior to
each due date of the principal of, and premium, if any, or interest on, any
Debt Securities of such series, deposit with any such paying agent a sum
sufficient to pay the principal, premium or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless any such paying agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
(e) Anything in this Section 4.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.04 is subject
to the provisions of Section 11.05.
Section 4.05. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will deliver
to the Trustee, on or before a date not more than four months after the end of
each fiscal year of the Company (currently on a calendar year basis) ending
<PAGE>66
after the date hereof, an Officers' Certificate stating, as to each officer
signing such certificate, that
(a) in the course of his performance of his duties as an officer of
the Company he would normally have knowledge of any Default,
(b) whether or not to the best of his knowledge any Default occurred
during such year and
(c) if to the best of his knowledge the Company is in Default,
specifying all such Defaults, their status and what action the Company is
taking or proposes to take with respect thereto.
The Company also shall comply with Section 314(a)(4) of the Trust Indenture Act.
Section 4.06. PAYMENT OF ADDITIONAL INTEREST. Unless otherwise provided
pursuant to Section 2.03, the provisions of this Section 4.06 shall be
applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest to the Holder of any Bearer Security or Coupon
that is a United States Alien such amounts as may be necessary so that every net
payment on such Bearer Security or Coupon, after deduction or withholding for or
on account of any present or future tax, assessment or other governmental charge
imposed upon or as a result of such payment by the United States (or any
political subdivision or taxing authority thereof or therein), will not be less
than the amount provided in such Bearer Security or Coupon to be then due and
payable. However, the Company will not be required to make any such payment of
additional interest for or on account of:
(a) any tax, fee, assessment or other governmental charge that would
not have been imposed but for (i) the existence of any present or former
<PAGE>67
connection between such Holder (or between a fiduciary, settlor or
beneficiary of, or a Person holding a power over, such Holder, if such
Holder is an estate or a trust, or a member or shareholder of such Holder,
if such Holder is a partnership or corporation) and the United States,
including such Holder (or such fiduciary, settlor, beneficiary, Person
holding a power, member or shareholder) being or having been a citizen or
resident thereof or being or having been engaged in trade or business or
present therein or having or having had a permanent establishment therein
or (ii) such Holder's past or present status for United States federal
income tax purposes as a personal holding company, foreign personal holding
company or private foundation or other tax-exempt organization with respect
to the United States or as a corporation that accumulates earnings to avoid
United States federal income tax;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or other governmental charge;
(c) any tax, fee, assessment or other governmental charge that would
not have been imposed but for the presentation by the Holder of a Bearer
Security or Coupon for payment more than 15 days after the date on which
such payment became due and payable or on which payment thereof was duly
provided for, whichever occurs later;
(d) any tax, fee, assessment or other governmental charge that is
payable otherwise than by deduction or withholding from a payment on a
Bearer Security or Coupon;
(e) any tax, fee, assessment or other governmental charge that would
not have been imposed but for a failure to comply with applicable
certification, documentation, information or other reporting requirement
concerning the nationality, residence, identity or connection with the
United States of the Holder or beneficial owner of a Bearer Security or
<PAGE>68
Coupon if, without regard to any tax treaty, such compliance is required by
statute or regulation of the United States as a precondition to relief or
exemption from such tax, assessment or other governmental charge; or
(f) any tax, fee, assessment or other governmental charge imposed on a
Holder that actually or constructively owns ten percent or more of the
combined voting power of all classes of stock of the Company or that is a
controlled foreign corporation related to the Company through stock
ownership; nor shall additional interest be paid with respect to a payment
on a Bearer Security or Coupon to a Holder that is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the
extent a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner would not have been entitled to
the additional interest had such beneficiary, settlor, member or beneficial
owner been the Holder of such Bearer Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of, or premium, if any, or interest on, any Debt Security or
payment with respect to any Coupon of any series, such mention shall be deemed
to include mention of the payment of additional interest provided for in the
terms of such Debt Securities and this Section 4.06 to the extent that, in such
context, additional interest is, was or would be payable in respect thereof
pursuant to the provisions of this Section 4.06 and express mention of the
payment of additional interest (if applicable) in any provisions hereof shall
not be construed as excluding additional interest in those provisions hereof
where such express mention is not made.
If the payment of additional interest becomes required in respect of the
Debt Securities or Coupons of a series, at least ten days prior to the first
interest payment date with respect to which such additional interest will be
payable (or if the Debt Securities of that series will not bear interest prior
to its Stated Maturity, the first day on which a payment of principal, and
<PAGE>69
premium, if any, is made and on which such additional interest will be payable),
and at least ten days prior to each date of payment of principal, and premium,
if any, or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and each paying agent with an Officers' Certificate that shall specify
by country the amount, if any, required to be withheld on such payments to
Holders of Debt Securities or Coupons that are United States Aliens, and the
Company will pay to the Trustee or such paying agent the additional interest, if
any, required by the terms of such Debt Securities and this Section 4.06. The
Company covenants to indemnify the Trustee and any paying agent for, and to hold
them harmless against, any and all loss, liability or expense reasonably
incurred without negligence or bad faith on their part arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section 4.06.
Section 4.07. FURTHER INSTRUMENTS AND ACTS. The Company will, upon request
of the Trustee, execute and deliver such further instruments and do such further
acts as may reasonably be necessary or proper to carry out more effectually the
purposes of this Indenture.
Section 4.08. EXISTENCE. Subject to Article X, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
ARTICLE V
HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
<PAGE>70
Section 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF HOLDERS; PRESERVATION OF INFORMATION. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee with respect
to the Registered Securities of each series:
(a) not more than 15 days after each record date with respect to the
payment of interest, if any, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Registered Holders as
of such record date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and contents as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee shall be the Registrar, such
lists shall not be required to be furnished.
The Company shall also be required to furnish to the Trustee at all such
times set forth above all information in the possession or control of the
Company or any of its paying agents other than the Trustee as to the names and
addresses of the Bearer Holders of all series; provided, however, that the
Company shall have no obligation to investigate any matter relating to any
Bearer Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders (i)
contained in the most recent list furnished to it as provided in this Section
5.01 or (ii) received by it in the capacity of paying agent or Registrar (if so
acting) hereunder.
<PAGE>71
The Trustee may destroy any list furnished to it as provided in this
Section 5.01 upon receipt of a new list so furnished.
Section 5.02. COMMUNICATIONS TO HOLDERS. Holders may communicate pursuant
to Section 312(b) of the Trust Indenture Act with other Holders with respect to
their rights under this Indenture or the Debt Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of Section
312(c) of the Trust Indenture Act.
Section 5.03. REPORTS BY COMPANY.
(a) The Company covenants and agrees, and any obligor hereunder shall
covenant and agree, to file with the Trustee and the Holders (in the manner
and to the extent provided in Section 5.04), within 15 days after the
Company or such obligor, as the case may be, is required to file the same
with the Securities and Exchange Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as said Commission may from time to time
by rules and regulations prescribe) which the Company or such obligor, as
the case may be, may be required to file with said Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company or such
obligor, as the case may be, is not required to file information, documents
or reports pursuant to either of such Sections, then to file with the
Trustee, the Holders (in the manner and to the extent provided in Section
5.04) and said Commission, in accordance with rules and regulations
prescribed from time to time by said Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Exchange Act in respect of a security listed
and registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations.
<PAGE>72
(b) The Company covenants and agrees, and any obligor hereunder shall
covenant and agree, to file with the Trustee, the Holders (in the manner
and to the extent provided in Section 5.04) and the Securities and Exchange
Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents,
and reports with respect to compliance by the Company or such obligor, as
the case may be, with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.
Section 5.04. REPORTS BY TRUSTEE. As promptly as practicable after each
January 1 beginning with the January 1 following the date of this Indenture, and
in any event prior to February 15 in each year, the Trustee shall mail to each
Holder a brief report dated as of January 1 that complies with Section 313(a) of
the Trust Indenture Act. The Trustee also shall comply with Section 313(b) of
the Trust Indenture Act.
Reports pursuant to this Section 5.04 shall be transmitted by mail:
(a) to all Registered Holders, as the names and addresses of such
Holders appear in the Debt Security Register;
(b) to such Bearer Holders of any series as have, within two years
preceding such transmission, filed their names and addresses with the
Trustee for such series for that purpose; and
(c) except in the cases of reports under Section 313(b)(2) of the
Trust Indenture Act, to each Holder of a Debt Security of any series whose
name and address appear in the information preserved at the time by the
Trustee in accordance with Section 5.02.
<PAGE>73
A copy of each report at the time of its mailing to Holders shall be filed
with the Securities and Exchange Commission and each stock exchange (if any) on
which the Debt Securities of any series are listed. The Company agrees to notify
promptly the Trustee whenever the Debt Securities of any series become listed on
any stock exchange and of any delisting thereof.
Section 5.05. RECORD DATES FOR ACTION BY HOLDERS. If the Company shall
solicit from the holders of Debt Securities of any series any action (including
the making of any demand or request, the giving of any direction, notice,
consent or waiver or the taking of any other action), the Company may, at its
option, by resolution of the Board of Directors, fix in advance a record date
for the determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's discretion. If such a record date is fixed, such
action may be sought or given before or after the record date, but only the
Holders of Debt Securities of record at the close of business on such record
date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of
such series Outstanding have authorized or agreed or consented to such action,
and for that purpose the Debt Securities of such series Outstanding shall be
computed as of such record date.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
Section 6.01. EVENTS OF DEFAULT. If any one or more of the following shall
have occurred and be continuing with respect to Debt Securities of any series
(each of the following, an "Event of Default"):
(a) default in the payment of any installment of interest upon any
Debt Securities of that series or any payment with respect to the related
Coupons, if any, as and when the same shall become due and payable, whether
<PAGE>74
or not such payment shall be prohibited by Article XII, if applicable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of or premium, if any, on
any Debt Securities of that series as and when the same shall become due
and payable, whether at maturity, upon redemption, by declaration, upon
required repurchase or otherwise, whether or not such payment shall be
prohibited by Article XII, if applicable; or
(c) default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due
and payable; or
(d) failure on the part of the Company to comply with Article X; or
(e) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities of that series, in any resolution of the Board of Directors
authorizing the issuance of that series of Debt Securities, in this
Indenture with respect to such series or in any supplemental Indenture with
respect to such series (other than a covenant a default in the performance
of which is elsewhere in this Section specifically dealt with), continuing
for a period of 90 days after the date on which written notice specifying
such failure and requiring the Company to remedy the same shall have been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time
Outstanding; or
(f) the Company or any of its Significant Subsidiaries that Guarantees
the payment of a series of Debt Securities shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the
<PAGE>75
United States Code or any other federal or state bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert
within the time and in the manner prescribed by law, any such proceeding or
the filing of any such petition, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any such Significant Subsidiary or for a
substantial part of its property, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) admit in
writing its inability to pay its debts as they become due, (vii) take
corporate action for the purpose of effecting any of the foregoing, or
(viii) take any comparable action under any foreign laws relating to
insolvency; or
(g) the entry of an order or decree by a court having competent
jurisdiction for (i) relief in respect of the Company or any of its
Significant Subsidiaries that guarantees the payment of a series of Debt
Securities or a substantial part of any of their property under Title 11 of
the United States Code or any other federal or state bankruptcy, insolvency
or similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any such Significant
Subsidiary or for a substantial part of any of their property (except any
decree or order appointing such official of any Significant Subsidiary
pursuant to a plan under which the assets and operations of such
Significant Subsidiary are transferred to or combined with another
Subsidiary or Subsidiaries of the Company or to the Company) or (iii) the
winding-up or liquidation of the Company or any such Significant Subsidiary
(except any decree or order approving or ordering the winding up or
liquidation of the affairs of a Significant Subsidiary pursuant to a plan
under which the assets and operations of such Significant Subsidiary are
transferred to or combined with another Subsidiary or Subsidiaries of the
Company or to the Company); and such order or decree shall continue
<PAGE>76
unstayed and in effect for 60 consecutive days; or any similar relief is
granted under any foreign laws and the order or decree stays in effect for
60 consecutive days; or
(h) any judgment or decree for the payment of money in excess of
$20,000,000 or its Dollar Equivalent at the time is entered against the
Company or any Significant Subsidiary of the Company that guarantees the
payment of a series of Debt Securities by a court or courts of competent
jurisdiction, which judgment is not covered by insurance, and is not
discharged and either (i) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (ii) there is a period of 90
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed and, in the case of (i) or (ii), such default continues for 10 days
after the date on which written notice specifying such failure and
requiring the Company to remedy the same shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Debt Securities of that series at the time
Outstanding; or
(i) any other Event of Default provided with respect to Debt
Securities of that series;
then and in each and every case that an Event of Default described in
clause (a), (b), (c), (d), (e), (h) or (i) with respect to Debt Securities
of that series at the time Outstanding occurs and is continuing, unless the
principal of and interest on all the Debt Securities of that series shall
have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Debt Securities of
that series then Outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by Holders), may declare the principal of (or,
<PAGE>77
if the Debt Securities of that series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms of that series) and interest on all the Debt Securities of that
series to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in
this Indenture or in the Debt Securities or Coupons appertaining thereto of
that series contained to the contrary notwithstanding. If an Event of
Default described in clause (f) or (g) occurs, then and in each and every
such case, unless the principal of and interest on all the Debt Securities
shall have become due and payable, the principal of (or, if any Debt
Securities are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms thereto) and interest on
all the Debt Securities then Outstanding hereunder shall ipso facto become
and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holders, anything in this Indenture or in
the Debt Securities contained to the contrary notwithstanding.
The Holders of a majority in aggregate principal amount of the Debt
Securities of a particular series by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree already rendered and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. Upon any such rescission, the parties hereto
shall be restored respectively to their several positions and rights hereunder,
and all rights, remedies and powers of the parties hereto shall continue as
though no such proceeding had been taken.
In case the Trustee or any Holder shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such Holder, then and in
every such case the parties hereto shall be restored respectively to their
<PAGE>78
several positions and rights hereunder, and all rights, remedies and powers of
the parties hereto shall continue as though no such proceeding had been taken.
The foregoing Events of Default shall constitute Events of Default whatever
the reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
Section 6.02. COLLECTION OF INDEBTEDNESS BY TRUSTEE, ETC. If an Event of
Default occurs and is continuing, the Trustee, in its own name and as trustee of
an express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and unpaid
or enforce the performance of any provision of the Debt Securities of the
affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor upon the Debt Securities,
and the Coupons, if any, appertaining thereto, of such series (and collect in
the manner provided by law out of the property of the Company or any other
obligor upon the Debt Securities and Coupons of such series wherever situated
the moneys adjudged or decreed to be payable).
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor upon the Debt Securities and
Coupons, if any, of any series under Title 11 of the United States Code or any
other federal or state bankruptcy, insolvency or similar law, or in case a
receiver, trustee or other similar official shall have been appointed for its
property, or in case of any other similar judicial proceedings relative to the
Company or any other obligor upon the Debt Securities of any series, its
creditors or its property, the Trustee, irrespective of whether the principal of
Debt Securities and Coupons, if any, of any series shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
<PAGE>79
the Trustee shall have made any demand pursuant to the provisions of this
Section 6.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest (or, if the Debt Securities
of such series are Original Issue Discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) owing and
unpaid in respect of the Debt Securities and Coupons of such series, and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable compensation to
the Trustee, its agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of its negligence or bad faith) and of the Holders thereof allowed
in any such judicial proceedings relative to the Company, or any other obligor
upon the Debt Securities and Coupons of such series, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of such Holders and of the Trustee on their behalf, and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of such Holders to make payments to the Trustee, and, in the
event that the Trustee shall consent to the making of payments directly to such
Holders, to pay to the Trustee such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other reasonable expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith.
All rights of action and of asserting claims under this Indenture, or under
any of the Debt Securities and the Coupons, if any, appertaining thereto, of any
series, may be enforced by the Trustee without the possession of any such Debt
Securities or Coupons, or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment (except for any amounts payable to the Trustee pursuant
<PAGE>80
to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt
Securities or Coupons in respect of which such action was taken.
In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Section 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys or
other property collected by the Trustee pursuant to Section 6.02 with respect to
Debt Securities and Coupons, if any, of any series shall be applied, after
giving effect to the provisions of Article XII, if applicable, in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys or other property, upon presentation of the several Debt Securities
or Coupons of such series in respect of which moneys or other property have been
collected, and the notation thereon of the payment, if only partially paid, and
upon surrender thereof if fully paid:
FIRST: To the payment of all money due the Trustee pursuant to Section
7.06;
SECOND: In case the principal of the Outstanding Debt Securities in respect
of which such moneys have been collected shall not have become due, to the
payment of interest on the Debt Securities or Coupons of such series in the
order of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the rate or Yield to Maturity (in the case
of Original Issue Discount Debt Securities) borne by the Debt Securities or
<PAGE>81
Coupons of such series, such payments to be made ratably to the Persons entitled
thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Debt Securities in respect
of which such moneys have been collected shall have become due, by declaration
or otherwise, to the payment of the whole amount then owing and unpaid upon the
Debt Securities or Coupons of such series for principal and premium, if any, and
interest, with interest on the overdue principal and premium, if any, and (to
the extent that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) borne by the Debt Securities or Coupons
of such series; and, in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon the Debt Securities and Coupons of such
series, then to the payment of such principal and premium, if any, and interest,
without preference or priority of principal and premium, if any, over interest,
or of interest over principal and premium, if any, or of any installment of
interest over any other installment of interest, or of any Debt Security or
Coupon of such series over any Debt Security or Coupon of such series, ratably
to the aggregate of such principal and premium, if any, and interest; and
FOURTH: The remainder, if any, shall be paid to the Company, its successors
or assigns, or to whomsoever may be lawfully entitled to receive the same, or as
a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.03. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
Section 6.04. LIMITATION ON SUITS BY HOLDERS. No Holder of any Debt
Security or Coupon of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at law
<PAGE>82
or in equity or in bankruptcy or otherwise, upon or under or with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of an Event of Default with respect to Debt Securities of
that same series and of the continuance thereof and unless the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
of that series shall have made written request upon the Trustee to institute
such action or proceedings in respect of such Event of Default in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceedings and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 6.06; it being
understood and intended, and being expressly covenanted by the Holder of every
Debt Security or Coupon with every other Holder and the Trustee, that no one or
more Holders shall have any right in any manner whatever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any Holders, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all such Holders. For the protection and enforcement of the
provisions of this Section 6.04, each and every Holder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision in this Indenture, however, the right
of any Holder of any Debt Security or Coupon to receive payment of the principal
of, and premium, if any, and (subject to Section 2.12) interest on, such Debt
Security or Coupon, on or after the respective due dates expressed in such Debt
Security, and to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
<PAGE>83
Section 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF RIGHTS
NOT A WAIVER OF DEFAULT. All powers and remedies given by this Article VI to the
Trustee or to the Holders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Holders, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or of any
Holder to exercise any right or power accruing upon any Default occurring and
continuing as aforesaid, shall impair any such right or power, or shall be
construed to be a waiver of any such Default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy given by this
Article VI or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by the
Holders.
Section 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF DEBT
SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The Holders of a majority in
aggregate principal amount of the Debt Securities of any series at the time
Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Debt Securities
of such series; provided, however, that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture, and that
subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by counsel,
shall determine that the action so directed may not lawfully be taken, or if the
Trustee shall by a responsible officer or officers, determine that the action so
directed would involve it in personal liability or would be unjustly prejudicial
to Holders of Debt Securities of such series not taking part in such direction;
and provided, further, however, that nothing in this Indenture contained shall
impair the right of the Trustee to take any action deemed proper by the Trustee
<PAGE>84
and which is not inconsistent with such direction by such Holders. Prior to the
acceleration of the maturity of the Debt Securities of any series, as provided
in Section 6.01, the Holders of a majority in aggregate principal amount of the
Debt Securities of that series at the time Outstanding may on behalf of the
Holders of all the Debt Securities and any related Coupons of that series waive
any past Default or Event of Default and its consequences for that series
specified in the terms thereof as contemplated by Section 2.03, except (a) a
Default in the payment of the principal of, and premium, if any, or interest on,
any of the Debt Securities or in the payment of any related Coupon and (b) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder affected thereby. In case of any such waiver,
such Default shall cease to exist, any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture, and the
Company, the Trustee and the Holders of the Debt Securities of that series shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD SUCH NOTICE IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days
after the occurrence of a Default known to it with respect to a series of Debt
Securities or Coupons, if any, give to the Holders thereof, in the manner
provided in Section 14.03, notice of all Defaults with respect to such series
known to the Trustee, unless such Defaults shall have been cured or waived
before the giving of such notice; provided, that, except in the case of Default
in the payment of the principal of, or premium, if any, or interest on, any of
the Debt Securities or Coupons of such series or in the making of any sinking
fund payment with respect to the Debt Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a committee of directors or responsible
officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders thereof.
<PAGE>85
Section 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN SUITS
UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture agree,
and each Holder of any Debt Security or Coupon by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit in the manner and to the extent provided in the Trust Indenture Act,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 6.08 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than ten percent in
principal amount of the Outstanding Debt Securities of that series or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, or premium, if any, or interest on, any Debt Security or Coupon on
or after the due date for such payment expressed in such Debt Security or
Coupon.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. The Trustee, prior to
the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
<PAGE>86
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(a) this subsection shall not be construed to limit the effect of the
first paragraph of this Section 7.01;
(b) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all Events
of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
Debt Securities and Coupons, if any, of any series shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations with respect to such series as are specifically set forth
in this Indenture, and no implied covenants or obligations with
respect to such series shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture; but the Trustee
<PAGE>87
shall examine the evidence furnished to it pursuant to Section 5.03 to
determine whether or not such evidence conforms to the requirement of
this Indenture;
(iii) the Trustee shall not be liable for an error of judgment
made in good faith by a responsible officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iv) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the
Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of that series relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to Debt Securities of such
series.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 7.01:
<PAGE>88
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document (whether in its original
or facsimile form) believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Company Order (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its selection, and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders of Debt Securities or Coupons of any series
pursuant to the provisions of this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
<PAGE>89
(f) prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, approval or other paper or
document, unless requested in writing to do so by the Holders of a majority
in aggregate principal amount of the then Outstanding Debt Securities of a
series affected by such matter; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is not, in the opinion of the Trustee, reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as
a condition to so proceeding. The reasonable expense of every such
investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder; and
(h) if any property other than cash shall at any time be subject to a
Lien in favor of the Holders, the Trustee, if and to the extent authorized
by a receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax Liens or other prior Liens or encumbrances thereon.
Section 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN DEBT
SECURITIES. The recitals contained herein, in the Debt Securities (except the
<PAGE>90
Trustee's certificate of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debt Securities or Coupons, if any,
of any series. The Trustee shall not be accountable for the use or application
by the Company of any of the Debt Securities or of the proceeds thereof.
Section 7.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN DEBT SECURITIES.
The Trustee or any paying agent or Registrar, in its individual or any other
capacity, may become the owner or pledgee of Debt Securities or Coupons and
subject to the provisions of the Trust Indenture Act relating to conflicts of
interest and preferential claims may otherwise deal with the Company with the
same rights it would have if it were not Trustee, paying agent or Registrar.
Section 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Subject to
the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on
any moneys received by it hereunder. So long as no Event of Default shall have
occurred and be continuing, all interest allowed on any such moneys shall be
paid from time to time to the Company upon a Company Order.
Section 7.06. COMPENSATION AND REIMBURSEMENT. The Company covenants and
agrees to pay in Dollars to the Trustee from time to time, and the Trustee shall
be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and except as otherwise
expressly provided herein, the Company will pay or reimburse in Dollars the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
<PAGE>91
disbursements of its agents, attorneys and counsel and of all Persons not
regularly in its employ), except any such expense, disbursement or advances as
may arise from its negligence or bad faith. The Company also covenants to
indemnify in Dollars the Trustee and any predecessor Trustee for, and to hold it
harmless against, any and all loss, liability, claim, damage or expense incurred
without negligence, willful misconduct or bad faith on the part of the Trustee,
arising out of or in connection with the acceptance or administration of this
trust or trusts hereunder, including the reasonable costs and expenses of
defending itself against any claim of liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligations of the
Company under this Section 7.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. The Company and the Holders agree that such
additional indebtedness shall be secured by a Lien prior to that of the Debt
Securities and Coupons, if any, upon all property and funds held or collected by
the Trustee, as such, except funds held in trust for the payment of principal
of, and premium, if any, or interest on, particular Debt Securities and Coupons.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other similar
law.
Section 7.07. RIGHT OF TRUSTEE TO RELY ON AN OFFICERS' CERTIFICATE WHERE NO
OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in Section
7.01, whenever in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
<PAGE>92
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
Section 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company may,
but need not, appoint a separate Trustee for any one or more series of Debt
Securities. The Trustee may resign with respect to one or more or all series of
Debt Securities at any time by giving notice to the Company. The Holders of a
majority in principal amount of the Debt Securities of a particular series may
remove the Trustee for such series and only such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Debt Securities of a particular series and
such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee. No resignation or removal of the Trustee
and no appointment of a successor Trustee shall become effective until the
<PAGE>93
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section 7.08.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders of Debt
Securities of each applicable series. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the Lien provided for in Section 7.06.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring Trustee
or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.
If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for the Debt Securities of such series.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.06 shall continue for the
benefit of the retiring Trustee.
In the case of the appointment hereunder of a separate or successor trustee
with respect to the Debt Securities of one or more series, the Company, any
retiring Trustee and each successor or separate Trustee with respect to the Debt
Securities of any applicable series shall execute and deliver an Indenture
supplemental hereto (i) which shall contain such provisions as shall be deemed
<PAGE>94
necessary or desirable to confirm that all the rights, powers, trusts and duties
of any retiring Trustee with respect to the Debt Securities of any series as to
which any such retiring Trustee is not retiring shall continue to be vested in
such retiring Trustee and (ii) that shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental Indenture shall
constitute such Trustees co-trustees of the same trust and that each such
separate, retiring or successor Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Debt Securities so
authenticated; and in case at that time any of the Debt Securities shall not
have been authenticated, any successor to the Trustee may authenticate such Debt
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debt Securities or in this Indenture
provided that the certificate of the Trustee shall have.
Section 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all times
satisfy the requirements of Section 310(a) of the Trust Indenture Act. The
<PAGE>95
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. No obligor upon
the Debt Securities or Coupons, if any, of a particular series or Person
directly or indirectly controlling, controlled by or under common control with
such obligor shall serve as Trustee upon the Debt Securities and Coupons of such
series. The Trustee shall comply with Section 310(b) of the Trust Indenture Act;
provided, however, that there shall be excluded from the operation of Section
310(b)(1) of the Trust Indenture Act this Indenture or any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the Trust
Indenture Act are met.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee that has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
Section 7.12. COMPLIANCE WITH TAX LAWS. The Trustee hereby agrees to comply
with all U.S. federal income tax information reporting and withholding
requirements applicable to it with respect to payments of premium (if any) and
interest on the Debt Securities, whether acting as Trustee, Security Registrar,
paying agent or otherwise with respect to the Debt Securities.
ARTICLE VIII
CONCERNING THE HOLDERS
Section 8.01. EVIDENCE OF ACTION BY HOLDERS. Whenever in this Indenture it
is provided that the Holders of a specified percentage in aggregate principal
amount of the Debt Securities of any or all series may take action (including
the making of any demand or request, the giving of any direction, notice,
<PAGE>96
consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the Holders of such specified percentage have joined
therein may be evidenced by
(a) any instrument or any number of instruments of similar tenor
executed by Holders in Person or by agent or proxy appointed in writing,
(b) the record of the Holders voting in favor thereof at any meeting
of Holders duly called and held in accordance with the provisions of
Section 5.02 or
(c) a combination of such instrument or instruments and any such
record of such a meeting of Holders.
Section 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF DEBT
SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 14.13, proof of
the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
The ownership of Registered Securities of any series shall be proved by the
Debt Security Register or by a certificate of the Registrar for such series.
The ownership of Bearer Securities shall be proved by production of such
Bearer Securities or by a certificate executed by any bank or trust company,
which certificate shall be dated and shall state on the date thereof a Bearer
Security bearing a specified identifying number or other mark was deposited with
or exhibited to the Person executing such certificate by the Person named in
such certificate, or by any other proof of possession reasonably satisfactory to
the Trustee. The holding by the Person named in any such certificate of any
Bearer Security specified therein shall be presumed to continue for a period of
<PAGE>97
one year unless at the time of determination of such holding (a) another
certificate bearing a later date issued in respect of the same Bearer Security
shall be produced, (b) such Bearer Security shall be produced by some other
Person, (c) such Bearer Security shall have been registered on the Debt Security
Register, if, pursuant to Section 2.03, such Bearer Security can be so
registered, or (d) such Bearer Security shall have been canceled or paid.
The Trustee may require such additional proof of any matter referred to in
this Section 8.02 as it shall deem necessary.
Section 8.03. WHO MAY BE DEEMED OWNER OF DEBT SECURITIES. Prior to due
presentment for registration of transfer of any Registered Security, the
Company, the Trustee, any paying agent and any Registrar may deem and treat the
Person in whose name any Registered Security shall be registered upon the books
of the Company as the absolute owner of such Registered Security (whether or not
such Registered Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of and premium, if any, and (subject to Section
2.03) interest on such Registered Security and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Registrar shall
be affected by any notice to the contrary; and all such payments so made to any
such Holder for the time being, or upon his order, shall be valid and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Registered Security.
The Company, the Trustee and any paying agent may deem and treat the Holder
of any Bearer Security or Coupon as the absolute owner of such Bearer Security
or Coupon (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.03) interest on such Bearer Security or Coupon
and for all other purposes, and neither the Company nor the Trustee nor any
<PAGE>98
paying agent shall be affected by any notice to the contrary; and all such
payments so made to any such Holder for the time being, or upon his order, shall
be valid and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Bearer Security or
Coupon.
None of the Company, the Trustee, any paying agent or the Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 8.04. INSTRUMENTS EXECUTED BY HOLDERS BIND FUTURE HOLDERS. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in
this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 8.02, revoke such action
so far as concerns such Debt Security. Except as aforesaid any such action taken
by the Holder of any Debt Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Debt Security and all
past, present and future Holders of Coupons, if any, appertaining thereto, and
of any Debt Security issued upon transfer thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or such other Debt Securities or Coupons. Any action
taken by the Holders of the percentage in aggregate principal amount of the Debt
Securities of any series specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Securities and Coupons of such series.
<PAGE>99
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Registered Securities entitled to give
their consent or take any other action required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders of Registered
Securities at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders of Registered Securities after such record date. No such
consent shall be valid or effective for more than 120 days after such record
date unless the consent of the Holders of the percentage in aggregate principal
amount of the Debt Securities of such series specified in this Indenture shall
have been received within such 120-day period.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE ENTERED INTO
WITHOUT CONSENT OF HOLDERS. The Company, when authorized by a resolution of the
Board of Directors, and the Trustee may from time to time and at any time,
without the consent of Holders, enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof) for one or more
of the following purposes:
(a) to evidence the succession pursuant to Article X of another Person
to the Company, or successive successions, and the assumption by the
Successor Company (as defined in Section 10.01) of the covenants,
agreements and obligations of the Company in this Indenture and in the Debt
Securities;
<PAGE>100
(b) to surrender any right or power herein conferred upon the Company,
to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of
all or any series of Debt Securities and the Coupons, if any, appertaining
thereto (and if such covenants are to be for the benefit of less than all
series of Debt Securities, stating that such covenants are expressly being
included solely for the benefit of such series) as the Board of Directors
shall consider to be for the protection of the Holders of such Debt
Securities, and to make the occurrence, or the occurrence and continuance,
of a Default in any of such additional covenants, restrictions, conditions
or provisions a Default or an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture; provided,
that in respect of any such additional covenant, restriction, condition or
provision such supplemental Indenture may provide for a particular period
of grace after Default (which period may be shorter or longer than that
allowed in the case of other Defaults) or may provide for an immediate
enforcement upon such Default or may limit the remedies available to the
Trustee upon such Default or may limit the right of the Holders of a
majority in aggregate principal amount of any or all series of Debt
Securities to waive such default;
(c) to cure any ambiguity or omission or to correct or supplement any
provision contained herein, in any supplemental Indenture or in any Debt
Securities of any series that may be defective or inconsistent with any
other provision contained herein, in any supplemental Indenture or in the
Debt Securities of such series; to convey, transfer, assign, mortgage or
pledge any property to or with the Trustee, or to make such other
provisions in regard to matters or questions arising under this Indenture
as shall not adversely affect the interests of any Holders of Debt
Securities of any series;
<PAGE>101
(d) to modify or amend this Indenture in such a manner as to permit
the qualification of this Indenture or any Indenture supplemental hereto
under the Trust Indenture Act as then in effect, except that nothing herein
contained shall permit or authorize the inclusion in any Indenture
supplemental hereto of the provisions referred to in Section 316(a)(2) of
the Trust Indenture Act;
(e) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of, or
premium, if any, on, Registered Securities or of principal of, or premium,
if any, or interest on, Bearer Securities or to permit Registered
Securities to be exchanged for Bearer Securities; provided, that any such
action shall not adversely affect the interests of the Holders of Debt
Securities or any Coupons of any series in any material respect or permit
or facilitate the issuance of Debt Securities of any series in
uncertificated form;
(f) to comply with Article X;
(g) in the case of any Debt Securities and Coupons, if any,
appertaining thereto subordinated pursuant to Article XII, to make any
change in Article XII that would limit or terminate the benefits available
to any holder of Senior Indebtedness (or Representatives therefor) under
Article XII;
(h) to add Guarantees with respect to any or all of the Debt
Securities or to secure any or all of the Debt Securities;
(i) to make any change that does not adversely affect the rights of
any Holder;
<PAGE>102
(j) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise
permitted under this Section 9.01 shall (i) neither (A) apply to any Debt
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Debt Security with respect to such
provision or (ii) shall become effective only when there is no such Debt
Security Outstanding;
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor or separate Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee;
(l) to establish the form or terms of Debt Securities and Coupons, if
any, of any series as permitted by Sections 2.01 and 2.03; and
(m) to provide for uncertificated Debt Securities in addition to or in
place of certificated Debt Securities (provided that the uncertificated
Debt Securities are issued in registered form for purposes of Section
163(f) of the Internal Revenue Code of 1986, as amended, or in a manner
such that the uncertificated Debt Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended).
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental Indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental Indenture
<PAGE>103
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental Indenture authorized by the provisions of this Section
9.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debt Securities or Coupons, if any, appertaining thereto
at the time Outstanding, notwithstanding any of the provisions of Section 9.02.
In the case of Debt Securities or Coupons, if any, appertaining thereto
subordinated pursuant to Article XII, an amendment under this Section 9.01 may
not make any change that adversely affects the rights under Article XII of any
holder of Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or Representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail to Holders of Debt Securities of each series affected thereby a
notice briefly describing such amendment. The failure to give such notice to all
such Holders, or any defect therein, shall not impair or affect the validity of
an amendment under this Section 9.01.
Section 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF DEBT
SECURITIES. Without notice to any Holder but with the consent (evidenced as
provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture, the Company, when authorized by a
resolution of the Board of Directors, and the Trustee may from time to time and
at any time enter into an Indenture or Indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental Indenture or of modifying in any manner the rights of the
<PAGE>104
Holders of the Debt Securities of such series; provided, that no such
supplemental Indenture, without the consent of the Holders of each Debt Security
so affected, shall (a) reduce the percentage in principal amount of Debt
Securities of any series whose Holders must consent to an amendment; (b) reduce
the rate of or extend the time for payment of interest on any Debt Security or
Coupon or reduce the amount of any payment to be made with respect to any
Coupon; (c) reduce the principal of or extend the Stated Maturity of any Debt
Security; (d) reduce the premium payable upon the redemption of any Debt
Security or change the time at which any Debt Security may or shall be redeemed
in accordance Article III; (e) make any Debt Security or Coupon payable in
Currency other than that stated in the Debt Security; (f) in the case of any
Debt Security or Coupons, if any, appertaining thereto subordinated pursuant to
Article XII, make any change in Article XII that adversely affects the rights of
any Holder under Article XII; (g) release any security that may have been
granted in respect of the Debt Securities; (h) impair the right of a Holder of
Debt Securities to receive payment of principal of and interest on such Holder's
Debt Securities on or after the due dates therefor or to institute suit for the
enforcement of or with respect to such Holder's Debt Securities; (i) make any
change in Section 6.06 or this Section 9.02; (j) change any obligation of the
Company to pay additional interest pursuant to Section 4.06; or (k) limit the
obligation of the Company to maintain a paying agency outside the United States
for payment on Bearer Securities as provided in Section 4.02 or limit the
obligation of the Company to redeem a Bearer Security as provided in Section
3.02(b).
A supplemental Indenture which changes or eliminates any covenant or other
provision of this Indenture which has been expressly included solely for the
benefit of one or more particular series of Debt Securities and Coupons, if any,
or which modifies the rights of the Holders of Debt Securities and Coupons of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Debt Securities
and Coupons, if any, of any other series.
<PAGE>105
Upon the request of the Company, accompanied by a copy of a resolution of
the Board of Directors authorizing the execution of any such supplemental
Indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental Indenture unless such supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion but shall not be obligated to enter
into such supplemental Indenture.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed supplemental Indenture, but
it shall be sufficient if such consent shall approve the substance thereof.
In the case of any Debt Securities or Coupons, if any, appertaining
thereto, subordinated pursuant to Article XII, an amendment under this Section
9.02 may not make any change that adversely affects the rights under Article XII
of any holder of Senior Indebtedness then outstanding unless the holders of such
Senior Indebtedness (or any group or Representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to Holders of Debt Securities of each series affected thereby a
notice briefly describing such amendment. The failure to give such notice to all
such Holders, or any defect therein, shall not impair or affect the validity of
an amendment under this Section 9.02.
Section 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental Indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
<PAGE>106
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.
Section 9.04. DEBT SECURITIES MAY BEAR NOTATION OF CHANGES BY SUPPLEMENTAL
INDENTURES. Debt Securities and Coupons, if any, of any series authenticated and
delivered after the execution of any supplemental Indenture pursuant to the
provisions of this Article IX may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental Indenture. New Debt Securities and Coupons of any series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental Indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Debt Securities
and Coupons of such series then Outstanding. Failure to make the appropriate
notation or to issue a new Debt Security or Coupon of such series shall not
affect the validity of such amendment.
Section 9.05. PAYMENT FOR CONSENT. Neither the Company nor any Affiliate of
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Debt Securities or Coupons, if any,
appertaining thereto unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
<PAGE>107
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 10.01. CONSOLIDATIONS AND MERGERS OF THE COMPANY. The Company shall
not consolidate with or merge with or into any Person, or convey, transfer or
lease all or substantially all its assets, or permit any Person to consolidate
with or merge into or convey, transfer or lease substantially all its assets to
the Company, unless: (a) either (i) the Company shall be the continuing Person
in the case of a merger or (ii) the resulting, surviving or transferee Person if
other than the Company (the "Successor Company") shall be a corporation, limited
partnership or limited liability company organized and existing under the laws
of the United States, any state thereof or the District of Columbia and the
Successor Company shall expressly assume, by an Indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Debt Securities and Coupons, if any,
according to their tenor, and this Indenture; (b) immediately after giving
effect to such transaction (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Subsidiary of the Company as a result
of such transaction as having been incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
would occur or be continuing; (c) the Successor Company waives any right to
redeem any Bearer Security under circumstances in which the Successor Company
would be entitled to redeem such Bearer Security but the Company would not have
been so entitled to redeem if the consolidation, merger, conveyance, transfer or
lease had not occurred; and (d) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental Indenture (if any)
comply with this Indenture.
Section 10.02. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any
consolidation or merger, or conveyance or transfer of the assets of the Company
<PAGE>108
as an entirety or virtually as an entirety in accordance with Section 10.01, the
Successor Company shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein as the party of the first part, and
the predecessor corporation shall be relieved of any further obligation under
the Indenture and the Securities. The Successor Company thereupon may cause to
be signed, and may issue either in its own name or in the name of the Company,
any or all the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee; and, upon the
order of the Successor Company, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Debt Securities and Coupons, if any,
appertaining thereto, which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Debt
Securities and Coupons, if any, appertaining thereto, which the Successor
Company thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Debt Securities and Coupons, if any, appertaining thereto
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities and Coupons, if any, appertaining thereto
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all such Debt Securities and Coupons had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale or conveyance such changes
in phraseology and form (but not in substance) may be made in the Debt
Securities and Coupons, if any, appertaining thereto thereafter to be issued as
may be appropriate.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
Section 11.01. APPLICABILITY OF ARTICLE. If, pursuant to Section 2.03,
provision is made for the defeasance of Debt Securities of a series and if the
<PAGE>109
Debt Securities of such series are Registered Securities and denominated and
payable only in Dollars (except as provided pursuant to Section 2.03), then the
provisions of this Article XI relating to defeasance of Debt Securities shall be
applicable except as otherwise specified pursuant to Section 2.03 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or for Bearer Securities may be specified
pursuant to Section 2.03.
Section 11.02. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company shall have delivered to the Trustee
for cancellation all Debt Securities of any series theretofore
authenticated and delivered (other than (A) Coupons appertaining to Bearer
Securities of such series called for redemption and maturing after the
relevant redemption date, surrender of which has been waived, (B) any Debt
Securities and Coupons of such series which shall have been destroyed, lost
or stolen and which shall have been replaced or paid as provided in Section
2.09 and (C) Debt Securities and Coupons for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 11.05) or (ii) all Debt Securities and the Coupons, if
any, of such series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit with the
Trustee as trust funds the entire amount in the Currency in which such Debt
Securities are denominated (except as otherwise provided pursuant to
Section 2.03) sufficient to pay at maturity or upon redemption all Debt
Securities of such series not theretofore delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or
to become due on such date of maturity or redemption date, as the case may
be, and if in either case the Company shall also pay or cause to be paid
<PAGE>110
all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of such Debt Securities herein
expressly provided for and rights to receive payments of principal of, and
premium, if any, and interest on, such Debt Securities and any right to
receive additional interest as provided in Section 4.06) with respect to
the Debt Securities of such series, and the Trustee, on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture.
(b) Subject to Sections 11.02(c), 11.03 and 11.07, the Company at any
time may terminate, with respect to Debt Securities of a particular series,
all its obligations under the Debt Securities of such series and this
Indenture with respect to the Debt Securities of such series ("legal
defeasance option") or the operation of Sections 6.01(d), (e), (h) and (i)
and the covenants relating to a series of Debt Securities ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be
accelerated because of an Event of Default specified in Sections 6.01(d),
(e), (f), (i) and (j) (except to the extent covenants or agreements
referenced in such Sections remain applicable).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of
those obligations that the Company terminates.
<PAGE>111
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 7.10, 11.05,
11.06 and 11.07 shall survive until the Debt Securities of the defeased
series have been paid in full. Thereafter, the Company's obligations in
Sections 7.06, 11.05 and 11.06 shall survive.
Section 11.03. CONDITIONS OF DEFEASANCE. The Company may exercise its legal
defeasance option or its covenant defeasance option with respect to Debt
Securities of a particular series only if:
(a) the Company irrevocably deposits in trust with the Trustee cash or
U.S. Government Obligations for the payment of principal of, and premium,
if any, and interest on, the Debt Securities of such series to maturity or
redemption, as the case may be;
(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay the principal, premium and
interest when due on all the Debt Securities of such series to maturity or
redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(f) or (g) with respect to the
Company occurs which is continuing at the end of the period;
(d) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
<PAGE>112
(e) if the Debt Securities of such series are subordinated pursuant to
Article XII, the deposit is not prohibited by Article XII;
(f) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(g) in the event of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
federal income tax law, in either case of the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of Debt
Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(h) in the event of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Debt Securities of such series will not recognize income, gain
or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(i) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Debt Securities of such series as
contemplated by this Article XI have been complied with.
<PAGE>113
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Debt Securities of such series at a future
date in accordance with Article III.
Section 11.04. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities and Coupons, if any, of the defeased series. In the event
the Debt Securities and Coupons, if any, of the defeased series are subordinated
pursuant to Article XII, money and securities so held in trust are not subject
to Article XII.
Section 11.05. REPAYMENT TO COMPANY. The Trustee and any paying agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors.
Section 11.06. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee and the Holders against any tax, fee or
other change imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
<PAGE>114
Section 11.07. REINSTATEMENT. If the Trustee or any paying agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.
ARTICLE XII
SUBORDINATION OF DEBT SECURITIES
Section 12.01. APPLICABILITY OF ARTICLE; AGREEMENT TO SUBORDINATE. The
provisions of this Article XII shall be applicable to the Debt Securities of any
series (Debt Securities of such series referred to in this Article XII as
"Subordinated Debt Securities") designated, pursuant to Section 2.03, as
subordinated to Senior Indebtedness. Each Holder by accepting a Subordinated
Debt Security agrees that the Indebtedness evidenced by such Subordinated Debt
Security is subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment of all Senior Indebtedness
and that the subordination is for the benefit of and enforceable by the holders
of Senior Indebtedness. All provisions of this Article XII shall be subject to
Section 12.12.
Section 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
<PAGE>115
(a) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the Senior Indebtedness (including interest (if
any), accruing on or after the commencement of a proceeding in bankruptcy,
whether or not allowed as a claim against the Company in such bankruptcy
proceeding) before Holders of Subordinated Debt Securities shall be
entitled to receive any payment of principal of, or premium, if any, or
interest on, the Subordinated Debt Securities; and
(b) until the Senior Indebtedness is paid in full, any distribution to
which Holders of Subordinated Debt Securities would be entitled but for
this Article XII shall be made to holders of Senior Indebtedness as their
interests may appear, except that such Holders may receive shares of stock
and any debt securities that are subordinated to Senior Indebtedness to at
least the same extent as the Subordinated Debt Securities.
Section 12.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may not pay the
principal of, or premium, if any, or interest on, the Subordinated Debt
Securities or make any deposit pursuant to Article XI and may not repurchase,
redeem or otherwise retire (except, in the case of Subordinated Debt Securities
that provide for a mandatory sinking fund pursuant to Section 3.05, by the
delivery of Subordinated Debt Securities by the Company to the Trustee pursuant
to the first paragraph of Section 3.06) any Debt Securities (collectively, "pay
the Subordinated Debt Securities") if (a) any principal, premium or interest in
respect of Senior Indebtedness is not paid within any applicable grace period
(including at maturity) or (b) any other default on Senior Indebtedness occurs
and the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (i) the default has been cured or waived and
any such acceleration has been rescinded or (ii) such Senior Indebtedness has
been paid in full in cash; provided, however, that the Company may pay the
Subordinated Debt Securities without regard to the foregoing if the Company and
the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
<PAGE>116
continuance of any default (other than a default described in clause (a) or (b)
of the preceding sentence) with respect to any Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Subordinated Debt Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Company and the Trustee of written notice of
such default from the Representative of any Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period (a "Blockage Notice")
and ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (A) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice, (B) by repayment in full in cash of
such Designated Senior Indebtedness or (C) because the default giving rise to
such Blockage Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding
sentence (but subject to the provisions contained in the first sentence of this
Section 12.03), unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Company may resume payments on the
Subordinated Debt Securities after such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period, irrespective
of the number of defaults with respect to any number of issues of Senior
Indebtedness during such period. For purposes of this Section 12.03, no default
or event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Senior
Indebtedness initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Senior Indebtedness, whether or not within a period of
360 consecutive days, unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
<PAGE>117
Section 12.04. ACCELERATION OF PAYMENT OF DEBT SECURITIES. If payment of
the Subordinated Debt Securities is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness (or their Representatives) of the acceleration.
Section 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution is
made to Holders of Subordinated Debt Securities that because of this Article XII
should not have been made to them, the Holders who receive such distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
Section 12.06. SUBROGATION. After all Senior Indebtedness is paid in full
and until the Subordinated Debt Securities are paid in full, Holders thereof
shall be subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article XII to holders of Senior Indebtedness which otherwise would have been
made to Holders of Subordinated Debt Securities is not, as between the Company
and such Holders, a payment by the Company on Senior Indebtedness.
Section 12.07. RELATIVE RIGHTS. This Article XII defines the relative
rights of Holders of Subordinated Debt Securities and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of either Subordinated
Debt Securities or Debt Securities, the obligation of the Company, which is
absolute and unconditional, to pay principal of, and premium, if any, and
interest on, the Subordinated Debt Securities and the Debt Securities in
accordance with their terms; or
(b) prevent the Trustee or any Holder of either Subordinated Debt
Securities or Debt Securities from exercising its available remedies upon a
<PAGE>118
Default, subject to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Holders of Subordinated Debt Securities.
Section 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Subordinated Debt Securities shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
Section 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding Section
12.03, the Trustee or any paying agent may continue to make payments on
Subordinated Debt Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two business days prior to the date of such payment, a responsible
officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article XII. The Company, the Registrar, any paying agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and any paying agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article XII with respect
to any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness; and nothing in Article VII
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article XII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.06.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
<PAGE>119
the distribution may be made and the notice given to their Representative (if
any).
Section 12.11. ARTICLE XII NOT TO PREVENT DEFAULTS OR LIMIT RIGHT TO
ACCELERATE. The failure to make a payment pursuant to the Debt Securities by
reason of any provision in this Article XII shall not be construed as preventing
the occurrence of a Default. Nothing in this Article XII shall have any effect
on the right of the Holders or the Trustee to accelerate the maturity of either
the Subordinated Debt Securities or the Debt Securities, as the case may be.
Section 12.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article XI by the Trustee for the
payment of principal of, and premium, if any, and interest on, the Subordinated
Debt Securities or the Debt Securities shall not be subordinated to the prior
payment of any Senior Indebtedness or subject to the restrictions set forth in
this Article XII, and none of the Holders thereof shall be obligated to pay over
any such amount to the Company or any holder of Senior Indebtedness of the
Company or any other creditor of the Company.
Section 12.13. TRUSTEE ENTITLED TO RELY. Upon any payment or distribution
pursuant to this Article XII, the Trustee and the Holders shall be entitled to
rely upon
(a) any order or decree of a court of competent jurisdiction in which
any proceedings of the nature referred to in Section 12.02 are pending,
(b) a certificate of the liquidating trustee or agent or other Person
making such payment or distribution to the Trustee or to such Holders or
(c) the Representatives for the holders of Senior Indebtedness for the
purpose of ascertaining the Persons entitled to participate in such payment
<PAGE>120
or distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
Section 12.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by
accepting a Subordinated Debt Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Holders of Subordinated Debt Securities
and the holders of Senior Indebtedness as provided in this Article XII and
appoints the Trustee as attorney-in-fact for any and all such purposes.
Section 12.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders of Subordinated Debt Securities or
the Company or any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.
<PAGE>121
Section 12.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS. Each Holder by accepting a Subordinated Debt Security acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Subordinated Debt Securities, to acquire and continue to hold,
or to continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XIII
GUARANTEE OF DEBT SECURITIES
Section 13.01. APPLICABILITY OF ARTICLE. The provisions of this Article
XIII shall be applicable to the Debt Securities of any series the payment of
which is guaranteed by a Subsidiary Guarantor pursuant to Section 2.03. The
Company may cause any of its Subsidiaries to become a Subsidiary Guarantor with
respect to the Debt Securities of any series. Any such Subsidiary shall become a
Subsidiary Guarantor by executing and delivering to the Trustee
(a) a supplemental indenture, in form and substance satisfactory to,
and executed by, the Trustee and executed by the Company, which subjects
such Subsidiary to the provisions of this Indenture as a Subsidiary
Guarantor and
(b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such Subsidiary and
constitutes the legal, valid, binding and enforceable obligation of such
Subsidiary (subject to customary exceptions concerning creditors' rights
and equitable principles).
<PAGE>122
Section 13.02. UNCONDITIONAL GUARANTEE. Each Subsidiary Guarantor that
delivers such a supplemental indenture with respect to a series of Debt
Securities hereby jointly and severally unconditionally Guarantees to each
Holder of such Debt Security authenticated and delivered by the Trustee, and to
the Trustee on behalf of such Holder, the full and punctual payment of the
principal of and premium, if any, and interest on such Debt Security when and as
the same shall become due and payable, whether at the Stated Maturity, by
acceleration, call for redemption, purchase or otherwise, in accordance with the
terms of such Security and of this Indenture. In case of the failure of the
Company punctually to make any such payment, each Subsidiary Guarantor hereby
jointly and severally agrees to pay or cause such payment to be made punctually
when and as the same shall become due and payable, whether at the Stated
Maturity, by acceleration, call for redemption, purchase or otherwise, and as if
such payment were made by the Company.
Each Subsidiary Guarantor that delivers such a supplemental indenture with
respect to a series of Debt Securities hereby jointly and severally agrees that
its obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Debt Securities or this Indenture, the
absence of any action to enforce the same, any exchange, release or non-
perfection of any Lien on any collateral for, or any release or amendment or
waiver of any term of any other Guarantee of all or any of the Debt Securities,
or any consent to departure from any requirement of any other Guarantee of all
or any of the Debt Securities, the election by the Trustee or any of the Holders
in any proceeding under Chapter 11 of the Federal Bankruptcy Code, or the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, any borrowing
or grant of a security interest by the Company, as debtor-in-possession, under
Section 364 of the Federal Bankruptcy Code, the disallowance, under Section 502
of the Federal Bankruptcy Code, of all or any portion of the claims of the
Trustee or any of the Holders for payment of any of the Securities (including,
limitation, any interest, or premium thereon), any waiver or consent by the
Holder of such Debt Security or by the Trustee with respect to any provisions
<PAGE>123
thereof or of this Indenture or with respect to the provisions of this Article
XIII as they apply to any other Subsidiary Guarantor, the obtaining of any
judgment against the Company or any action to enforce the same or any other
circumstances which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each such Subsidiary Guarantor hereby waives the
benefits of diligence, presentment, demand of payment, any requirement that the
Trustee or any of the Holders protect, secure, perfect or insure any security
interest in or other Lien on any property subject thereto or exhaust any right
or take any action against the Company or any other Person, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest or notice with
respect to such Security or the Indebtedness evidenced thereby and all demands
whatsoever, and covenants that its Subsidiary Guarantee will not be discharged
in respect of such Debt Security except by complete performance of the
obligations contained in such Debt Security and in such Subsidiary Guarantee.
Each Subsidiary Guarantor hereby agrees that, in the event of a default in
payment of principal of or premium, if any, or interest on such Debt Security,
whether at their Stated Maturity, by acceleration, call for redemption, purchase
or otherwise, legal proceedings may be instituted by the Trustee on behalf of,
or by, the Holder of such Security, subject to the terms and conditions set
forth in this Indenture, directly against all or any of the Subsidiary
Guarantors to enforce their respective Subsidiary Guarantees without first
proceeding against the Company. Each Subsidiary Guarantor agrees that if, after
the occurrence and during the continuance of an Event of Default, the Trustee or
any of the Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Debt Securities guaranteed
by such Subsidiary Guarantor, to collect interest on such Debt Securities, or to
enforce or exercise any other right or remedy with respect to such Debt
Securities, such Subsidiary Guarantor agrees to pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that would otherwise
<PAGE>124
have been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders
of the Debt Securities against the Company in respect of any amounts paid by
that Subsidiary Guarantor on account of such Debt Securities pursuant to the
provisions of its Subsidiary Guarantee of this Indenture; provided, however,
that no Subsidiary Guarantor shall be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation until the
principal of and premium, if any, and interest, if any, on all Debt Securities
issued hereunder related to such Subsidiary Guarantee shall have been paid in
full.
Each Subsidiary Guarantee shall remain in full force and effect and
continue to be effective if any petition is filed by or against the Company for
liquidation or reorganization, if the Company becomes insolvent or makes an
assignment for the benefit of creditors or if a receiver or trustee is appointed
for all or any significant part of the Company's assets, and shall, to the
fullest extent permitted by law, continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Securities is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by an obligee on the Securities whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such payment or
performance has not been made. If any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
The Subsidiary Guarantors shall have the right to seek contribution from
any non-paying Subsidiary Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantees or under
this Article XIII in accordance with Section 13.07.
<PAGE>125
Section 13.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES. The
Subsidiary Guarantee to be endorsed on the Debt Securities shall be set forth in
a resolution of the Board of Directors or a supplemental indenture authorizing
the series of Debt Securities relating to such Subsidiary Guarantee. Each
Subsidiary Guarantor that delivers a supplemental indenture with respect to a
series of Debt Securities pursuant to Section 13.01 hereby agrees to execute its
Subsidiary Guarantee, in a form established pursuant to the resolution or
supplemental indenture referred to in the preceding sentence, to be endorsed on
each such Debt Security authenticated and delivered by the Trustee.
The Subsidiary Guarantee shall be executed on behalf of each respective
Subsidiary Guarantor by any one of such Subsidiary Guarantor's Officers,
attested by its secretary or assistant secretary. The signature of any or all of
these Officers on the Subsidiary Guarantee may be manual or facsimile. A
Subsidiary Guarantee bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of a Subsidiary Guarantor shall bind
such Subsidiary Guarantor, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of the
Debt Security on which such Subsidiary Guarantee is endorsed or did not hold
such offices at the date of such Subsidiary Guarantee.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
endorsed thereon on behalf of the Subsidiary Guarantors. Each Subsidiary
Guarantor hereby jointly and severally agrees that its Subsidiary Guarantee set
forth in Section 13.1 shall remain in full force and effect notwithstanding any
failure to endorse a Subsidiary Guarantee on any Security.
Section 13.04. LIMITATION ON MERGER OR CONSOLIDATION. No Subsidiary
Guarantor (in this Section 13.4, the "Subject Subsidiary Guarantor") may
consolidate with or merge with or into (whether or not the Subject Subsidiary
<PAGE>126
Guarantor is the surviving Person), or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all the properties of the Subject
Subsidiary Guarantor to another Person (other than the Company or another
Subsidiary Guarantor), whether or not affiliated with the Subject Subsidiary
Guarantor, unless: (i) the Person formed by or surviving any such consolidation
or merger (if other than the Subject Subsidiary Guarantor) assumes all the
obligations of the Subject Subsidiary Guarantor under the Debt Securities
guaranteed by such Subject Subsidiary Guarantor pursuant to a supplemental
indenture, in form and substance satisfactory to the Trustee; and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists.
Except as set forth in Articles VIII hereof, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or another Subsidiary Guarantor.
Section 13.05. RELEASE OF SUBSIDIARY GUARANTORS.
(a) In the event of a sale or other disposition of all the properties
and assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all the Equity Interests of
any Subsidiary Guarantor, in each case subject to and as permitted by the
terms of this Indenture, including Section 13.04, and upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such consolidation, merger, sale or other
disposition was made in accordance with Section 13.04 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the
release of that Subsidiary Guarantor (in the event of a sale of or other
disposition, by way of such a merger, consolidation or otherwise, of all
<PAGE>127
the equity interests of that Subsidiary Guarantor) from its obligations
under its Subsidiary Guarantees endorsed on the appropriate Debt Securities
and under this Article XIII.
(b) Concurrently with the legal or the covenant defeasance of the
Securities under Section 11.2 hereof, the Subsidiary Guarantors shall be
released from all of their obligations under their Subsidiary Guarantees
endorsed on the Debt Securities and under this Article XIII.
Section 13.06. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY. Each
Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms
that it is the intention of all such parties that the Guarantee by that
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount that, after giving effect to all other contingent
and fixed liabilities of such Subsidiary Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to Section 13.7, result in the obligations
of that Subsidiary Guarantor under its Subsidiary Guarantee not constituting
such a fraudulent transfer or conveyance under federal or state law.
Section 13.07. CONTRIBUTION. In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree,
inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under its Subsidiary
Guarantee with respect to a series of Debt Securities, and so long as the
exercise of such right does not impair the rights of the Holders under the
<PAGE>128
Subsidiary Guarantees or under this Article XIII, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors of such series in a pro rata amount, based on the net assets of each
Subsidiary Guarantor (including the Funding Subsidiary Guarantor), determined in
accordance with GAAP, subject to Section 13.03, for all payments, damages and
expenses incurred by that Funding Subsidiary Guarantor in discharging the
Company's obligations with respect to the Debt Securities of such series or any
other Subsidiary Guarantor's obligations with respect to its Subsidiary
Guarantee.
Section 13.08. SUBORDINATION OF GUARANTEES. If Article XII is applicable to
a series of Debt Securities, then unless otherwise provided pursuant to Section
2.03, the obligations of each of the Subsidiary Guarantors under its Guarantee
with respect to such series of Subordinated Debt Securities pursuant to this
Article XIII shall be junior and subordinated to the Senior Indebtedness of the
Subsidiary Guarantor pursuant to Article XII hereof. For the purposes of the
foregoing sentence, the Trustee and the Holders shall have the right to receive
and/or retain payments or distributions by or on behalf of any of such
Subsidiary Guarantor only at such time as they may receive and/or retain
payments in respect of such series of Subordinated Debt Securities pursuant to
this Indenture, including Article XII hereof.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Company or the Trustee shall bind its successors and
assigns, whether so expressed or not.
Section 14.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR COMPANY
VALID. Any act or proceeding by any provision of this Indenture authorized or
<PAGE>129
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any Successor Company.
Section 14.03. REQUIRED NOTICES OR DEMANDS. Except as otherwise expressly
provided in this Indenture, any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders to or on the Company may be given or served by being deposited
postage prepaid in a post office letter box in the United States addressed
(until another address is filed by the Company with the Trustee) as follows: FX
Energy, Inc., 3006 Highland Drive, Suite 206, Salt Lake City, Utah 84106,
Attention: Scott J. Duncan. Except as otherwise expressly provided in this
Indenture, any notice, direction, request or demand by the Company or by any
Holder to or upon the Trustee may be given or made, for all purposes, by being
deposited postage prepaid in a post office letter box in the United States
addressed to the corporate trust office of the Trustee initially at
; Attention: Corporate Trust Trustee Administration.
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice required or permitted to a Registered Holder by the Company or
the Trustee pursuant to the provisions of this Indenture shall be deemed to be
properly mailed by being deposited postage prepaid in a post office letter box
in the United States addressed to such Holder at the address of such Holder as
shown on the Debt Security Register. Any report pursuant to Section 313 of the
Trust Indenture Act shall be transmitted in compliance with subsection (c)
therein.
Any notice required or permitted to a Bearer Holder by the Company or the
Trustee pursuant to this Indenture shall be deemed to be properly given if
published on two separate business days in an Authorized Newspaper or Newspapers
<PAGE>130
in such Place or Places of Payment specified pursuant to Section 2.03, the first
such publication to be not earlier than the earliest date and not later than two
business days prior to the latest date prescribed for the giving of such notice.
Notwithstanding the foregoing, any notice to Holders of Floating Rate Debt
Securities regarding the determination of a periodic rate of interest, if such
notice is required pursuant to Section 2.03, shall be sufficiently given if
given in the manner specified pursuant to Section 2.03.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspaper or by
reason of any other cause it shall be impracticable to give notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Failure to mail a notice or communication to a Holder or any defect in it
or any defect in any notice by publication as to a Holder shall not affect the
sufficiency of such notice with respect to other Holders. If a notice or
communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.
Section 14.04. INDENTURE AND DEBT SECURITIES TO BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture, each Debt Security and
each Coupon and Subsidiary Guarantee shall be deemed to be New York contracts,
and for all purposes shall be construed in accordance with the laws of said
state (without reference to principles of conflicts of law).
Section 14.05. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE FURNISHED
UPON APPLICATION OR DEMAND BY THE COMPANY. Upon any application or demand by the
<PAGE>131
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such document is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include a
(a) statement that the Person making such certificate or opinion has
read such covenant or condition,
(b) brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based,
(c) statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and
(d) statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 14.06. PAYMENTS DUE ON LEGAL HOLIDAYS. In any case where the date
of maturity of interest on or principal of and premium, if any, on the Debt
Securities of a series or the date fixed for redemption or repayment of any Debt
<PAGE>132
Security or the making of any sinking fund payment shall not be a business day
at any Place of Payment for the Debt Securities of such series, then payment of
interest or principal and premium, if any, or the making of such sinking fund
payment need not be made on such date at such Place of Payment, but may be made
on the next succeeding business day at such Place of Payment with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date. If a record date is
not a business day, the record date shall not be affected.
Section 14.07. PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO CONTROL. If
and to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture which is required to
be included in this Indenture by any of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such required provision shall control.
Section 14.08. COMPUTATION OF INTEREST ON DEBT SECURITIES. Interest, if
any, on the Debt Securities shall be computed on the basis of a 360-day year of
12 30-day months, except as may otherwise be provided pursuant to Section 2.03.
Section 14.09. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee
may make reasonable rules for action by or a meeting of Holders. The Registrar
and any paying agent may make reasonable rules for their functions.
Section 14.10. NO RECOURSE AGAINST OTHERS. An incorporator or any past,
present or future director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Debt Securities, the Coupons or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Debt Security or Coupon, each Holder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of
the Debt Securities and Coupons.
<PAGE>133
Section 14.11. SEVERABILITY. In case any provision in this Indenture, the
Debt Securities or the Coupons shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 14.12. EFFECT OF HEADINGS. The article and section headings herein
and in the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 14.13. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This Indenture
may be executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one and the same
instrument.
The Trustee hereby accepts the trusts in this Indenture upon the terms and
conditions herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed as of the date first written above.
FX ENERGY, INC.
By:-----------------
Name:
Title:
- --------------------
as Trustee
By:-----------------
Name:
Title:
Exhibit 12.1
FX ENERGY, INC.
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
THREE
MONTHS
ENDED
YEAR ENDED DECEMBER 31 MARCH 31,
-------------------------------------------- ----------
1994 1995(B) 1996 1997 1998 1999
------ ------- ------- ------- ------- --------
EARNINGS:
Pre-tax net loss $ (992) $(2,520) $(4,910) $(3,620) $(10,122) $ (723)
Capitalized - - - - - -
interest
Loss - - - - - -
------- ------- ------- ------- ------- -------
Total (992) (2,520) (4,910) (3,620) (10,122) (723)
------- ------- ------- ------- ------- -------
FIXED CHARGES:
Interest 214 448 333 83 - -
Debt amortization - - - - - -
Rental expense
determined to be
interest - - - - -
------- ------- ------- ------- ------- -------
Total 214 448 333 83 - -
------- ------- ------- ------- ------- -------
RATIO OF EARNINGS
TO FIXED CHARGES(A) (5) (6) (15) (44) - -
EARNINGS:
Pre-tax net loss $ (992) $(2,520) $(4,910) $(3,620) $(10,122) $ (723)
Capitalized
interest - - - - - -
Loss - - - - - -
------- ------- ------- ------- ------- -------
Total (992) (2,520) (4,910) (3,620) (10,122) (723)
------- ------- ------- ------- ------- -------
FIXED CHARGES:
Interest 214 448 333 83 - -
Debt amortization - - - - - -
Rental expense
determined to be
interest - - - - - -
Preferred stock
dividends - 93 - - - -
------- ------- ------- ------- ------- -------
Total 214 541 333 83 - -
------- ------- ------- ------- ------- -------
RATIO OF EARNINGS
TO FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS
(A) (5) (5) (15) (44) - -
- -----------
(a) The ratio indicates a less than one-to-one coverage because the
earnings were inadequate to cover the fixed charges for the period. FX
Energy's historical earnings for the years ended December 31, 1994, 1995,
1996, 1997 and 1998 were insufficient to cover FX Energy's fixed charges.
The amounts of the deficiencies were $778,000, $2.0 million, $4.6 million,
$3.5 million and $10.1 million in 1994, 1995, 1996, 1997 and 1998,
respectively, and $723,000 for the three months ended March 31, 1999, for
the ratio of earnings to fixed charges and to fixed charges and preferred
stock dividends. These ratios are based on continuing operations.
"Earnings" is determined by adding:
. income before income taxes, and
. fixed charges, net of interest capitalized.
"Fixed charges" consist of interest (whether expensed or capitalized) and
that portion of rentals considered to be representative of the interest
factor. "Fixed charges and preferred stock dividends" represent fixed
charges (as described above) and preferred stock dividend requirements of
FX Energy.
(b) No Preferred Stock outstanding.
