<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 6, 1998
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
LOUIS DREYFUS NATURAL GAS CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OKLAHOMA 1311 73-1098614
(State or other jurisdiction
of (Primary standard industrial (I.R.S. Employer
incorporation or organization) classification code number) Identification No.)
</TABLE>
14000 QUAIL SPRINGS PARKWAY, SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
(405) 749-1300
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
JEFFREY A. BONNEY
14000 QUAIL SPRINGS PARKWAY, SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
(405) 749-1300
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
COPIES TO:
MICHAEL M. STEWART, ESQ.
CROWE & DUNLEVY, A PROFESSIONAL CORPORATION
1800 MID-AMERICA TOWER
20 NORTH BROADWAY
OKLAHOMA CITY, OKLAHOMA 73102
(405) 235-7700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF
THE SECURITIES TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER UNIT PRICE(1) FEE(2)
<S> <C> <C> <C> <C>
6 7/8% Senior Notes Due 2007................ $200,000,000 99.392% $198,784,000 $58,641
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(f)(2).
(2) Calculated pursuant to Rule 457(f)(2).
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 6, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PRELIMINARY PROSPECTUS
LOUIS DREYFUS NATURAL GAS CORP.
OFFER TO EXCHANGE 6 7/8% SENIOR NOTES DUE 2007 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, FOR
6 7/8% SENIOR NOTES DUE 2007 WHICH HAVE NOT BEEN SO REGISTERED
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1998, UNLESS EXTENDED.
------------------------
Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus (as defined) and the accompanying Letter of Transmittal (the "Letter
of Transmittal"), to exchange (the "Exchange Offer") its 6 7/8% Senior Notes due
2007 (the "Exchange Notes") which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), for an equal principal amount of its
outstanding 6 7/8% Senior Notes due 2007 which have not been so registered (the
"Existing Notes"), of which an aggregate principal amount of $200,000,000 is
outstanding as of the date hereof. The form and terms of each of the Exchange
Notes will be the same in all material respects as the form and terms of each of
the Existing Notes, except that (i) the Exchange Notes will be registered under
the Securities Act and hence will not bear legends restricting the transfer
thereof and (ii) holders of the Exchange Notes will not be entitled to certain
rights of holders of Existing Notes under the Registration Agreement dated as of
December 11, 1997 (the "Registration Agreement"), which will terminate upon
consummation of the Exchange Offer. See "The Exchange Offer--Purpose and Effect
of the Exchange Offer." Except as discussed below, the Exchange Notes will be
available only in book-entry form. The Company expects that the Exchange Notes
issued pursuant to the Exchange Offer will be issued in the form of one or more
fully registered global notes that will be deposited with, or on behalf of, The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
its nominee. Beneficial interests in the global notes representing the Exchange
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. After the initial issuance of
such global notes, Exchange Notes in certificated form will be issued in
exchange for the global notes only in accordance with the terms and conditions
set forth in the Indenture (as defined). See "Description of Exchange
Notes--Book-Entry; Delivery and Form" and "--Certificated Notes."
The Existing Notes were issued and sold in a transaction exempt from the
registration requirements of the Securities Act and may not be offered or sold
in the United States unless so registered or pursuant to an applicable exemption
under the Securities Act. The Exchange Notes are being offered herewith in order
to satisfy certain obligations of the Company contained in the Registration
Agreement. Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
that the Exchange Notes to be issued pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by holders thereof (other
than (i) a broker-dealer who purchases such Exchange Notes from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act, or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Notes are acquired in the ordinary course of such holder's
business and such holders are not participating and have no arrangement with any
person to participate in the distribution of such Exchange Notes. However, the
Company has not sought a no-action letter with respect to the Exchange Offer and
there can be no assurance the staff of the Commission would make a similar
determination with respect to the Exchange Offer. Eligible holders wishing to
accept the Exchange Offer must represent to the Company that such conditions
have been met. Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. A broker-dealer may nonetheless be deemed to be
an "underwriter" under the Securities Act notwithstanding such disclaimer. This
Prospectus (as it may be amended or supplemented from time to time) may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Existing Notes where such Existing Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days (exclusive of
any period during which any stop order shall be in effect suspending the
effectiveness of the Registration Statement (as defined)) after the Expiration
Date (as defined), it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution."
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
The date of this Prospectus is , 1998.
<PAGE>
Holders of Existing Notes whose Existing Notes are not tendered and accepted
in the Exchange Offer will continue to hold such Existing Notes and will be
entitled to all the rights and preferences and will be subject to the
limitations applicable thereto under the Indenture (as defined) governing the
Existing Notes and the Exchange Notes (the Existing Notes and the Exchange Notes
are sometimes referred to herein collectively as the "Notes"). Following
consummation of the Exchange Offer, the holders of Existing Notes will continue
to be subject to the existing restrictions upon transfer thereof and the Company
will have no further obligation to such holders to provide for the registration
under the Securities Act of the Existing Notes held by them. The Exchange Notes
will evidence the same debt as the Existing Notes and will be entitled to the
benefits of the indenture dated December 11, 1997 (the "Indenture") governing
the Notes. The Notes will bear interest at the rate of 6 7/8% per annum, payable
semi-annually on June 1 and December 1, commencing June 1, 1998. The Notes will
mature on December 1, 2007. The Company may redeem the Notes, in whole or in
part, at any time, at the redemption prices set forth herein, together with
accrued and unpaid interest, if any, to the date of redemption. The Notes will
not be subject to any sinking fund requirement. See "Description of Exchange
Notes--Optional Redemption." Other than restrictive covenants, including
limitations on liens and sale and leaseback transactions, the Indenture does not
contain any provisions that afford holders of the Notes protection in the event
of a highly leveraged or other transaction that may adversely affect such
holders. See "Description of Exchange Notes."
The Existing Notes are and the Exchange Notes will be senior unsecured
obligations of the Company. The Existing Notes rank and the Exchange Notes will
rank PARI PASSU in right of payment with all existing and future senior
indebtedness of the Company and rank or will rank senior in right of payment to
any existing or future subordinated indebtedness of the Company. The Company
currently has outstanding $100 million principal amount of 9 1/4% Senior
Subordinated Notes due 2004, which are subordinate to the Notes. The Company's
borrowings under its $450 million unsecured revolving bank credit facility (the
"Bank Credit Facility") rank PARI PASSU with the Notes. As of December 31, 1997,
the Company had $261 million principal amount of borrowings outstanding under
the Bank Credit Facility. See "Capitalization." The Notes will be effectively
subordinated to any secured debt of the Company to the extent of the assets
serving as security therefor.
The Exchange Offer is not conditioned on any minimum aggregate principal
amount of Existing Notes being tendered for exchange. The Company will accept
for exchange any and all validly tendered Existing Notes not withdrawn prior to
5:00 p.m., New York City time, on , 1998 unless extended by the
Company (the "Expiration Date"). Tenders of Existing Notes may be withdrawn at
any time prior to the Expiration Date. The Exchange Offer is subject to certain
customary conditions. See "The Exchange Offer--Conditions." The Company has
agreed to pay all expenses incident to the Exchange Offer. The Company will not
receive any proceeds from the Exchange Offer.
The Existing Notes constitute securities for which there is no established
trading market. Any Existing Notes not tendered and accepted in the Exchange
Offer will remain outstanding. The Company does not currently intend to list the
Exchange Notes on any securities exchange. To the extent that any Existing Notes
are tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Existing Notes could be adversely affected. No assurances can be
given as to the liquidity of the trading market for either the Existing Notes or
the Exchange Notes.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT SURRENDERS
FOR EXCHANGE FROM, HOLDERS OF EXISTING NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington
D.C. 20549, and at the Commission's regional offices in Chicago, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and in New York, Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Commission maintains a site on the
World Wide Web at http:// www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The Company's Common Stock is listed on the
New York Stock Exchange, and such materials also can be inspected at the offices
of The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement on Form S-4
(the "Registration Statement"), filed by the Company with the Commission under
the Securities Act. This Prospectus omits certain of the information contained
in the Registration Statement in accordance with the rules and regulations of
the Commission. Reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
Notes. Statements contained herein concerning the provisions of any documents
are not necessarily complete and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated herein by reference
and made a part of this Prospectus: (a) the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, as amended; (b) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997, as amended; (c) the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997; (d)
the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1997; and (e) the Company's Current Reports on Form 8-K dated June 24, 1997,
October 14, 1997, February 3, 1998 and February 6, 1998.
On October 14, 1997, American Exploration Company was acquired by the
Company. The following documents, which have been filed by American (as defined)
pursuant to the Exchange Act, are incorporated herein by reference and made a
part of this Prospectus: (a) American's Annual Report on Form 10-K for the year
ended December 31, 1996; (b) American's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997; and (c) American's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997.
The Company's Registration Statement on Form S-4, Registration No.
333-34849, and related Joint Proxy Statement/Prospectus dated September 11, 1997
filed with the Commission under the Securities Act are also incorporated herein
by reference and made a part of this Prospectus.
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such document. Any statement herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for the purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes
3
<PAGE>
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
THIS PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED BY
REFERENCE HEREIN (OTHER THAN EXHIBITS NOT SPECIFICALLY INCORPORATED BY REFERENCE
INTO THE TEXTS OF SUCH DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS SHOULD BE
DIRECTED TO: LOUIS DREYFUS NATURAL GAS CORP., 14000 QUAIL SPRINGS PARKWAY, SUITE
600, OKLAHOMA CITY, OKLAHOMA 73134, ATTN: SECRETARY, TELEPHONE NUMBER (405)
749-1300. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY , 1998.
IMPORTANT INFORMATION CONCERNING EXCHANGE OF NOTES
To properly tender Existing Notes, the following procedures must be
followed:
- Each beneficial owner owning interests in Existing Notes ("Beneficial
Owner") through a DTC Participant (as defined) must instruct such DTC
Participant to cause Existing Notes to be tendered in accordance with the
procedures set forth in this Prospectus and in the Letter of Transmittal.
- Each participant (a "DTC Participant") in the Depository Trust Company
("DTC") holding Existing Notes through DTC must (i) electronically
transmit its acceptance to DTC through the DTC Automated Tender Offer
Program ("ATOP"), for which the transaction will be eligible, and DTC will
then edit and verify the acceptance, execute a book-entry delivery to the
account of LaSalle National Bank (the "Exchange Agent") at DTC and send an
Agent's Message (as defined) to the Exchange Agent for its acceptance, or
(ii) comply with the guaranteed delivery procedures set forth under
"Exchange Offer--Guaranteed Delivery Procedures." By tendering through
ATOP, DTC Participants will expressly acknowledge receipt of the
accompanying Letter of Transmittal and agree to be bound by its terms and
the Company will be able to enforce such agreement against such DTC
participants.
- Each registered owner of certificated Existing Notes (a "Holder") must (i)
complete and sign the accompanying Letter of Transmittal, and mail or
deliver such Letter of Transmittal, and all other documents required by
the Letter of Transmittal, together with certificate(s) representing all
tendered Existing Notes, to the Exchange Agent at its address set forth
under "The Exchange Offer--Exchange Agent," or (ii) comply with the
guaranteed delivery procedures set forth under "The Exchange
Offer--Guaranteed Delivery Procedures."
For purposes of this Prospectus, "Tendering Holder" shall mean (i) each DTC
Participant that has properly transmitted (and not properly withdrawn) its
acceptance through ATOP and in respect of which DTC has sent an Agent's Message,
(ii) each Holder that has timely delivered to the Exchange Agent (and not
properly withdrawn) a properly completed and duly executed Letter of
Transmittal, and any other documents required by the Letter of Transmittal,
together with certificate(s) representing all tendered Existing Notes, or (iii)
each DTC Participant or Holder that has complied with the guaranteed delivery
procedures set forth herein.
4
<PAGE>
The information in this Prospectus concerning DTC and its book-entry systems
has been obtained by the Company from sources that the Company believes to be
reliable, and the Company takes no responsibility for the accuracy thereof.
FORWARD-LOOKING STATEMENTS
ALL STATEMENTS IN THIS PROSPECTUS CONCERNING THE COMPANY OTHER THAN PURELY
HISTORICAL INFORMATION (COLLECTIVELY "FORWARD-LOOKING STATEMENTS") REFLECT THE
CURRENT EXPECTATIONS OF MANAGEMENT AND ARE BASED ON THE COMPANY'S HISTORICAL
OPERATING TRENDS, ITS PROVED RESERVE AND FIXED-PRICE CONTRACT (AS DEFINED
HEREIN) POSITIONS AND OTHER INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. THESE
STATEMENTS ASSUME, AMONG OTHER THINGS, THAT NO SIGNIFICANT CHANGES WILL OCCUR IN
THE OPERATING ENVIRONMENT FOR THE COMPANY'S OIL AND GAS PROPERTIES AND THAT
THERE WILL BE NO MATERIAL ACQUISITIONS OR DIVESTITURES EXCEPT AS DISCLOSED
HEREIN. THE COMPANY CAUTIONS THAT THE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO
ALL THE RISKS AND UNCERTAINTIES INCIDENT TO THE ACQUISITION, DEVELOPMENT AND
MARKETING OF, AND EXPLORATION FOR, OIL AND GAS RESERVES. THESE RISKS INCLUDE,
BUT ARE NOT LIMITED TO, COMMODITY PRICE RISKS, COUNTER PARTY RISKS, DRILLING
RISKS, RESERVE, OPERATIONS AND PRODUCTION RISKS, AND RISKS ATTRIBUTABLE TO THE
AMERICAN ACQUISITION (AS DEFINED). CERTAIN OF THESE RISKS ARE DESCRIBED IN THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN. MOREOVER, THE COMPANY MAY MAKE
MATERIAL ACQUISITIONS, MODIFY ITS FIXED-PRICE CONTRACT POSITIONS BY ENTERING
INTO NEW CONTRACTS OR TERMINATING EXISTING CONTRACTS, OR ENTER INTO FINANCING
TRANSACTIONS. NONE OF THESE CAN BE PREDICTED WITH CERTAINTY AND, ACCORDINGLY,
ARE NOT TAKEN INTO CONSIDERATION IN THE FORWARD-LOOKING STATEMENTS MADE HEREIN.
FOR ALL OF THE FOREGOING REASONS, ACTUAL RESULTS MAY VARY MATERIALLY FROM THE
FORWARD-LOOKING STATEMENTS AND THERE IS NO ASSURANCE THAT THE ASSUMPTIONS USED
ARE NECESSARILY THE MOST LIKELY. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION
OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES REGARDING ANY CHANGES IN THE
COMPANY'S EXPECTATIONS WITH REGARD TO THE SUBJECT MATTER OF ANY FORWARD-LOOKING
STATEMENTS OR ANY CHANGES IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY
FORWARD-LOOKING STATEMENTS ARE BASED.
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
APPEARING ELSEWHERE IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. AS
USED HEREIN AND UNLESS THE CONTEXT REQUIRES OTHERWISE, "LOUIS DREYFUS NATURAL
GAS" OR THE "COMPANY" MEANS LOUIS DREYFUS NATURAL GAS CORP. AND ITS CONSOLIDATED
SUBSIDIARIES.
THE COMPANY
Louis Dreyfus Natural Gas is a large independent energy company engaged in
the acquisition, development and exploration of natural gas and oil properties,
primarily in Texas, Oklahoma and New Mexico, and in the production and marketing
of natural gas and crude oil.
The address of the Company's principal executive offices is 14000 Quail
Springs Parkway, Suite 600, Oklahoma City, OK 73134, and its telephone number is
(405) 749-1300.
RECENT DEVELOPMENTS
AMERICAN ACQUISITION. On October 14, 1997, the Company completed the
acquisition (the "American Acquisition") of American Exploration Company
("American"), a publicly-held independent energy company with exploration and
development activities focused primarily in South Texas, Texas State Waters, the
Cotton Valley Reef Trend in East Texas and the Smackover Trend in Arkansas. The
acquisition consideration paid to the shareholders of American consisted of 11.3
million shares of Company common stock and $47 million of cash. In addition,
$116 million of long-term debt and preferred stock having a liquidation value of
$20 million were assumed by the Company in the transaction. Based on the $23.06
closing price of Company common stock on October 14, 1997, the total
consideration paid plus long-term debt and preferred stock assumed was $444
million.
Over the past two years, the Company and American worked together closely on
certain projects. Through this association, each company gained an appreciation
for their complementary strengths. The Company's strengths include a
substantial, long-lived reserve base, a large inventory of low-risk development
drilling locations and strong oil and gas operating and product marketing
capabilities. American's strengths included a high quality, although
shorter-lived, reserve base, a substantial inventory of high potential
exploratory prospects and strong prospect generating and technical skills.
The American Acquisition combines the complementary strengths of each
organization and creates a larger and more balanced independent exploration and
production company with pro forma proved reserves as of December 31, 1996
totaling approximately 1.2 Tcfe, of which 82% was natural gas and 82% was
developed. The estimated future net revenues of these reserves as of December
31, 1996 was $3.0 billion with a Present Value of $1.5 billion. Pro forma daily
production for the first nine months of 1997 was 304 MMcfe per day resulting in
a Reserve Life Index of 11.2 years. The addition of American's proved reserves,
which increased the Company's proved reserves by 26%, improves the Company's
property mix and operating cash flows available for reinvestment and debt
service.
As a result of the American Acquisition, the Company has a stronger balance
sheet, higher operating cash flows and a more diversified property base, as well
as significant growth potential through a balance of low-risk development (an
estimated 1,350 potential development locations) and higher-risk exploration
drilling.
1997 FINANCIAL RESULTS. On February 3, 1998, the Company announced its
results of operations for the fourth quarter and year ended December 31, 1997.
Excluding the effects of a fourth-quarter impairment charge, the Company
reported net income of $31.1 million, or $1.03 per share, on total revenue of
$232.9 million for the year ended December 31, 1997. This compares with net
income of $21.1 million, or $.76 per share, on total revenue of $189.5 million
for
6
<PAGE>
1996. The Company reported cash flows from operating activities (before working
capital changes) for the year ended December 31, 1997 of $127.1 million, which
compares to $101.0 million for 1996, an increase of 26%. Cash flows from
operating activities after consideration of working capital changes were $129.8
million for the year ended December 31, 1997 compared to $101.8 million for
1996. The 1997 increase in revenues and operating cash flows was achieved
primarily through growth in oil and gas production and higher oil and gas
prices. The Company reported a net loss of $16.1 million, or $.53 per share,
after the effects of a $75.2 million non-cash impairment charge ($47.1 million
after tax), substantially all of which was recognized as anticipated in
connection with the American Acquisition.
Excluding the non-cash impairment charge, the Company reported net income of
$8.4 million, or $.23 per share, on total revenue of $80.1 million for the
quarter ended December 31, 1997. This compares to net income of $7.8 million, or
$.28 per share, on total revenue of $54.9 million for the fourth quarter of
1996. Cash flows from operating activities (before changes in working capital)
for the fourth quarter of 1997 were sharply higher, increasing 43% to $46.8
million compared to $32.6 million for the fourth quarter of 1996. Cash flows
from operating activities after consideration of working capital changes were
$49.4 million for the fourth quarter of 1997 compared to $32.7 million for the
fourth quarter of 1996. This improvement was primarily attributable to higher
oil and gas production as a result of the American Acquisition. The Company
reported a net loss of $38.7 million, or $1.03 per share, after the effects of
the acquisition impairment charge.
GENERAL
The Company has grown its production and reserves through both acquisitions
and drilling operations. Since 1991, in addition to the American Acquisition,
the Company has completed a significant number of reserve acquisitions including
three acquisitions ranging in size from $87 million to $180 million. Through its
acquisition and leasing programs, the Company has accumulated, as of September
30, 1997 on a pro forma basis, interests in approximately 4.5 million gross (1.3
million net) acres on which to conduct future drilling operations. During the
three years ended December 31, 1996, the Company drilled 745 gross (450 net)
wells with only 34 gross (14 net) dry holes.
For the five-year period ended December 31, 1996 giving pro forma effect to
the American Acquisition, the Company's strategy of growth through acquisitions
and drilling has enabled the Company to realize compound annual growth rates in
production, proved reserves and cash flows provided by operating activities of
39%, 35% and 62%, respectively.
BUSINESS STRATEGY
The Company's business strategy is to achieve consistent growth in
production, reserves and operating cash flows. The Company implements this
strategy through the following:
GROWTH THROUGH DRILLING. In 1994, 1995 and 1996, the Company replaced 116%,
120% and 153%, respectively, of its production, adding 251 Bcfe of proved
reserves through the drill bit (including revisions of previous estimates).
During this three year period, finding and development costs of reserves added
through drilling averaged $.95 per Mcfe. The drilling program is the source of
the Company's internally generated growth and is designed to provide a balance
between lower risk development drilling in areas where multiple productive oil
and gas bearing formations are likely to be encountered, thus reducing dry hole
risk, and higher risk exploration drilling which provides the potential for
greater production and reserve growth. On a pro forma basis, approximately $132
million, or 61%, of the Company's 1997 drilling budget has been allocated to
development activities and the balance of $83 million, or 39%, has been
allocated to exploration activities. Subsequent to the American Acquisition, the
Company has a combined staff of 50 geologists, geophysicists and reservoir and
operations engineers with extensive experience in the areas where its reserves
and acreage are located. The staff also has extensive experience in the use of
7
<PAGE>
advanced technologies, including 3-D seismic analysis, computer aided mapping
and reservoir simulation modeling.
STRATEGIC ACQUISITIONS. Since January 1, 1990, the Company has completed
proved reserve acquisitions, including the American Acquisition, aggregating
approximately $1 billion and 1.3 Tcfe. The acquisitions have been geographically
concentrated in core areas where the Company possesses considerable expertise
and realizes economies of scale. The Company principally targets acquisitions
which have further development and exploration potential, have a high degree of
operatorship in order to better control the future exploitation of the
properties and can be integrated with minimal incremental administrative cost.
The Company currently operates 70% of its production.
LARGE PROPERTY BASE. The Company owns interests in approximately 10,000
wells primarily located in Texas, Oklahoma and New Mexico. Due to the Company's
large property base, the loss of production due to unexpected well problems is
minimized while the opportunities to generate positive results through the
application of improved production technologies is enhanced. The Company has
five district offices located central to its principal areas and employs 174
pumpers and other field personnel to provide onsite management of its
properties.
PRICE RISK MANAGEMENT. The Company manages a portion of the risks
associated with decreases in prices of natural gas and, to a lesser extent,
crude oil through long-term fixed-price physical delivery contracts and
financial contracts ("Fixed-Price Contracts"). These Fixed-Price Contracts
provide a base of predictable cash flows for a portion of the Company's natural
gas and oil sales. Since 1990 through September 30, 1997, the Company has
generated $40 million in additional operating profits through its price risk
management strategies. At September 30, 1997, the pre-tax present value
(discounted at 10%) of the future net revenues for the Company's Fixed-Price
Contracts, based on the differences between contract prices and forward market
prices, was approximately $153 million. Since April 1996, the Company has not
entered into Fixed-Price Contracts with a term in excess of 12 months due to a
reluctance to sell into the prevailing forward market in which prices trend down
or are essentially flat over the next several years. For the first nine months
of 1997, 56% of the Company's production was hedged by Fixed-Price Contracts.
THE EXCHANGE OFFER
<TABLE>
<S> <C>
EXISTING NOTES...................... The Existing Notes were sold by the Company on
December 11, 1997, to Salomon Brothers Inc, Chase
Securities, Inc., Morgan Stanley & Co. Incorporated,
NationsBanc Montgomery Securities, Inc. and Nesbitt
Burns Securities Inc. (collectively, the "Initial
Purchasers") pursuant to a Purchase Agreement, dated
December 4, 1997 (the "Purchase Agreement"). The
Initial Purchasers subsequently resold the Notes to
qualified institutional buyers pursuant to Rule 144A
under the Securities Act or outside the United States
in compliance with Regulation S under the Securities
Act.
REGISTRATION AGREEMENT.............. Pursuant to the Purchase Agreement, the Company and
the Initial Purchasers entered into the Registration
Agreement, which grants the holders of the Existing
Notes certain exchange and registration rights. The
Exchange Offer is intended to satisfy such exchange
and registration rights which terminate upon the
consummation of the Exchange Offer.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
SECURITIES OFFERED.................. $200,000,000 aggregate principal amount of 6 7/8%
Senior Notes due 2007, which have been registered
under the Securities Act (the "Exchange Notes").
THE EXCHANGE OFFER.................. The Company is offering to exchange $1,000 principal
amount of Exchange Notes for each $1,000 principal
amount of Existing Notes that are properly tendered
and accepted. The Company will issue Exchange Notes
on or promptly after the Expiration Date. As of the
date hereof, there is $200,000,000 aggregate
principal amount of Existing Notes outstanding. The
terms of the Exchange Notes are identical in all
material respects to the terms of the Existing Notes
for which they may be exchanged pursuant to the
Exchange Offer, except that the Exchange Notes are
freely transferable by holders thereof (other than as
provided herein), and are not subject to any covenant
restricting transfer absent registration under the
Securities Act. See "The Exchange Offer." The
Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Existing Notes being
tendered for exchange.
Based on no-action letters issued by the staff of the
Commission to third parties with respect to similar
transactions, including "Exxon Capital Holdings
Corporation" (available May 13, 1988) and "Morgan
Stanley & Co. Incorporated" (available June 5, 1991)
and similar no-action letters, the Company believes
that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Existing Notes may be
offered for resale, resold and otherwise transferred
by holders thereof (other than (i) a broker-dealer
who purchases such Exchange Notes from the Company to
resell pursuant to Rule 144A or any other available
exemption under the Securities Act, or (ii) a person
that is an "affiliate" of the Company within the
meaning of Rule 405 of the Securities Act) without
compliance with the registration and prospectus
delivery requirements of the Securities Act, provided
that such Exchange Notes are acquired in the ordinary
course of such holder's business and such holders are
not engaged in, have no arrangement or understanding
with any person to participate in, and do not intend
to engage in, any distribution of the Exchange Notes.
However, the Company has not sought a no-action
letter with respect to the Exchange Offer and there
can be no assurance that the staff of the Commission
would make a similar determination with respect to
the Exchange Offer. Each holder of Exchange Notes,
other than a broker-dealer, must represent that such
conditions have been met. In addition, each
broker-dealer that receives Exchange Notes for its
own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
The Letter of Transmittal accompanying this
Prospectus states that by so acknowledging
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. A
broker-dealer may nevertheless be deemed to be an
"underwriter" under the Securities Act
notwithstanding such disclaimer. This Prospectus, as
it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with
resales of Exchange Notes received in exchange for
Existing Notes where such Existing Notes were
acquired by such broker-dealer as a result of
market-making activities or other trading activities.
Pursuant to the Registration Agreement, the Company
has agreed that, for a period of 180 days (exclusive
of any period during which a stop order shall be in
effect suspending the effectiveness of the
Registration Statement) after the Expiration Date, it
will make this Prospectus available to any
broker-dealer for use in connection with any such
resale. See "The Exchange Offer-- Purpose and Effect
of the Exchange Offer" and "Plan of Distribution."
Any holder who tenders in the Exchange Offer with the
intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Notes will not be able to rely on the position of the
staff of the Commission enunciated in no-action
letters and, in the absence of an applicable
exemption, must comply with the registration and
prospectus delivery requirements of the Securities
Act in connection with any resale transaction.
Failure to comply with such requirements in such
instance may result in such holder incurring
liability under the Securities Act for which the
holder is not indemnified by the Company.
EXPIRATION DATE..................... 5:00 p.m., New York City time, on , 1998
unless the Exchange Offer is extended, in which case
the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended. See
"The Exchange Offer-- Expiration Date; Extensions;
Amendments."
ACCRUED INTEREST OR ACCUMULATED
DIVIDENDS ON THE EXCHANGE NOTES... Each Exchange Note will bear interest from the most
recent date to which interest has been paid on the
Existing Notes or, if no interest has been paid on
such Existing Notes, from December 11, 1997.
EXCHANGE DATE....................... As soon as practicable after the close of the
Exchange Offer, the Company will accept for exchange
all Existing Notes properly tendered and not validly
withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders."
CONDITIONS TO THE EXCHANGE OFFER.... The Exchange Offer is subject to customary
conditions, certain of which may be waived by the
Company. The Company reserves the right to terminate
or amend the Exchange Offer at any time prior to the
Expiration Date
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
upon the occurrence of any such condition. The
Exchange Offer is not conditioned on any minimum
aggregate principal amount of Existing Notes being
tendered for exchange. See "The Exchange
Offer--Conditions."
CONSEQUENCES OF FAILURE TO
EXCHANGE.......................... Any Existing Notes not tendered pursuant to the
Exchange Offer will remain "restricted securities"
under the Securities Act, subject to the transfer
restrictions described herein. As a result, the
liquidity of the market for such Existing Notes could
be adversely affected upon completion of the Exchange
Offer. See "The Exchange Offer--Consequences of
Failure to Exchange."
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES...................... The exchange pursuant to the Exchange Offer should
not be a taxable event for U.S. federal income tax
purposes. See "Certain Federal Income Tax
Consequences."
USE OF PROCEEDS..................... There will be no cash proceeds to the Company from
the Exchange Offer. See "Use of Proceeds."
PROCEDURES FOR TENDERING............ Each beneficial owner owning interests in Existing
Notes through a DTC Participant must instruct such
DTC Participant to cause Existing Notes to be
tendered in accordance with the procedures set forth
in this Prospectus and in the Letter of Transmittal.
See "The Exchange Offer-- Procedures for
Tendering--Existing Notes held through DTC."
Each DTC Participant holding Existing Notes through
DTC must (i) electronically transmit its acceptance
to DTC through ATOP for which the transaction will be
eligible, and DTC will then edit and verify the
acceptance, execute a book-entry delivery to the
Exchange Agent's account at DTC and send an Agent's
Message (as defined herein) to the Exchange Agent for
its acceptance, or (ii) comply with the guaranteed
delivery procedures set forth in this Prospectus and
in the Letter of Transmittal. By tendering through
ATOP, DTC Participants will expressly acknowledge
receipt of the accompanying Letter of Transmittal and
agree to be bound by its terms and the Company will
be able to enforce such agreement against such DTC
participants. See "The Exchange Offer--Procedures for
Tendering--Existing Notes held through DTC" and
"--Guaranteed Delivery Procedures--Existing Notes
held through DTC."
Each Holder must (i) complete and sign a Letter of
Transmittal, and mail or deliver such Letter of
Transmittal, and all other documents required by the
Letter of Transmittal, together with certificate(s)
representing all tendered Existing Notes, to the
Exchange Agent at its address set forth in this
Prospectus and in the Letter of Transmittal, or (ii)
comply with the guaranteed delivery procedures set
forth in this Prospectus. See "The Exchange Offer--
Procedures for Tendering," "--Exchange Agent," and
"--
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Guaranteed Delivery Procedures--Existing Notes held
by Holders." By tendering, each holder will represent
to the Company that, among other things, (i) it is
not an affiliate of the Company, (ii) it is not a
broker-dealer tendering Existing Notes acquired
directly from the Company for its own account, (iii)
the Exchange Notes acquired pursuant to the Exchange
Offer are being obtained in the ordinary course of
business of such holder and (iv) it has no
arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of
distributing the Exchange Notes. See "The Exchange
Offer--Procedures for Tendering."
GUARANTEED DELIVERY PROCEDURES...... DTC Participants holding Existing Notes through DTC
who wish to cause their Existing Notes to be
tendered, but who cannot transmit their acceptances
through ATOP prior to the Expiration Date, may effect
a tender in accordance with the procedures set forth
in this Prospectus and in the Letter of Transmittal.
See "Exchange Offer--Guaranteed Delivery Procedures."
Holders who wish to tender their Existing Notes but
(i) whose Existing Notes are not immediately
available and will not be available for tendering
prior to the Expiration Date, or (ii) who cannot
deliver their Existing Notes, the Letter of
Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, may
effect a tender in accordance with the procedures set
forth in this Prospectus. See "The Exchange
Offer--Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS................... The tender of Existing Notes pursuant to the Exchange
Offer may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date, in
accordance with the procedures set forth in this
Prospectus. See "The Exchange Offer--Withdrawal of
Tenders."
EXCHANGE AGENT...................... LaSalle National Bank is serving as Exchange Agent in
connection with the Exchange Offer. See "The Exchange
Offer--Exchange Agent."
SHELF REGISTRATION STATEMENT........ Under circumstances described in the Registration
Agreement, certain Initial Purchasers of Existing
Notes may require the Company to file, and use its
best efforts to cause to become effective, a shelf
registration statement under the Securities Act,
which would cover resales of Existing Notes by such
holders. See "Exchange Offer--Purpose and Effect of
the Exchange Offer."
TERMS OF THE EXCHANGE NOTES
SECURITIES OFFERED.................. $200,000,000 principal amount of 6 7/8% Senior Notes
Due 2007, which have been registered under the
Securities Act.
MATURITY............................ The Exchange Notes will mature on December 1, 2007.
INTEREST PAYMENT DATES.............. Interest on the Exchange Notes is payable
semiannually on each June 1 and December 1,
commencing June 1, 1998.
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
OPTIONAL REDEMPTION................. The Exchange Notes may be redeemed at any time at the
option of the Company, in whole or from time to time
in part, at a price equal to 100% of the principal
amount thereof plus accrued and unpaid interest to
the date of redemption plus a Make-Whole Premium
relating to the then prevailing Treasury Yield and
the remaining life of the Notes. See Description of
Exchange Notes--Optional Redemption.
CERTAIN COVENANTS................... The Indenture relating to the Exchange Notes will
contain limitations on the Company's ability to (i)
incur certain liens and (ii) engage in certain sale
and leaseback transactions. See Description of
Exchange Notes--Certain Covenants.
RANKING............................. The Exchange Notes will be senior securities of the
Company, ranking PARI PASSU with all other
unsubordinated and unsecured indebtedness of the
Company and senior in right of payment to any
existing or future subordinated indebtedness of the
Company. The Company currently has outstanding $100
million principal amount of 9 1/4% Senior
Subordinated Notes due 2004, which will be
subordinate to the Exchange Notes. The Company's
borrowings under the Bank Credit Facility will rank
PARI PASSU with the Exchange Notes. As of December
31, 1997, the Company had $261 million principal
amount of borrowings outstanding under the Bank
Credit Facility.
USE OF PROCEEDS..................... There will be no cash proceeds to the Company from
the exchanges pursuant to the Exchange Offer.
</TABLE>
13
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA
The following table sets forth selected historical and pro forma financial
data of the Company at the dates and for the periods indicated. The following
data should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the consolidated financial
statements and notes thereto and the pro forma financial statements and notes
thereto contained in the reports incorporated in this Prospectus by reference.
The historical financial data as of September 30, 1997 and for the nine months
ended September 30, 1996 and 1997 and the pro forma financial data are
unaudited.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------------- ---------------------------------
PRO FORMA PRO FORMA
1992 1993 1994 1995 1996 1996(1) 1996 1997 1997(1)
-------- -------- -------- -------- -------- --------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Oil and gas sales............. $ 59,821 $ 92,912 $138,584 $163,366 $185,558 $261,786 $131,713 $142,193 $208,900
Other income (loss)(2)........ 630 2,269 1,953 (418) 3,947 4,917 2,941 10,602 10,776
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Total revenues............ 60,451 95,181 140,537 162,948 189,505 266,703 134,654 152,795 219,676
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Operating costs............... 16,217 26,715 33,713 35,352 44,615 67,414 32,705 32,489 49,494
General and administrative.... 6,448 11,822 15,309 16,631 16,325 26,412 12,346 11,899 22,527
Exploration costs............. -- -- -- -- 4,965 23,799 791 5,300 17,008
Provision for uninsured loss
from well blowout........... -- -- -- -- -- -- -- -- 2,770
Depreciation, depletion and
amortization................ 25,148 38,649 53,321 57,796 65,278 106,651 48,766 49,241 84,269
Impairment of oil and gas
properties(3)............... -- -- 5,300 15,694 -- -- -- -- --
Interest...................... 9,939 14,364 16,856 21,736 26,822 33,976 20,202 19,031 24,868
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Total expenses............ 57,752 91,550 124,499 147,209 158,005 258,252 114,810 117,960 200,936
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Income before income taxes.... 2,699 3,631 16,038 15,739 31,500 8,451 19,844 34,835 18,740
Income taxes.................. 820 1,371 5,292 4,722 10,398 3,211 6,548 12,193 7,121
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Net income.................... 1,879 2,260 10,746 11,017 21,102 5,240 13,296 22,642 11,619
Preferred stock dividends..... -- -- -- -- -- 1,800 -- -- 1,350
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Net income to common stock.... $ 1,879 $ 2,260 $ 10,746 $ 11,017 $ 21,102 $ 3,440 $ 13,296 $ 22,642 $ 10,269
-------- -------- -------- -------- -------- --------- -------- -------- ---------
-------- -------- -------- -------- -------- --------- -------- -------- ---------
Net income per common share... $ .09 $ .11 $ .39 $ .40 $ .76 $ .09 $ .48 $ .81 $ .26
Weighted average common shares
outstanding................. 20,000 21,042 27,800 27,800 27,800 39,103 27,800 27,805 39,112
STATEMENT OF CASH FLOWS DATA:
Net cash provided by operating
activities.................. $ 22,272 $ 52,666 $ 80,894 $ 89,515 $101,761 $134,217 $ 69,097 $ 80,459 $105,143
Net cash used in investing
activities.................. 126,666 180,038 102,969 171,540 150,857 250,003 101,691 83,868 168,861
Net cash provided by financing
activities.................. 98,450 138,559 13,701 80,629 55,261 119,898 38,356 6,211 55,749
OTHER FINANCIAL DATA:
EBITDAX(4).................... 40,311 59,169 94,040 111,572 128,565 172,877 89,603 108,407 144,885
Ratio of earnings to fixed
charges(5).................. 1.3x 1.2x 1.9x 1.7x 2.1x 1.1x 1.9x 2.7x 1.5x
Ratio of EBITDAX to interest
expense..................... 4.1x 4.1x 5.6x 5.1x 4.8x 5.1x 4.4x 5.7x 5.8x
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
1997
AS OF DECEMBER 31, -----------------------
------------------------------------------------ PRO
1992 1993 1994 1995 1996 HISTORICAL FORMA(1)
-------- -------- -------- -------- -------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Oil and gas properties, net... $260,451 $432,842 $483,214 $584,900 $652,257 $691,982 $1,059,621
Total assets.................. 290,354 481,488 528,261 634,937 733,613 771,770 1,177,159
Long-term debt, including
current portion............. 191,631 203,955 215,010 314,760 343,907 356,017 521,752
Stockholders' equity.......... 74,166 213,818 224,564 242,581 263,693 286,814 466,231
</TABLE>
(SEE FOOTNOTES ON FOLLOWING PAGE)
14
<PAGE>
(1) The unaudited pro forma income statement data, statement of cash flows data
and other financial data for the year ended December 31, 1996 and for the
nine months ended September 30, 1997 give effect to the American Acquisition
as if it had occurred on January 1, 1996. The unaudited pro forma balance
sheet data as of September 30, 1997 gives effect to the American Acquisition
as if it had occurred on September 30, 1997. Such pro forma data has been
prepared pursuant to regulations prescribed by the Commission. The unaudited
pro forma income statement data, statement of cash flows data and other
financial data do not consider the effects of the cost reduction and
financing plans of management being implemented following the American
Acquisition, nor does such data include the effects of certain purchase
accounting adjustments. The estimated combined financial impact of such
plans and purchase accounting adjustments if included in the pro forma
income statements would be an increase in pro forma pretax earnings of $18.8
million and $12.1 million for the year ended December 31, 1996 and the nine
months ended September 30, 1997, respectively.
(2) Other income (loss) for the nine months ended September 30, 1997 includes an
$8.5 million gain recognized upon the sale of a non-core West Texas
waterflood property in January 1997.
(3) The 1994 impairment was recorded in connection with the sale of
approximately one-half of the Company's ownership in an offshore property.
The 1995 impairment was recorded in connection with the adoption of SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of." Pro forma amounts do not include a one time
impairment charge to be recorded in connection with the American Acquisition
estimated as of September 30, 1997 to be $72.9 million.
(4) EBITDAX is defined herein as income before interest, income taxes,
depreciation, depletion and amortization, impairments and exploration costs.
The Company believes that EBITDAX is a financial measure commonly used in
the oil and gas industry as an indicator of a company's ability to service
and incur debt. However, EBITDAX should not be considered in isolation or as
a substitute for net income, cash flows provided by operating activities or
other data prepared in accordance with generally accepted accounting
principles, or as a measure of a company's profitability or liquidity.
EBITDAX as presented herein may not be comparable to other similarly titled
measures of other companies.
(5) For purposes of calculating the ratio of earnings to fixed charges, earnings
represents net income before income taxes plus fixed charges, less
capitalized interest. Fixed charges consist of interest expense, including
amortization of debt discount and financing costs, capitalized interest and
the portion of rental expense which the Company believes is representative
of the interest component of rental expense.
15
<PAGE>
SELECTED HISTORICAL AND PRO FORMA OPERATING DATA
The following table sets forth selected historical and pro forma operating
data of the Company at the dates and for the periods indicated. The following
data should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the consolidated financial
statements and notes thereto and the pro forma financial statements and notes
thereto contained in the reports incorporated in this Prospectus by reference.
The historical operating data for the nine months ended September 30, 1996 and
1997 and the pro forma operating data are unaudited.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------ ---------------------------------
PRO FORMA PRO FORMA
1992 1993 1994 1995 1996 1996(1) 1996 1997 1997(1)
--------- --------- --------- --------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OIL AND GAS SALES (M$):
Oil sales................... $ 20,321 $ 36,058 $ 34,271 $ 30,050 $ 36,174 $ 66,963 $ 25,940 $ 25,237 $ 47,243
Natural gas sales........... 39,500 56,854 104,313 133,316 149,384 194,823 105,773 116,956 161,657
PRODUCTION:
Oil production (MBbls)...... 1,082 2,106 1,873 1,695 1,849 3,638 1,369 1,240 2,439
Natural gas production
(MMcf)..................... 22,158 30,540 43,082 51,264 63,910 86,279 47,576 48,379 68,352
Equivalent production
(MMcfe).................... 28,650 43,179 54,321 61,434 75,004 108,107 55,792 55,819 82,985
Oil production hedged by
Fixed-Price Contracts
(MBbls).................... -- 650 1,698 1,464 1,241 2,449 949 362 1,217
Gas production hedged by
Fixed-Price Contracts
(MMcf)..................... 22,158 28,775 32,308 31,579 32,508 42,931 24,185 29,241 39,131
AVERAGE SALES PRICE:
Oil price (per Bbl)......... $ 18.78 $ 17.12 $ 18.30 $ 17.73 $ 19.56 $ 18.41 $ 18.94 $ 20.35 $ 19.37
Natural gas price (per
Mcf)....................... 1.78 1.86 2.42 2.60 2.34 2.26 2.22 2.42 2.37
Natural gas equivalent price
(per Mcfe)................. 2.09 2.15 2.55 2.66 2.47 2.42 2.36 2.55 2.52
EXPENSES AND COSTS INCURRED
(PER MCFE):
Lease operating expenses.... $ .45 $ .50 $ .51 $ .47 $ .47 $ .49 $ .47 $ .45 $ .46
Production taxes............ .12 .12 .11 .11 .12 .13 .12 .13 .14
General and administrative.. .23 .27 .28 .27 .22 .24 .22 .21 .27
Depreciation, depletion and
amortization--oil and gas
properties................. .85 .85 .92 .88 .82 .93 .82 .82 .96
</TABLE>
- ------------------------------
(1) The unaudited pro forma operating data for the year ended December 31, 1996
and for the nine months ended September 30, 1997 give effect to the American
Acquisition as if it had occurred on January 1, 1996.
16
<PAGE>
SELECTED HISTORICAL AND PRO FORMA RESERVES DATA
The following table sets forth information regarding estimated proved
reserves of the Company as of the dates indicated and the estimated pro forma
proved reserves of the Company as of December 31, 1996 giving effect to the
American Acquisition. Estimated recoverable proved reserves have been determined
without regard to any economic benefit that may be derived from Fixed-Price
Contracts. Such calculations were prepared using standard geological and
engineering methods generally accepted by the petroleum industry and in
accordance with Commission guidelines. Future net revenue is estimated using oil
and gas prices in effect as of the end of each respective year with price
escalations permitted only for those properties that have wellhead contracts
allowing specific increases. Estimated future operating costs are based on
historical operating costs incurred. The amounts shown do not give effect to
indirect expenses such as general and administrative expenses, debt service,
future income tax expense or to depletion, depreciation and amortization.
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------------------------------
PRO FORMA
1992 1993 1994 1995 1996 1996
---------- ------------ ------------ ------------ ------------ ------------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Estimated Proved Reserves (1):
Natural gas (MMcf).................... 272,691 502,018 574,025 753,919 849,199 1,016,610
Oil (MBbls)........................... 17,305 20,867 19,317 20,360 23,497 37,881
Total (MMcfe)......................... 376,521 627,222 689,924 876,076 990,179 1,243,894
Reserve Replacement Ratio............... 676% 714% 219% 430% 254% 441%
Reserve Life Index (in years)........... 13.1 14.5 12.7 14.3 13.2 11.5
Estimated Future Net Revenues including
Fixed-Price Contracts (1)(2)........... $ 757,650 $ 1,167,940 $ 1,219,760 $ 1,531,501 $ 2,417,430 $ 3,007,462
Present Value including Fixed-Price
Contracts (1)(2)....................... 395,238 588,986 616,005 737,512 1,117,734 1,488,562
Present Value excluding Fixed-Price
Contracts (1)(2)....................... 294,441 455,362 358,766 524,354 1,303,709 1,689,251
</TABLE>
- ------------------------------
(1) Includes for 1996 data relating to a non-core West Texas waterflood property
consisting of 34 Bcfe of proved reserves that was sold in January 1997 for
$27.1 million. Future net revenues and the Present Value attributable to
such property were $68.5 million and $35.9 million, respectively, at
December 31, 1996.
(2) Estimated Future Net Revenues and the Present Value give no effect to
federal or state income taxes attributable to estimated future net revenues.
17
<PAGE>
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's
obligations under the Registration Agreement. In consideration for issuing the
Exchange Notes contemplated in this Prospectus, the Company will exchange
Existing Notes (in a like principal amount), the form and terms of which are the
same as the form and terms of such Existing Notes, except as otherwise described
herein. The Existing Notes surrendered in exchange for Exchange Notes will be
retired and canceled and cannot be reissued. Accordingly, issuance of the
Exchange Notes will not result in any increase or decrease in the indebtedness
of the Company. As such, no effect has been given to the Exchange Offer in the
capitalization table. The Company will not receive any proceeds from the
Exchange Offer. The net proceeds to the Company from the offering of Existing
Notes on December 11, 1997 (the "Existing Notes Offering") were approximately
$197 million (after deduction of discounts to the Initial Purchasers and fees
and expenses relating to such Offering). The net proceeds of the Existing Notes
Offering were used to repay indebtedness incurred and assumed in connection with
the American Acquisition and other amounts outstanding under the Bank Credit
Facility. See "Capitalization." Bank of Montreal, an affiliate of Nesbitt Burns
Securities Inc., The Chase Manhattan Bank, an affiliate of Chase Securities
Inc., and NationsBank of Texas, N.A., an affiliate of NationsBanc Montgomery
Securities, Inc., are agent banks under the Bank Credit Facility and received
their respective proportionate shares of repayment by the Company of the
borrowings outstanding under the Bank Credit Facility from the net proceeds of
the Existing Notes Offering.
In connection with the American Acquisition, the Company entered into a new
Bank Credit Facility that initially provided for an unsecured committed line of
credit of $550 million which terminates on October 14, 2002. In connection with
the issuance of the Existing Notes, the Company reduced the Bank Credit Facility
commitment to $450 million. As of December 31, 1997, the Company had $261
million principal amount of borrowings outstanding under the Bank Credit
Facility. Availability of loans under the Bank Credit Facility is not subject to
a borrowing base requirement unless the Company's long-term senior unsecured
debt is rated less than BBB- by Standard & Poor's Ratings Services and less than
Baa3 by Moody's Investors Service and the majority in interest of the lenders
elect to implement a borrowing base requirement. The Bank Credit Facility limits
the amount of the Company's Debt (as defined therein) to $700 million of which
no more than $625 million may be Senior Debt (as defined therein), prohibits the
Company from granting any liens or mortgages on its properties (subject to
certain exceptions), requires that the Company maintain a Tangible Net Worth (as
defined therein) of at least $400 million plus 50% of the proceeds of any equity
offerings and 50% of consolidated net income (for each quarter for which net
income is greater than zero beginning with the quarter ending December 31, 1997)
and requires the Company to maintain a Funded Debt Ratio (ratio of long-term
Debt to EBITDAX as defined therein) of no more than 4.00 to 1.00. As a result of
the $700 million limitation on Company Debt, the maximum amount that the Company
will be permitted to borrow under the Bank Credit Facility is approximately $400
million for so long as the Notes and the Company's 9 1/4% Senior Subordinated
Notes due 2004 remain outstanding. As of December 31, 1997, the Bank Credit
Facility had an effective interest rate for borrowings of 6.3% per annum, after
giving effect to interest rate swaps.
18
<PAGE>
CAPITALIZATION
The following table sets forth the cash and cash equivalents and
capitalization of the Company at September 30, 1997, (i) on an historical basis,
(ii) giving pro forma effect to the American Acquisition and (iii) pro forma as
adjusted to reflect the foregoing pro forma adjustments, the issuance of the
Notes and the application of the net proceeds therefrom (approximately $197
million).
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents................................................... $ 10,551 $ 12,003 $ 11,753
---------- ----------- -----------
---------- ----------- -----------
Long-term debt:
Bank credit facility...................................................... $ 257,000 $ 380,114 $ 182,830
6 7/8% Senior Notes due 2007(1)........................................... -- -- 198,784
9 1/4% Senior Subordinated Notes due 2004(2).............................. 99,017 99,017 99,017
11% Senior Subordinated Notes due 2004(3)................................. -- 42,621 42,621
---------- ----------- -----------
Total long-term debt.................................................... 356,017 521,752 523,252
---------- ----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized; issued and
outstanding in one series designated as follows: $450 Cumulative
Convertible Preferred Stock, authorized 4,000 shares; none issued and
outstanding, actual; 4,000 shares issued and outstanding pro forma
(aggregate liquidation value $20,000,000)(4)............................ -- 21,080 21,080
Common stock, $.01 par value, 100,000,000 shares authorized; 27,830,000
shares issued and outstanding, actual; 39,137,385 shares issued and
outstanding pro forma................................................... 278 391 391
Additional paid-in capital................................................ 197,780 401,226 401,226
Retained earnings......................................................... 88,756 43,534 43,534
---------- ----------- -----------
Total stockholders' equity.............................................. 286,814 466,231 466,231
---------- ----------- -----------
Total capitalization.................................................... $ 642,831 $ 987,983 $ 989,483
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
- ------------------------
(1) Recorded at face amount after deduction of discount.
(2) Recorded at face amount after deduction of unamortized discount.
(3) Recorded at face amount of $35 million plus the "make whole premium"
incurred upon prepayment of such notes by the Company on November 17, 1997.
Such prepayment was made through availability under the Bank Credit
Facility.
(4) Recorded at redemption value as of December 31, 1997, the date upon which
the $450 Cumulative Convertible Preferred Stock (the "Convertible Preferred
Stock") first became redeemable. On December 31, 1997, the Company redeemed
all outstanding shares of Convertible Preferred Stock. As an alternative to
redemption, the holders of Convertible Preferred Stock were entitled to
convert their shares into Company common stock and cash prior to the
redemption date. The Company issued 940,649 shares of Company common stock
and $3.9 million in cash upon conversion of Convertible Preferred Stock
prior to the redemption date and paid an aggregate of $.4 million to redeem
the remaining shares of Convertible Preferred Stock.
19
<PAGE>
THE COMPANY
Louis Dreyfus Natural Gas is a large independent energy company engaged in
the acquisition, development and exploration of natural gas and oil properties,
primarily in Texas, Oklahoma and New Mexico, and in the production and marketing
of natural gas and crude oil.
RECENT DEVELOPMENTS
AMERICAN ACQUISITION. On October 14, 1997, the Company completed the
acquisition of American, a publicly-held independent energy company with
exploration and development activities focused primarily in South Texas, Texas
State Waters, the Cotton Valley Reef Trend in East Texas and the Smackover Trend
in Arkansas. The acquisition consideration paid to the shareholders of American
consisted of 11.3 million shares of Company common stock and $47 million of
cash. In addition, $116 million of long-term debt and preferred stock having a
liquidation value of $20 million were assumed by the Company in the transaction.
Based on the $23.06 closing price of Company common stock on October 14, 1997,
the total consideration paid plus long-term debt and preferred stock assumed was
$444 million.
Over the past two years, the Company and American worked together closely on
certain projects. Through this association, each company gained an appreciation
for their complementary strengths. The Company's strengths include a
substantial, long-lived reserve base, a large inventory of low-risk development
drilling locations and strong oil and gas operating and product marketing
capabilities. American's strengths included a high quality, although
shorter-lived, reserve base, a substantial inventory of high potential
exploratory prospects and strong prospect generating and technical skills.
The American Acquisition combines the complementary strengths of each
organization and creates a larger and more balanced independent exploration and
production company with pro forma proved reserves as of December 31, 1996
totaling approximately 1.2 Tcfe of which 82% was natural gas and 82% was
developed. The estimated future net revenues of these reserves as of December
31, 1996 was $3.0 billion with a Present Value of $1.5 billion. Pro forma daily
production for the first nine months of 1997 was 304 MMcfe per day resulting in
a Reserve Life Index of 11.2 years. The addition of American's proved reserves,
which increased the Company's proved reserves by 26%, improves the Company's
property mix and operating cash flows available for reinvestment and debt
service.
As a result of the American Acquisition, the Company has a stronger balance
sheet, higher operating cash flows and a more diversified property base, as well
as significant growth potential through a balance of low-risk development (an
estimated 1,350 potential development locations) and higher-risk exploration
drilling.
1997 FINANCIAL RESULTS. On February 3, 1998, the Company announced its
results of operations for the fourth quarter and year ended December 31, 1997.
Excluding the effects of a fourth-quarter impairment charge, the Company
reported net income of $31.1 million, or $1.03 per share, on total revenue of
$232.9 million for the year ended December 31, 1997. This compares with net
income of $21.1 million, or $.76 per share, on total revenue of $189.5 million
for 1996. The Company reported cash flows from operating activities (before
working capital changes) for the year ended December 31, 1997 of $127.1 million,
which compares to $101.0 million for 1996, an increase of 26%. Cash flows from
operating activities after consideration of working capital changes were $129.8
million for the year ended December 31, 1997 compared to $101.8 million for
1996. The 1997 increase in revenues and operating cash flows was achieved
primarily through growth in oil and gas production and higher oil and gas
prices. The Company reported a net loss of $16.1 million, or $.53 per share,
after the effects of a $75.2 million non-cash impairment charge ($47.1 million
after tax), substantially all of which was recognized as anticipated in
connection with the American Acquisition.
Excluding the non-cash impairment charge, the Company reported net income of
$8.4 million, or $.23 per share, on total revenue of $80.1 million for the
quarter ended December 31, 1997. This compares to
20
<PAGE>
net income of $7.8 million, or $.28 per share, on total revenue of $54.9 million
for the fourth quarter of 1996. Cash flows from operating activities (before
changes in working capital) for the fourth quarter of 1997 were sharply higher,
increasing 43% to $46.8 million compared to $32.6 million for the fourth quarter
of 1996. Cash flows from operating activities after consideration of working
capital changes were $49.4 million for the fourth quarter of 1997 compared to
$32.7 million for the fourth quarter of 1996. This improvement was primarily
attributable to higher oil and gas production as a result of the American
Acquisition. The Company reported a net loss of $38.7 million, or $1.03 per
share, after the effects of the acquisition impairment charge.
GENERAL
The Company has grown its production and reserves through both acquisitions
and drilling operations. Since 1991, in addition to the American Acquisition,
the Company has completed a significant number of reserve acquisitions including
three acquisitions ranging in size from $87 million to $180 million. Through its
acquisition and leasing programs, the Company has accumulated, as of September
30, 1997 on a pro forma basis, interests in approximately 4.5 million gross (1.3
million net) acres on which to conduct future drilling operations. During the
three years ended December 31, 1996, the Company drilled 745 gross (450 net)
wells with only 34 gross (14 net) dry holes.
For the five-year period ended December 31, 1996 giving pro forma effect to
the American Acquisition, the Company's strategy of growth through acquisitions
and drilling has enabled the Company to realize compound annual growth rates in
production, proved reserves and cash flows provided by operating activities of
39%, 35% and 62% respectively.
BUSINESS STRATEGY
The Company's business strategy is to achieve consistent growth in
production, reserves and operating cash flows. The Company implements this
strategy through the following:
GROWTH THROUGH DRILLING. In 1994, 1995 and 1996, the Company replaced 116%,
120% and 153%, respectively, of its production, adding 251 Bcfe of proved
reserves through the drill bit (including revisions of previous estimates).
During this three year period, finding and development costs of reserves added
through drilling averaged $.95 per Mcfe. The drilling program is the source of
the Company's internally generated growth and is designed to provide a balance
between lower risk development drilling in areas where multiple productive oil
and gas bearing formations are likely to be encountered, thus reducing dry hole
risk, and higher risk exploration drilling which provides the potential for
greater production and reserve growth. On a pro forma basis, approximately $132
million, or 61%, of the Company's 1997 drilling budget has been allocated to
development activities and the balance of $83 million, or 39%, has been
allocated to exploration activities. Subsequent to the American Acquisition, the
Company has a combined staff of 50 geologists, geophysicists and reservoir and
operations engineers with extensive experience in the areas where its reserves
and acreage are located. The staff also has extensive experience in the use of
advanced technologies, including 3-D seismic analysis, computer aided mapping
and reservoir simulation modeling.
STRATEGIC ACQUISITIONS. Since January 1, 1990, the Company has completed
proved reserve acquisitions, including the American Acquisition, aggregating
approximately $1 billion and 1.3 Tcfe. The acquisitions have been geographically
concentrated in core areas where the Company possesses considerable expertise
and realizes economies of scale. The Company principally targets acquisitions
which have further development and exploration potential, have a high degree of
operatorship in order to better control the future exploitation of the
properties and can be integrated with minimal incremental administrative cost.
The Company currently operates 70% of its production.
21
<PAGE>
LARGE PROPERTY BASE. The Company owns interests in approximately 10,000
wells primarily located in Texas, Oklahoma and New Mexico. Due to the Company's
large property base, the loss of production due to unexpected well problems is
minimized while the opportunities to generate positive results through the
application of improved production technologies is enhanced. The Company has
five district offices located central to its principal areas and employs 174
pumpers and other field personnel to provide onsite management of its
properties.
PRICE RISK MANAGEMENT. The Company manages a portion of the risks
associated with decreases in prices of natural gas and, to a lesser extent,
crude oil through Fixed-Price Contracts. The Company's Fixed-Price Contracts
provide a base of predictable cash flows for a portion of the Company's natural
gas and oil sales. Since 1990 through September 30, 1997, the Company has
generated $40 million in additional operating profits through its price risk
management strategies. At September 30, 1997, the pre-tax present value
(discounted at 10%) of the future net revenues for the Company's Fixed-Price
Contracts, based on the differences between contract prices and forward market
prices, was approximately $153 million. Since April 1996, the Company has not
entered into Fixed-Price Contracts with a term in excess of 12 months due to a
reluctance to sell into the prevailing forward market in which prices trend down
or are essentially flat over the next several years. For the first nine months
of 1997, 56% of the Company's production was hedged by Fixed-Price Contracts.
CORE AREAS
The following table sets forth certain information regarding the five core
areas where the Company conducts its principal production, development and
exploration activities.
<TABLE>
<CAPTION>
POTENTIAL
PROVED DAILY GROSS PRODUCING GROSS DRILL
RESERVES(BCFE)(1) PRODUCTION(2) WELLS(3) ACREAGE(3) SITES(3)(4)
------------------- ----------------- ----------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Sonora............................. 505 82 1,680 342,136 575
Mid-Continent...................... 421 99 4,062 916,114 300
Permian............................ 147 38 3,205 1,530,068 500
Gulf Coast......................... 91 40 1,000 609,055 150
Offshore........................... 80 45 83 177,633 30
----- --- ------ ---------- -----
1,244 304 10,030 3,575,006 1,555
----- --- ------ ---------- -----
----- --- ------ ---------- -----
</TABLE>
- ------------------------
(1) As of December 31, 1996 on a pro forma basis giving effect to the American
Acquisition.
(2) Average net daily production for the nine months ended September 30, 1997 on
a pro forma basis giving effect to the American Acquisition.
(3) As of September 30, 1997 on a pro forma basis giving effect to the American
Acquisition.
(4) Includes identified exploration leads.
One of the Company's strategic objectives is to concentrate its activities
in core geographic areas in which it has experience and expertise. Such
geographic concentration permits the Company to achieve economies of scale in
connection with its drilling, production and marketing operations. There is
substantial synergy between the Company's oil and gas properties and the
properties acquired from American. Approximately 70% of the proved reserves
acquired in the American Acquisition are located in, or in close proximity to,
geographic locations in which the Company already owned proved reserves,
primarily in the Gulf Coast and Mid-Continent areas. In addition, the Company
will continue to pursue exploration projects in South Texas and in the Cotton
Valley Reef Trend in East Texas in which American and the Company were jointly
and independently participating before the American Acquisition.
22
<PAGE>
SONORA AREA
The Sonora area, located on the northeast side of the Val Verde Basin of
West Central Texas is comprised of five fields, Sawyer, Shurley Ranch, MMW,
Aldwell Ranch and Whitehead. Production is predominantly from the Canyon
formation at depths ranging from 2,500 to 6,500 feet and the Strawn formation at
depths ranging from 5,000 to 9,000 feet. The Company has executed an aggressive
developmental drilling program in the Sonora area since 1993 and has significant
further opportunities through infill drilling (40 acre density) and recompletion
possibilities. For 1998, the Company plans to drill approximately 128 wells in
the Sonora area. The Company has identified 575 undrilled locations of which 111
have been assigned proved undeveloped reserves.
MID-CONTINENT AREA
The Company's properties in the Mid-Continent area are primarily located in
and along the shelf of the Anadarko basin and in Southern Oklahoma. Production
is predominantly natural gas from numerous formations of Pennsylvanian and
Pre-Pennsylvanian aged rock. Productive depths range from 3,000 to 17,000 feet.
For 1998, the Company plans to drill approximately 112 wells in the
Mid-Continent area. The Company has identified 300 potential undrilled locations
of which 100 have been assigned proved undeveloped reserves.
SON OF BEVO. The Company is operator of and holds a 35% working interest in
this Texas Panhandle prospect. The target zone is the Upper Morrow at a depth at
10,000 feet. After evaluating the results of a 30 square mile 3-D seismic shoot,
the Company drilled five wells in the prospect, successfully completing four
wells with combined initial production rates of 9.5 MMcfe per day.
PERMIAN AREA
The Company is actively involved in drilling development and exploration
wells in the Delaware basin of Southeast New Mexico and the Val Verde basin and
Spraberry trend of West Texas. The primary drilling objectives in this region
are the Delaware, Spraberry, Wolfcamp and Morrow sands. For 1998, the Company
plans to drill approximately 62 wells in the Permian area. The Company has
identified 500 undrilled locations, of which 221 have been assigned proved
undeveloped reserves.
PITCHFORK RANCH. The Company has an option to shoot seismic, acquire leases
and drill on approximately 140,000 acres of the Pitchfork Ranch located in North
Texas over the next three years. The Company will be operator with at least a
77.5% working interest. Target zones are the Tannehill sand at a depth of 4,500
feet and the Strawn lime at 5,500 feet. The Company has completed a 30 square
mile 3-D seismic project in the southern portion of the Pitchfork Ranch and, in
September 1997, commenced drilling the first of seven wells planned before
year-end. As of December 31, 1997, the Company had drilled three discoveries and
one development well with combined initial production of 450 Bbls per day.
GULF COAST AREA
The Company's properties in the Gulf Coast area consist of varying interests
in the A.W.P. (Olmos) Field and the North Tatum Field in East Texas as well as
prospective Frio and Wilcox production in the Yoakum Gorge and Southwest Speaks
fields and pinnacle reef production in the Cotton Valley Reef Trend.
YOAKUM GORGE. The Yoakum Gorge prospect, in which the Company has
approximately an 87.5% working interest, is located in Lavaca County, Texas.
Earlier this year, the Company completed the acquisition of 150 square miles of
high-fold 3-D seismic data and began evaluating drilling opportunities on its
60,000 gross acres. The Company began drilling for the shallow targets in 1995
and has successfully completed 23 of 27 wells. The Company expects to drill
approximately 22 shallow wells during 1998. The first Lower Wilcox test was
recently drilled to a total depth of approximately 15,700 feet and logged
approximately 180 feet of pay in multiple Lower Wilcox sands. This well tested
at an initial production rate
23
<PAGE>
in excess of 7 MMcfe per day from two of 12 productive sands. The Company owns a
100% working interest in this discovery.
SOUTHWEST SPEAKS. The Company has a 45% working interest in this Lower
Wilcox project, which is located east of Yoakum Gorge. Over the past 18 months,
the Company has drilled and completed four wells in this project and a fifth
well is currently being drilled. Current gross production is 21 MMcf per day
with additional volumes expected as the result of well stimulation plans and a
recent production facility upgrade.
COTTON VALLEY REEF TREND. The Company has varying interests in
approximately 100,000 acres in the Cotton Valley Reef Trend of East Texas. Last
month, the Company finished drilling operations on its initial pinnacle reef
target and logged approximately 240 feet of pay in the Cotton Valley Reef. The
Company owns a 62% working interest in this discovery with initial production
anticipated in the first quarter of 1998. The Company has acquired 3-D seismic
data on approximately 130 square miles within the Cotton Valley Reef Trend and
currently plans to drill two to four wells in the Cotton Valley Reef Trend
during 1998.
OFFSHORE AREA
The Company owns varying interests in ten operated platforms in the Gulf of
Mexico in water depths ranging from 20 to 245 feet and owns varying interests in
eight nonoperated platforms. In the Gulf of Mexico, the Company's present
leasing and seismic acquisition activities are focused in Texas State Waters in
water depths ranging from 20 to 60 feet. With the advent of ocean bottom
cabling, high quality 3-D seismic data can now be acquired in the shallow
waters. The Company presently has acquired 2,100 miles of recently shot seismic
data. The Company plans to drill up to 11 prospects during 1998 and has
contracted for a drilling rig scheduled to commence drilling in February 1998.
The Oil Pollution Act, as recently amended ("OPA"), requires the lessee or
permittee of the offshore area in which a covered offshore facility is located
to establish and maintain evidence of financial responsibility in the amount of
$35 million, which may be increased to $150 million in certain circumstances, to
cover liabilities related to an oil spill for which such person is statutorily
responsible. On March 25, 1997, the Minerals Management Service ("MMS") proposed
regulations to implement these financial responsibility requirements under OPA.
The Company cannot predict the final form of any financial responsibility
regulations that will be adopted by the MMS, but the impact of any such
regulations should not be any more adverse to the Company than it will be to
other similarly situated companies. OPA also subjects responsible parties to
strict, joint and several and potentially unlimited liability for removal costs
and certain other damages caused by an oil spill covered by the statute.
NIAGARA MOHAWK MATTERS
The Company is a party to two Fixed-Price Contracts, both long-term physical
delivery contracts, with independent power producers ("IPPs") which sell
electrical power under firm, fixed-price contracts to Niagara Mohawk Corporation
("NIMO"), a New York state utility. The Company's Fixed-Price Contracts with
such IPPs covered an aggregate of 98 Bcf of natural gas as of September 30,
1997. At September 30, 1997, the net present value of the differential between
the fixed prices provided by these contracts and forward market prices, as
adjusted for basis and discounted at 10%, was $123 million, or 80% of the net
present value attributable to all of the Company's Fixed-Price Contracts. This
premium in the fixed prices in these contracts is not reflected in the Company's
financial statements until realized. Such contracts contributed $0.9 million to
1996 revenues. The ability of such IPPs to perform their obligations to the
Company is dependent on the continued performance by NIMO of its power purchase
obligations. NIMO has taken aggressive regulatory, judicial and contractual
actions in recent years seeking to curtail power purchase obligations, including
its obligations to the IPPs that are counterparties to the Company's Fixed-
24
<PAGE>
Price Contracts described above, and has further stated that its future
financial prospects are dependent on its ability to resolve these obligations,
along with a number of other matters.
On July 9, 1997, NIMO entered into a Master Restructuring Agreement (the
"MRA") with 16 IPPs, including the Company's counterparties. Pursuant to the
MRA, the power purchase agreements between NIMO and the IPPs would be
terminated, restated or amended, in exchange for an aggregate of $3.6 billion in
cash, $50 million in notes or cash, 46 million shares of NIMO common stock and
certain fixed-price swap contracts. The allocation of the consideration among
the IPPs has not been disclosed. The closing of the MRA is conditioned upon,
among other things, NIMO and the IPPs negotiating their individual restated and
amended contracts, the receipt of all regulatory approvals, the receipt of all
consents by third parties necessary for the transactions contemplated by the MRA
(including the termination of the existing power purchase contracts and the
termination or amendment of all related third party agreements), the IPPs
entering into new third party arrangements which will enable each IPP to
restructure its projects on a reasonably satisfactory economic basis, NIMO
having completed all necessary financing arrangements and NIMO and the IPPs
having received all necessary approvals from their respective boards of
directors, shareholders and partners.
Discussions between the Company and its IPP counterparties have commenced.
Any proceeds received in consideration of termination of a Fixed-Price Contract
would be used to repay indebtedness outstanding under the Bank Credit Facility
and would be reflected in the Company's balance sheet as deferred hedging gains
to be amortized into oil and gas revenues over the original life of the
underlying contracts. However, the amount of any proceeds to be received by the
Company is subject to negotiation with the Company's counterparties and
contingent upon the counterparties participating in the closing of the MRA. At
this time, the Company cannot predict whether the conditions precedent to the
closing of the MRA will ultimately be satisfied. Negotiations with the Company's
counterparties are governed by confidentiality agreements. Cancellation of the
contracts would subject a greater portion of the Company's oil and gas
production to market prices, which in a low oil and gas price environment could
adversely affect the carrying value of the Company's oil and gas properties and
could otherwise have an adverse effect on the Company.
25
<PAGE>
DESCRIPTION OF EXCHANGE NOTES
SUMMARY DESCRIPTION OF THE EXCHANGE NOTES
The Existing Notes are and the Exchange Notes will be issued under an
Indenture, dated as of December 11, 1997 (the "Indenture"), between the Company
and LaSalle National Bank, as Trustee (the "Trustee"). The terms of the Exchange
Notes and the Existing Notes are identical in all material respects, except for
certain transfer restrictions relating to the Existing Notes. The Exchange Notes
will bear interest from the most recent date to which interest has been paid on
the Existing Notes or, if no interest has been paid on the Existing Notes, from
December 11, 1997. Accordingly, registered holders of Exchange Notes on the
relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the most
recent date to which interest has been paid on the Existing Notes or, if no
interest has been paid, from December 11, 1997. Existing Notes accepted for
exchange will cease to accrue interest from and after the date of consummation
of the Exchange Offer. Holders whose Existing Notes are accepted for exchange
will not receive any payment in respect of interest on such Existing Notes
otherwise payable on any interest payment date the record date for which occurs
on or after consummation of the Exchange Offer.
TERMS OF THE EXCHANGE NOTES
The Exchange Notes will be unsecured senior obligations of the Company,
limited to $200 million aggregate principal amount, and will mature on December
1, 2007. The Exchange Notes will bear interest at the rate per annum shown on
the cover page hereof from December 11, 1997, or from the most recent date to
which interest has been paid or provided for, payable semiannually to Holders of
record at the close of business on the May 15 or November 15 immediately
preceding the interest payment date on June 1 and December 1 of each year,
commencing June 1, 1998. The Company will pay interest on overdue principal at
1% per annum in excess of such rate, and it will pay interest on overdue
installments of interest at such higher rate to the extent lawful. Interest will
be paid on a 360-day year, twelve 30-day month basis.
The interest rate on the Exchange Notes is subject to increase in certain
circumstances if the Company does not file a registration statement relating to
the Exchange Offer or if the registration statement is not declared effective on
a timely basis or if certain other conditions are not satisfied, all as further
described under "The Exchange Offer; Registration Rights."
OPTIONAL REDEMPTION
The Exchange Notes will be redeemable at any time, at the option of the
Company, in whole or from time to time in part, upon not less than 30 and not
more than 60 days' notice as provided in the Indenture, on any date prior to
maturity (the "Redemption Date") at a price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on an interest payment date that is on or prior to the Redemption Date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the Exchange
Notes plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Exchange Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the Redemption Date,
of:
(A) each interest payment that, but for such redemption, would have
been payable on the Exchange Note (or portion thereof) being redeemed on
each interest payment date occurring after the Redemption Date (excluding
any accrued interest for the period prior to the Redemption Date); and
26
<PAGE>
(B) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Exchange Note (or portion
thereof) being redeemed; over
(ii) the principal amount of the Exchange Note (or portion thereof)
being redeemed.
The present values of interest and principal payments referred to in clause
(i) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a discount rate equal to the Treasury Yield (as defined below) plus 20 basis
points.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; PROVIDED that
if the Company fails to make such appointment at least 45 business days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make such calculation, such calculation will be made by Salomon Brothers Inc
or, if such firm is unwilling or unable to make such calculation, by an
independent investment banking institution of national standing appointed by the
Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield" means a
rate of interest per annum equal to the weekly average yield to maturity of
United States Treasury Notes that have a constant maturity that corresponds to
the remaining term to maturity of the Exchange Notes, calculated to the nearest
1/12th of a year (the "Remaining Term"). The Treasury Yield will be determined
as of the third business day immediately preceding the applicable Redemption
Date.
The weekly average yields of United States Treasury Notes will be determined
by reference to the most recent statistical release published by the Federal
Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or
any successor release (the "H.15 Statistical Release"). If the H.15 Statistical
Release sets forth a weekly average yield for United States Treasury Notes
having a constant maturity that is the same as the Remaining Term, then the
Treasury Yield will be equal to such weekly average yield. In all other cases,
the Treasury Yield will be calculated by interpolation, on a straight-line
basis, between the weekly average yields on the United States Treasury Notes
that have a constant maturity closest to and greater than the Remaining Term and
the United States Treasury Notes that have a constant maturity closest to and
less than the Remaining Term (in each case as set forth in the H.15 Statistical
Release). Any weekly average yields so calculated by interpolation will be
rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above
being rounded upward. If weekly average yields for United States Treasury Notes
are not available in the H.15 Statistical Release or otherwise, then the
Treasury Yield will be calculated by interpolation of comparable rates selected
by the Independent Investment Banker.
In the case of any partial redemption, selection of the Notes for redemption
will be made by the Trustee on a pro rata basis, by lot or by such other method
as the Trustee in its sole discretion shall deem to be fair and appropriate,
although no Note of $1,000 in original principal amount or less shall be
redeemed in part. If any Note is to be redeemed in part only, the notice of
redemption relating to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note.
RANKING
The indebtedness evidenced by the Existing Notes is and the indebtedness
evidenced by the Exchange Notes will be senior unsecured obligations of the
Company, will rank PARI PASSU in right of payment with all existing and future
senior indebtedness of the Company and will be senior in right of payments to
all existing and future subordinated indebtedness of the Company. As of December
31, 1997, the Company
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had $261 million principal amount of borrowings outstanding under the Bank
Credit Facility, with which the Notes would rank PARI PASSU.
BOOK-ENTRY, DELIVERY AND FORM
Except as described below, the Notes will initially be issued in the form of
one or more Global Notes. The Global Notes will be deposited with, or on behalf
of, the Depository and registered in the name of the Depository or its nominee.
Except as set forth below, the Global Notes may be transferred, in whole and not
in part, only to the Depository or another nominee of the Depository. Investors
may hold their beneficial interests in the Global Notes directly through the
Depository if they have an account with the Depository or indirectly through
organizations which have accounts with the Depository.
Upon the transfer of a Note in definitive form, such Note will, unless the
Global Notes have previously been exchanged for Notes in definitive form, be
exchanged for an interest in the Global Notes representing the principal amount
of Notes being transferred, with certain exceptions for transfers pursuant to
Rule 144.
Notes originally purchased by persons outside the United States pursuant to
sales in accordance with Regulation S under the Securities Act will be
represented upon issuance by a temporary global Note certificate in fully
registered form without interest coupons (the "Temporary Certificate") which
will not be exchangeable for certificated Notes until the expiration of the
"40-day restricted period" within the meaning of Rule 903(c)(3) of Regulation S
under the Securities Act. The Temporary Note will be registered in the name of,
and held by, a temporary certificate holder until the expiration of such 40-day
period, at which time the Temporary Certificate will be delivered to the Trustee
in exchange for certificated Notes registered in the names requested by such
temporary certificate holder.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of institutions that have accounts
with the Depository ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (which may
include the Initial Purchasers), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depository's book-entry system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly (collectively, the "indirect participants").
Holders who are not participants may beneficially own securities held by or on
behalf of the Depository only through participants or indirect participants.
Upon the issuance of the Global Notes, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Notes to the accounts of participants. The accounts
to be credited shall be designated by the Initial Purchasers of such Notes.
Ownership of beneficial interests in the Global Notes will be limited to
participants or persons that may hold interests through participants. Any person
acquiring an interest in a Global Note through an offshore transaction in
reliance on Regulation S may hold such interest through CEDEL or Euroclear.
Ownership of beneficial interests in the Global Notes will be shown on, and the
transfer of those ownership interests will be effected only through, records
maintained by the Depository (with respect to participants' interest) and such
participants (with respect to the owners of beneficial interests in the Global
Notes other than participants). The laws of some jurisdictions may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the Global Notes.
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So long as the Depository, or its nominee, is the registered holder and
owner of the Global Notes, the Depository or such nominee, as the case may be,
will be considered the sole legal owner and holder of the related Notes for all
purposes of such Notes and the Indenture. Except as set forth below, owners of
beneficial interests in the Global Notes will not be entitled to have the Notes
represented by the Global Notes registered in their names, will not receive or
be entitled to receive physical delivery of certificated Notes in definitive
form and will not be considered to be the owners or holders of any Notes under
the Global Notes. The Company understands that under existing industry practice,
in the event an owner of a beneficial interest in the Global Notes desires to
take any action that the Depository, as the holder of the Global Notes, is
entitled to take, the Depository would authorize the participants to take such
action, and that the participants would authorize beneficial owners owning
through such participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal and interest on Notes represented by the Global Notes
registered in the name of and held by the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
and holder of the Global Notes.
The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Notes as
shown on the records of the Depository or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in the Global
Notes held through such participants will be governed by standing instructions
and customary practices and will be the responsibility of such participants. The
Company will not have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the Global Notes for any Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
the relationship between such participants and the owners of beneficial
interests in the Global Notes owning through such participants.
Unless and until it is exchanged in whole or in part for certificated Notes
in definitive form, the Global Notes may not be transferred except as a whole by
the Depository to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of the
Depository, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trustee nor the Company will have any responsibility for the performance by the
Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
CERTIFICATED NOTES
The Notes represented by the Global Notes are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of U.S.
$1,000 and integral multiples thereof if (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for the Global Notes or
if at any time the Depository ceases to be a clearing agency registered under
the Exchange Act and a successor Depository is not appointed by the Company
within 90 days, (ii) the Company in its discretion at any time determines not to
have all of the Notes represented by the Global Notes, (iii) an Event of Default
has occurred and is continuing or (iv) upon the occurrence of certain other
events. Any Note that is exchangeable pursuant to the preceding sentence is
exchangeable for certificated Notes issuable in authorized denominations and
registered in such names as the Depository shall direct. Subject to the
foregoing, the Global Notes are not exchangeable, except for a Global Note of
the same aggregate denomination to be registered in the name of the Depository
or its nominee.
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SAME-DAY PAYMENT
The Indenture requires that payments in respect of Notes (including
principal, premium and interest) be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof or, if no such
account is specified, by mailing a check to each such Holder's registered
address.
CERTAIN COVENANTS
The Indenture does not limit the amount of indebtedness or other obligations
that may be incurred by the Company and its subsidiaries and does not contain
provisions which would give holders of the Notes the right to require the
Company to repurchase their Notes in the event of a decline in the credit rating
of the Company's debt securities. The Indenture contains covenants including,
among others, the following:
LIMITATION ON LIENS. The Indenture provides that the Company will not, and
will not permit any of its Subsidiaries to, create, incur or otherwise cause or
suffer to exist or become effective any Liens of any kind upon any Principal
Property or any shares of stock or Indebtedness of any Subsidiary that owns or
leases any Principal Property (whether such Principal Property, shares of stock
or Indebtedness are now owned or hereafter acquired) unless all payments due
under the Indenture and the Notes are secured on an equal and ratable basis with
the obligations so secured until such time as such obligation is no longer
secured by a Lien, except for Permitted Liens. See also "Exempted Indebtedness"
below.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Indenture provides that
neither the Company nor any Subsidiary will enter into any Sale and Leaseback
Transaction with respect to any Principal Property unless either (a) the Company
or such Subsidiary would be entitled, pursuant to the provisions of the
Indenture, to incur Indebtedness secured by a Lien on the property to be leased
without equally and ratably securing the Notes or (b) the Company, within 180
days after the effective date of such transaction, applies to the voluntary
retirement of its funded debt an amount equal to the value of such transaction,
defined as the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value, in the opinion of the Board of Directors, of
the leased property at the time such transaction was entered into. See also
"Exempted Indebtedness" below.
EXEMPTED INDEBTEDNESS. Notwithstanding the foregoing limitations on Liens
and Sale and Leaseback Transactions, the Company and its Subsidiaries may issue,
assume, or guarantee Indebtedness secured by a Lien without securing the Notes,
or may enter into Sale and Leaseback Transactions without retiring funded debt,
or enter into a combination of such transactions, if the sum of the principal
amount of all such Indebtedness and the aggregate value of all such Sale and
Leaseback Transactions does not at any time exceed 15% of the Adjusted
Consolidated Net Tangible Assets of the Company.
MERGER AND CONSOLIDATION. The Indenture provides that the Company, without
the consent of the Holders of any of the outstanding Notes, may consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person or may permit any Person to
consolidate with or merge into, or transfer or lease its properties
substantially as an entirety to, the Company; PROVIDED that (a) the successor,
transferee or lessee is organized under the laws of any United States
jurisdiction; (b) the successor, transferee or lessee, if other than the
Company, expressly assumes the Company's obligations under the Indenture and the
Notes by means of a supplemental indenture entered into with the Trustee; (c)
after giving effect to the transaction, no Default shall have occurred and be
continuing; and (d) certain other conditions are met.
Under any consolidation by the Company with, or merger by the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety as described in the preceding
paragraph, the successor resulting from such consolidation or into which the
Company is merged or the transferee or lessee to which such conveyance, transfer
or lease is made, will succeed to, and be substituted for, and may exercise
every right and power of, the Company under the
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Indenture, and thereafter, except in the case of a lease, the predecessor (if
still in existence) will be released from its obligations and covenants under
the Indenture and the Notes.
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture to be a (i) default in the
payment of any interest upon any of the Notes for 30 days or more after such
payment is due, (ii) default in the payment of the principal of and premium, if
any, on any of the Notes when due, (iii) default by the Company in the
performance of any of its other covenants in the Indenture which will not have
been remedied by the end of a period of 60 days after written notice to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the outstanding Notes, and (iv) certain events
of bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary.
The Indenture provides that if an Event of Default (other than of a type
referred to in clause (iv) of the preceding paragraph) shall have occurred and
is continuing, either the Trustee or the Holders of at least 25% in principal
amount of the outstanding Notes may declare the principal amount of all Notes to
be immediately due and payable. Such declaration may be rescinded if certain
conditions are satisfied. If an Event of Default of the type referred to in
clause (iv) of the preceding paragraph shall have occurred, the principal amount
of the outstanding Notes shall automatically become immediately due and payable.
The Indenture also provides that the Holders of not less than a majority in
principal amount of the outstanding Notes may direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; PROVIDED that such
direction is not in conflict with any rule of law or with the Indenture. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
The Indenture contains provisions entitling the Trustee, subject to the duty
of the Trustee during the continuance of an Event of Default to act with the
required standard of care, to be indemnified by the Holders of Notes before
proceeding to exercise any right or power under the Indenture at the request of
the Holders of Notes.
No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as Trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder of
a Note for enforcement of payment of the principal of and premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note.
The Indenture requires the Company to file annually with the Trustee a
certificate, executed by a designated officer of the Company, stating to the
best of his knowledge that the Company is not in default under certain covenants
under the Indenture or if he has knowledge that the Company is in such default,
specifying such default.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the consent
of the Holders of a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Notes) and any past default or compliance with any provisions may also be
waived with the consent of the Holders of a majority in principal amount of the
Notes then outstanding. However, without the consent of each Holder of an
outstanding Note affected thereby, no amendment may, among other things, (i)
reduce the amount of Notes whose Holders must consent to an
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amendment, (ii) reduce the rate of or extend the time for payment of interest on
any Note, (iii) reduce the principal of or extend the Stated Maturity of any
Note, (iv) reduce the amount payable upon the redemption of any Note or change
the time at which any Note may be redeemed as described under "--Optional
Redemption" above, (v) make any Note payable in money other than that stated in
the Note, (vi) impair the right of any Holder of the Notes to receive payment of
principal of and interest on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such Holder's Notes or (vii) make any change in the amendment
provisions which require each Holder's consent or in the waiver provisions.
Without the consent of any Holder of the Notes, the Company and Trustee may
amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to
provide for the assumption by a successor corporation of the obligations of the
Company under the Indenture, to provide for uncertificated Notes in addition to
or in place of certificated Notes (PROVIDED that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code), to add guarantees with respect to the Notes, to secure the Notes,
to add to the covenants of the Company for the benefit of the Holders of the
Notes or to surrender any right or power conferred upon the Company, to make any
change that does not adversely affect the rights of any Holder of the Notes or
to comply with any requirement of the SEC in connection with the qualification
of the Indenture under the Trust Indenture Act of 1939, as amended.
The consent of the Holders of the Notes is not necessary under the Indenture
to approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to Holders of the Notes a notice briefly describing such
amendment. However, the failure to give such notice to all Holders of the Notes,
or any defect therein, will not impair or affect the validity of the amendment.
TRANSFER
The Notes will be issued in registered form and will be transferable only
upon the surrender of the Notes being transferred for registration of transfer.
The Company may require payment of a sum sufficient to cover any tax, assessment
or other governmental charge payable in connection with certain transfers and
exchanges.
DEFEASANCE
The Company at any time may terminate all its obligations under the Notes
and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate its obligations under the covenants
described under "--Certain Covenants" (other than the covenant described under
"--Certain Covenants Merger and Consolidation"), and the bankruptcy provisions
with respect to Significant Subsidiaries described under "--Events of Default"
above and the limitations contained in clauses (c) and (d) under "--Certain
Covenants--Merger and Consolidation" above ("covenant defeasance").
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 Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iii) or (iv) under "--Events of Default"
above or because of the failure of the Company to comply with clause (c) or (d)
under "--Certain Covenants--Merger and Consolidation" above.
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In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of Counsel to the
effect that Holders of the Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such deposit and defeasance and
will be subject to U.S. federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if such deposit and
defeasance had not occurred (and, in the case of legal defeasance only, such
Opinion of Counsel must be based on a ruling of the Internal Revenue Service or
other change in applicable U.S. federal income tax law).
CONCERNING THE TRUSTEE
LaSalle National Bank is the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with regard to the Notes.
The Holders of a majority in principal amount of the outstanding Notes will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that if an Event of Default occurs (and is
not cured), the Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or powers under the Indenture at the request of any Holder of Notes,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of the Indenture.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, the remainder of:
(a) the sum of (i) discounted future net revenues from proved oil and
gas reserves of the Company and its Subsidiaries calculated in accordance
with SEC guidelines (including adjustment for prices payable to the Company
and its Subsidiaries under Oil and Gas Hedging Contracts) before any state,
Federal or foreign income taxes, as estimated by the Company and confirmed
by a nationally recognized firm of independent petroleum engineers in a
reserve report prepared as of the end of the Company's most recently
completed fiscal year for which audited financial statements are available,
as increased by, as of the date of determination, the estimated discounted
future net revenues from (A) estimated proved oil and gas reserves acquired
since such year-end, which reserves were not reflected in such year-end
reserve report, and (B) estimated oil and gas reserves attributable to
upward revisions of estimates of proved oil and gas reserves since such
year-end due to exploration, development or exploitation activities, in each
case calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year-end reserve report), and decreased by, as of the date
of determination, the estimated discounted future net revenues from (C)
estimated proved oil and gas reserves produced or disposed of since such
year-end and (D) estimated oil and gas reserves attributable to downward
revisions of estimates of proved oil and gas reserves since such year-end
due to changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in each
case calculated in accordance with SEC guidelines (utilizing the
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prices utilized in such year-end reserve report); PROVIDED that, in the case
of each of the determinations made pursuant to clauses (A) through (D), such
increases and decreases shall be as estimated by the Company's petroleum
engineers, unless there is a Material Change as a result of such
acquisitions, dispositions or revisions, in which event the discounted
future net revenues utilized for purposes of this clause (a)(i) shall be
confirmed in writing by a nationally recognized firm of independent
petroleum engineers, (ii) the capitalized costs that are attributable to oil
and gas properties of the Company and its Subsidiaries to which no proved
oil and gas reserves are attributable, based on the Company's books and
records as of a date no earlier than the date of the Company's latest
available annual or quarterly financial statements, (iii) the Net Working
Capital on a date no earlier than the date of the Company's latest annual or
quarterly financial statements and (iv) the greater of (A) the net book
value on a date no earlier than the date of the Company's latest annual or
quarterly financial statements and (B) the appraised value, as estimated by
independent appraisers, of other tangible assets of the Company and its
Subsidiaries, as of the date no earlier than the date of the Company's
latest audited financial statements, minus (b) the sum of (i) Minority
Interests, (ii) any net gas balancing liabilities of the Company and its
Subsidiaries reflected in the Company's latest audited financial statements,
(iii) to the extent included in (a)(i) above, the discounted future net
revenues, calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Company's year-end reserve report), attributable to reserves
which are required to be delivered to third parties to fully satisfy the
obligations of the Company and its Subsidiaries with respect to Volumetric
Production Payments (determined, if applicable, using the schedules
specified with respect thereto) and (iv) the discounted future net revenues,
calculated in accordance with SEC guidelines, attributable to reserves
subject to Dollar-Denominated Production Payments which, based on the
estimates of production and price assumptions included in determining the
discounted future net revenues specified in (a)(i) above, would be necessary
to fully satisfy the payment obligations of the Company and its Subsidiaries
with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto). If the
Company changes its method of accounting from the successful efforts method
to the full cost or a similar method of accounting, "Adjusted Consolidated
Net Tangible Assets" will continue to be calculated as if the Company were
still using the successful efforts method of accounting.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"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, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with such principles; and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any Preferred Stock,
but excluding any debt securities convertible into such equity.
"Code" means the Internal Revenue Code of 1986, as amended.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
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"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, 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 opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Holder" or "Noteholder" means the Person in whose name a Note is registered
on the Registrar's books.
"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), but excluding trade accounts payable arising in the ordinary course
of business; (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
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 property
(including, without limitation, 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 of 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 for 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) obligations
in respect of Currency Agreements, Oil and Gas Hedging Contracts and Interest
Rate Agreements.
"Interest Rate Agreement" means in respect of a Person any interest rate
swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Issue Date" means the date on which the Notes are originally issued.
"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, without
limitation, 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 or property leased
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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).
"Material Change" means an increase or decrease (except to the extent
resulting from changes in prices) of more than 30% during a fiscal quarter in
the estimated discounted future net revenues from proved oil and gas reserves of
the Company and its Subsidiaries, calculated in accordance with clause (a)(i) of
the definition of Adjusted Consolidated Net Tangible Assets; PROVIDED, HOWEVER,
that the following will be excluded from the calculation of Material Change: (a)
any acquisitions during the quarter of oil and gas reserves with respect to
which the Company's estimate of the discounted future net revenues from proved
oil and gas reserves has been confirmed by independent petroleum engineers; and
(b) any dispositions of Properties during such quarter.
"Minority Interest" means any shares of stock of any class of a Subsidiary
that are not owned by the Company or a Subsidiary.
"Net Working Capital" means (a) all current assets of the Company and its
Subsidiaries, less (b) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness, in each case
as set forth in consolidated financial statements of the Company prepared in
accordance with GAAP.
"Oil and Gas Business" means the business of exploiting, exploring for,
developing, acquiring, operating, producing, processing, gathering, marketing,
storing, selling, hedging, treating, swapping, refining and transporting
hydrocarbons and other related energy businesses.
"Oil and Gas Hedging Contract" means, with respect to any Person, any
agreement or arrangement, or any combination thereof, relating to oil and gas or
other hydrocarbon prices, transportation or basis costs or differentials or
other similar financial factors, that is customary in the Oil and Gas Business
and is entered into by such Person in the ordinary course of its business for
the purpose of limiting or managing risks associated with fluctuations in such
prices, costs, differentials or similar factors.
"Oil and Gas Liens" means (a) Liens on any specific property or any interest
therein, construction thereon or improvement thereto to secure all or any part
of the costs incurred for surveying, exploration, drilling, extraction,
development, operation, production, construction, alteration, repair or
improvement of, in, under or on such property and the plugging and abandonment
of wells located thereon (it being understood that, in the case of oil and gas
producing properties, or any interest therein, costs incurred for "development"
shall include costs incurred for all facilities relating to such properties or
to projects, ventures or other arrangements of which such properties form a part
or which relate to such properties or interests); (b) Liens on an oil or gas
producing property to secure obligations incurred or guarantees of obligations
incurred in connection with or necessarily incidental to commitments for the
purchase or sale of, or the transportation or distribution of, the products
derived from such property; (c) Liens arising under partnership agreements, oil
and gas leases, overriding royalty agreements, net profits agreements,
production payment agreements, royalty trust agreements, incentive compensation
programs for geologists, geophysicists and other providers of technical services
to the Company or a Subsidiary of the Company, master limited partnership
agreements, farmin agreements, farmout agreements, division orders, contracts
for the sale, purchase, exchange, transportation, gathering or processing of
oil, gas or other hydrocarbons, unitizations and pooling designations,
declarations, orders and agreements, development agreements, operating
agreements, production sales contracts, area of mutual interest agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or
geophysical permits or agreements, and other agreements which are customary in
the Oil and Gas Business; PROVIDED, HOWEVER, in all instances that such Liens
are limited to the assets that are the subject of the relevant agreement,
program, order or contract; (d) Liens arising in connection with Production
Payments and Reserve Sales; and (e) Liens on pipelines or pipeline facilities
that arise by operation of law.
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"Permitted Liens" means, with respect to any Person: (i) Liens existing on
the Issue Date; (ii) Liens on property or assets of, or any shares of stock of
or secured debt of, any corporation existing at the time such corporation
becomes a Subsidiary of the Company or at the time such corporation is merged
into the Company or any of its Subsidiaries; (iii) Liens in favor of the Company
or any of its Subsidiaries; (iv) Liens in favor of governmental bodies to secure
progress or advance payments; (v) Liens securing industrial revenue or pollution
control bonds; (vi) Liens on Property to secure Indebtedness incurred for the
purpose of (A) financing all or any part of the purchase price of such Property
incurred prior to, at the time of, or within 180 days after, the acquisition of
such Property or (B) financing all or any part of the cost of construction,
improvement, development or expansion of any such Property; (vii) statutory
liens or landlords', carriers', warehouseman's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made therefor; (viii) Liens on current assets of Subsidiaries securing
Indebtedness of such Subsidiaries; (ix) Oil and Gas Liens; (x) Liens securing
Oil and Gas Hedging Contracts; (xi) any Lien incurred in the ordinary course of
business incidental to the conduct of the business of the Company or the
ownership of its Property including rights of collecting banks having rights of
setoff, revocation, refund or chargeback with respect to money or instruments of
the Company on deposit with or in the possession of such banks; (xii) Liens
incurred to secure performance of obligations with respect to statutory or
regulatory requirements, performance or return-of-money bonds, surety bonds or
other obligations of a like nature and incurred in a manner consistent with
industry practice; (xiii) Liens for taxes, assessments and governmental charges
not yet due or the validity of which are being contested in good faith by
appropriate proceedings, promptly instituted and diligently conducted, and for
which adequate reserves have been established to the extent required by GAAP as
in effect at such time; and (xiv) any extensions, substitutions, replacements or
renewals in whole or in part of a Lien (an "existing Lien") enumerated in
clauses (i) through (xiii) above; PROVIDED that the Lien may not extend beyond
(A) the Property or Indebtedness subject to the existing Lien and (B)
improvements and construction on such Property and the Indebtedness secured by
the Lien may not exceed the Indebtedness secured at the time by the existing
Lien.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"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.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Principal Property" means any Property owned or leased by the Company or
any Subsidiary, the gross book value of which exceeds two percent of Adjusted
Consolidated Net Tangible Assets.
"Production Payments and Reserve Sales" means the grant or transfer by the
Company or a Subsidiary of the Company to any Person of a royalty, overriding
royalty, net profits interest, production payment (whether volumetric or dollar
denominated), partnership or other interest in oil and gas properties, reserves
or the right to receive all or a portion of the production or the proceeds from
the sale of production attributable to such properties where the holder of such
interest has recourse solely to such production or proceeds of production,
subject to the obligation of the grantor or transferor to operate and maintain,
or cause the subject interests to be operated and maintained, in a reasonably
prudent manner or other customary standard or subject to the obligation of the
grantor or transferor to indemnify for environmental, title or other matters
customary in the Oil and Gas Business, including any such grants or
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transfers pursuant to incentive compensation programs on terms that are
reasonably customary in the Oil and Gas Business for geologists, geophysicists
and other providers of technical services to the Company or a Subsidiary of the
Company.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (1) temporary leases for a term, including renewals
at the option of the lessee, of not more than five years, (2) leases between the
Company and a Subsidiary or between Subsidiaries, (3) leases of Principal
Property executed by the time of, or within 24 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (4) arrangements pursuant
to any provision of law with an effect similar to the former Section 168(f)(8)
of the Internal Revenue Code of 1954.
"SEC" means the Securities and Exchange Commission.
"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"Stated Maturity", when used with respect to any security or any installment
of interest thereon, means the date specified in such security as the fixed date
on which the principal of such security or such installment of interest is due
and payable.
"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.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
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.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Wholly-Owned Subsidiary" means a Subsidiary all the Capital Stock of which
(other than directors' qualifying shares) is owned by the Company or one or more
Wholly-Owned Subsidiaries.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Existing Notes were originally sold by the Company on December 11, 1997,
to the Initial Purchasers pursuant to the Purchase Agreement. The Initial
Purchasers subsequently resold the Existing Notes to qualified institutional
buyers pursuant to Rule 144A under the Securities Act, or outside the United
States in compliance with Regulation S under the Securities Act. Pursuant to the
Purchase Agreement the Company entered into a registration rights agreement with
the Initial Purchasers (the "Registration Agreement") pursuant to which the
Company agreed, for the benefit of the holders of the Existing Notes, at the
Company's cost, to (i) file a registration statement (the "Exchange Offer
Registration Statement") within 150 days after the date of original issuance of
such Existing Notes (the "Issue Date") with the Commission with respect to
registered offers to exchange each of such Existing Notes for debentures (the
"Exchange Notes") with terms identical in all material respects thereto (except
that the Exchange Notes will not contain terms with respect to transfer
restrictions or the special interest payments described below), and (ii) use its
best efforts to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act within 180 days after the Issue Date.
Promptly after the Exchange Offer Registration Statement is declared effective,
the Company will offer the Exchange Notes in exchange for surrender of the
Existing Notes (the "Exchange Offer"). The Company will keep the Exchange Offer
open for not less than 30 days (or longer if required by applicable law) after
the date notice of the Exchange Offer is mailed to the holders of the Existing
Notes.
For each Existing Note properly tendered and accepted pursuant to the
Exchange Offer and not withdrawn by the holder thereof, the holder of such
Existing Note will receive an Exchange Note having a principal amount equal to
that of the Existing Note tendered. Interest on each Exchange Note will accrue
from the last respective interest date on which interest was paid on the
Existing Note tendered in exchange therefor or, if no interest has been paid on
such Existing Note, from the Issue Date.
Based on existing interpretations of the Securities Act by the staff of the
Commission set forth in several no-action letters to third parties with respect
to similar transactions, including "Exxon Capital Holdings Corporation"
(available May 13, 1988) and "Morgan Stanley & Co. Incorporated" (available June
5, 1991) and similar no-action letters, and subject to the immediately following
sentence, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
the holders thereof (other than holders who are broker-dealers) without further
compliance with the registration and prospectus delivery provisions of the
Securities Act. As the Company has not sought a no-action letter with respect to
the Exchange Offer, there can be no assurance that the Staff of the Commission
would make a similar determination with respect to the Exchange Offer. However,
any holder of Existing Notes who is an "affiliate" of the Company or who intends
to participate in the Exchange Offer for the purpose of distributing the
Exchange Notes, or any Initial Purchasers (i) will not be able to rely on the
interpretation by the staff of the Commission set forth in the above-mentioned
no-action letters, (ii) will not be able to tender its Existing Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Exchange Notes unless such sale or transfer is made pursuant to
an exemption from such requirements.
Each holder of the Existing Notes (other than certain specified holders) who
wishes to exchange Existing Notes for Exchange Notes in the Exchange Offer will
be required to represent in the Letter of Transmittal that among other things
(i) it is not an affiliate of the Company, (ii) any Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii) at
the time of commencement of the Exchange Offer, it has no arrangement with any
person to participate in the distribution (within the meaning of the Securities
Act) of the Exchange Notes. In addition, in connection with any resales of
Exchange Notes, any broker-dealer (an "Exchanging Dealer") who acquired the
Existing Notes for its own account as a result of market-making activities or
other trading activities must deliver a prospectus meeting
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the requirements of the Securities Act. The Commission has taken the position
that Exchanging Dealers may fulfill their prospectus delivery requirements with
respect to the Exchange Notes (other than a resale of an unsold allotment from
the original sale of the Notes) with the prospectus contained in the Exchange
Offer Registration Statement. Under the Registration Agreement, the Company is
required to allow Exchanging Dealers and other persons, if any, subject to
similar prospectus delivery requirements to use the prospectus contained in the
Exchange Offer Registration Statement in connection with the resale of such
Exchange Notes for a period of 180 days (exclusive of any period during which a
stop order shall be in effect suspending the effectiveness of the Registration
Statement) after the consummation of the Exchange Offer.
In the event that any changes in law or applicable interpretations of the
staff of the Commission do not permit the Company to effect the Exchange Offer
with respect to the Notes, or if for any reason the Exchange Offer Registration
Statement is not declared effective within 180 days following the Issue Date, or
upon the request of the Initial Purchasers under certain circumstances, the
Company will, in lieu of effecting the registration of the applicable Exchange
Notes pursuant to the Exchange Offer Registration Statement and at its cost, (i)
as promptly as practicable, file with the Commission a Shelf Registration
Statement (the "Shelf Registration Statement") covering resales of the Existing
Notes, (ii) use its best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act by the 210th day after the Issue
Date (or promptly in the event of a request by the Initial Purchasers) and (iii)
keep effective the Shelf Registration Statement until the earliest of (x) the
second anniversary of the Issue Date (or the first anniversary of the effective
date if such Shelf Registration Statement is filed at the request of the Initial
Purchasers), (y) the time when the Existing Notes registered thereunder can be
sold by non-affiliates pursuant to Rule 144 under the Securities Act without
limitation under clauses (c), (e), (f) and (h) of Rule 144, or (z) such time as
all the Existing Notes registered thereunder have been sold. See "--Resale of
the Exchange Notes." During any consecutive 365-day period, the Company will
have the ability to suspend the availability of the Shelf Registration Statement
for up to two periods of up to 45 consecutive days, but no more than an
aggregate of 60 days during any 365-day period. The Company will, in the event
of the filing of a Shelf Registration Statement, provide to each holder of such
Existing Notes copies of the prospectus which is part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement for
such Existing Notes has become effective and take certain other actions as are
required to permit unrestricted resales of such Existing Notes. A holder of such
Notes that sells such Existing Notes pursuant to the Shelf Registration
Statement generally will be required to be named as a selling security holder in
the related prospectus and to deliver a prospectus to the purchaser, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Agreement which are applicable to such a holder (including certain
indemnification obligations). In addition, each holder of such Existing Notes
will be required to deliver information to be used in connection with the Shelf
Registration Statement and to provide comments on the Shelf Registration
Statement within the time periods set forth in the Registration Agreement in
order to have their Existing Notes included in the Shelf Registration Statement
and to benefit from the provisions regarding Special Interest set forth in the
following paragraph. If the Company has consummated the Exchange Offer, then,
subject to certain limited exceptions, the Company will have no obligation to
file or to maintain the effectiveness of a Shelf Registration Statement with
respect to any Existing Notes that are not tendered in the Exchange Offer.
In the event that (i) by the 150th day following the Issue Date, the
Exchange Offer Registration Statement is not filed with the Commission, (ii) by
the 180th day following the Issue Date, neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offer is not permitted as
described above) the Shelf Registration Statement is filed with the Commission,
or (iii) by the 210th day following the Issue Date, the Exchange Offer is not
consummated or the Shelf Registration Statement is not declared effective with
respect thereto (each such event referred to in clauses (i) through (iii), a
"Registration Default"), interest will accrue on the applicable Existing Notes
(in addition to stated interest on such Notes) which, except as provided below,
shall be the sole and exclusive remedy for such
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Registration Default from and including the next day following each such
Registration Default. In each case such additional interest (the "Special
Interest") will be payable in cash semiannually in arrears each June1 and
December 1, at a rate per annum equal to 0.25% of the principal amount of such
Existing Notes for each such Registration Default. The aggregate amount of
Special Interest payable pursuant to the above provisions will in no event
exceed 0.25% per annum of the principal amount of such Existing Notes which,
except as provided below, shall be the sole and exclusive remedy for such
Registration Default. Upon (a) the filing of the Exchange Offer Registration
Statement after the 150-day period described in clause (i) above, (b) the
effectiveness of the Exchange Offer Registration Statement or the filing of the
Shelf Registration Statement after the 180-day period described in clause (ii)
above or (c) the consummation of the Exchange Offer for such Notes or the
effectiveness of a Shelf Registration Statement, as the case may be, after the
210-day period described in clause (iii) above, the Special Interest payable on
such Notes as a result of the applicable Registration Default will cease to
accrue. For purposes of the preceding sentence, the curing of a Registration
Default by the means described in clause (b) above shall constitute a cure of
the Registration Defaults described in clauses (i) and (ii) above, and the
curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above. The Company will have no other liabilities for monetary
damages with respect to the above; PROVIDED, HOWEVER, that in the event the
Company breaches, fails to comply with or violates certain provisions of the
Registration Agreement, the holders of Existing Notes shall be entitled to, and
the Company shall not oppose the granting of, equitable relief, including
injunction and specific performance.
In the event that a Shelf Registration Statement is declared effective
pursuant to the paragraph preceding the immediately preceding paragraph, if the
Company fails to keep such Registration Statement continuously effective for the
period required by the Registration Agreement (except as specifically permitted
therein), then from such time as the Shelf Registration Statement is no longer
effective until the earlier of (i) the date that the Shelf Registration
Statement is again deemed effective and (ii) the date that is the earliest of
(x) the second anniversary of the Issue Date (or until the first anniversary of
the effective date if the Shelf Registration Statement is filed at the request
of the Initial Purchasers), (y) the time when the Existing Notes registered
thereunder can be sold by non-affiliates pursuant to Rule 144 under the
Securities Act without any limitation under clauses (c), (e), (f) and (h) of
Rule 144, or (z) the date as of which all such Existing Notes are sold pursuant
to the Shelf Registration Statement, Special Interest shall accrue at a rate per
annum equal to 0.25% of the principal amount of the Existing Notes which, except
as provided below, shall be the sole and exclusive remedy for such Registration
Default and shall be payable in cash semiannually in arrears each June 1 and
December 1. The Company will have no other liabilities for monetary damages with
respect to the above; PROVIDED, HOWEVER, that in the event the Company breaches,
fails to comply with or violates certain provisions of the Registration
Agreement, the holders of Existing Notes shall be entitled to, and the Company
shall not oppose the granting of, equitable relief, including injunction and
specific performance.
The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is available upon request to the Company.
Following the consummation of the Exchange Offer, holders of the Existing
Notes who were eligible to participate in the Exchange Offer but who did not
tender their Existing Notes will not have any further exchange or registration
rights and such Existing Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for such
Existing Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Existing
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount
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of Exchange Notes in exchange for each $1,000 principal amount of outstanding
Existing Notes accepted in the Exchange Offer. Holders may tender some or all of
their Existing Notes pursuant to the Exchange Offer. However, Existing Notes may
be tendered only in integral multiples of $1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Existing Notes except (i) the Exchange Notes bear a different CUSIP
Number from the Existing Notes and (ii) the Exchange Notes have been registered
under the Securities Act and hence will not bear legends restricting the
transfer thereof. The Exchange Notes will evidence the same debt as the Existing
Notes and will be entitled to the benefits of the Indenture.
As of the date of this Prospectus, $200,000,000 aggregate principal amount
of Existing Notes are outstanding. The Company has fixed the close of business
on , 1998 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of the Existing Notes do not have any appraisal or dissenters'
rights under the General Corporation Act of Oklahoma or the Indenture in
connection with the Exchange Offer. The Company intends to conduct the Exchange
Offer in accordance with the applicable requirements of the Exchange Act and the
rules and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Existing Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Notes from the Company.
If any tendered Existing Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Existing Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Existing Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions of the
Letter of Transmittal, transfer taxes with respect to the exchange of Existing
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than the transfer taxes in certain circumstances, in connection
with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998 unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders an announcement thereof, each prior to 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date.
The Company reserves the right (i) to delay accepting any Existing Notes, to
extend the Exchange Offer or to terminate the Exchange Offer if any of the
conditions set forth below under "--Conditions" shall not have been satisfied,
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders.
PROCEDURES FOR TENDERING
The tender of Existing Notes pursuant to any of the procedures set forth in
this Prospectus and in the Letter of Transmittal will constitute a binding
agreement between the Tendering Holder and the Company
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in accordance with the terms and subject to the conditions set forth herein and
in the Letter of Transmittal. The tender of Existing Notes will constitute an
agreement to deliver good and marketable title to all tendered Existing Notes
prior to the Expiration Date free and clear of all liens, charges, claims,
encumbrances, interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "--GUARANTEED DELIVERY PROCEDURES," UNLESS THE
EXISTING NOTES BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL), THE COMPANY MAY, AT ITS OPTION, REJECT SUCH
TENDER. ISSUANCE OF EXCHANGE NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED
EXISTING NOTES AND DELIVERY OF ALL OTHER REQUIRED DOCUMENTS. NOTWITHSTANDING THE
FOREGOING, DTC PARTICIPANTS TENDERING THROUGH ATOP WILL BE DEEMED TO HAVE MADE
VALID DELIVERY WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (DEFINED
BELOW) PRIOR TO THE EXPIRATION DATE.
Accordingly, to properly tender Existing Notes, the following procedures
must be followed:
EXISTING NOTES HELD THROUGH DTC. Each Beneficial Owner holding Existing
Notes through a DTC Participant must instruct such DTC Participant to cause its
Existing Notes to be tendered in accordance with the procedures set forth in
this Prospectus.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant holding Existing Notes through DTC must (i) electronically transmit
its acceptance through ATOP, and DTC will then edit and verify the acceptance,
execute a book-entry delivery to the Exchange Agent's account at DTC
and send an Agent's Message to the Exchange Agent for its acceptance, or (ii)
comply with the guaranteed delivery procedures set forth below and in the Notice
of Guaranteed Delivery. See "--Guaranteed Delivery Procedures."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to
Existing Notes held through DTC, and any financial institution that is a DTC
Participant may make book-entry delivery of interests in Existing Notes into the
Exchange Agent's account through ATOP. However, although delivery of interests
in the Existing Notes may be effected through book-entry transfer into the
Exchange Agent's account through ATOP, an Agent's Message in connection with
such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the Exchange Agent at its address set forth
under "--Exchange Agent," or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the Expiration Date. Delivery of
documents to DTC does not constitute delivery to the Exchange Agent. The
confirmation of a book-entry transfer into the Exchange Agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
each DTC Participant tendering through ATOP that such DTC Participants have
received a Letter of Transmittal and agree to be bound by the terms of the
Letter of Transmittal and that the Company may enforce such agreement against
such DTC Participants.
Cede & Co., as the Holder of the global certificates representing the
Existing Notes (each a "Global Security," or together, the "Global Securities"),
will tender a portion of each of the Global Securities equal to the aggregate
principal amount due at the stated maturity for which instructions to tender are
given by DTC Participants.
EXISTING NOTES HELD BY HOLDERS. Each Holder must (i) complete and sign and
mail or deliver the accompanying Letter of Transmittal, and any other documents
required by the Letter of Transmittal, together with certificate(s) representing
all tendered Existing Notes, to the Exchange Agent at its address set forth
under "--Exchange Agent," or (ii) comply with the guaranteed delivery procedures
set forth below and in the Notice of Guaranteed Delivery. See "--Guaranteed
Delivery Procedures."
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All signatures on a Letter of Transmittal must be guaranteed by any member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor" institution
within the meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution"); PROVIDED, HOWEVER, that signatures on a Letter of Transmittal
need not be guaranteed if such Existing Notes are tendered for the account of an
Eligible Institution, including (as such terms are defined in Rule 17Ad-15): (i)
a bank; (ii) a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings institution that is a
participant in a Securities Transfer Association recognized program.
If a Letter of Transmittal or any Existing Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
Holders should indicate in the applicable box in the Letter of Transmittal
the name and address to which substitute certificates evidencing Existing Notes
for amounts not tendered are to be issued or sent, if different from the name
and address of the person signing the Letter of Transmittal. In the case of
issuance in a different name, the employer identification or social security
number of the person named must also be indicated. If no instructions are given,
such Existing Notes not tendered, as the case may be, will be returned to the
person signing the Letter of Transmittal.
By tendering, each Holder and each DTC Participant will make to the Company
the representations set forth in the fourth paragraph under the heading
"--Purpose and Effect of the Exchange Offer."
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, as the case may be, each Tendering Holder waives any
right to receive any notice of the acceptance for purchase of its Existing
Notes.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Existing Notes will be resolved by the
Company, whose determination will be final and binding. The Company reserves the
absolute right to reject any or all tenders that are not in proper form or the
acceptance of which may, in the opinion of counsel for the Company, be unlawful.
The Company also reserves the absolute right to waive any condition to the
Exchange Offer and any irregularities or conditions of tender as to particular
Existing Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding. Unless waived, any irregularities in connection with tenders
must be cured within such time as the Company shall determine. The Company and
the Exchange Agent shall not be under any duty to give notification of defects
in such tenders and shall not incur liabilities for failure to give such
notification. Tenders of Existing Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Existing Notes received
by the Exchange Agent that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holder, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND EXISTING NOTES MUST BE SENT ONLY TO THE EXCHANGE
AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR EXISTING NOTES TO THE COMPANY OR
DTC.
The method of delivery of Existing Notes and Letters of Transmittal, any
required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or Letters of
Transmittal and, except as otherwise provided in the applicable Letter of
Transmittal, delivery will be deemed made
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only when actually received by the Exchange Agent. If delivery is by mail, it is
suggested that the Holder use properly insured, registered mail with return
receipt requested, and that the mailing be made sufficiently in advance of the
Expiration Date to permit delivery to the Exchange Agent prior to the Expiration
Date.
GUARANTEED DELIVERY PROCEDURES
EXISTING NOTES HELD THROUGH DTC. DTC Participants holding Existing Notes
through DTC (the "Book-Entry Transfer Facility") who wish to cause their
Existing Notes to be tendered, but who cannot transmit their acceptances through
ATOP prior to the Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided by the Company herewith; and
(c) Book-Entry Confirmation and an Agent's Message in connection
therewith (as described above) are received by the Exchange Agent within
three New York Stock Exchange trading days after the date of the execution
of the Notice of Guaranteed Delivery.
EXISTING NOTES HELD BY HOLDERS. Holders who wish to tender their Existing
Notes and (i) whose Existing Notes are not immediately available, (ii) who
cannot deliver their Existing Notes, the Letter of Transmittal or any other
required documents to the Exchange Agent or (iii) who cannot complete the
procedures for book-entry transfer, prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the holder, the
certificate number(s) of such Existing Notes and the principal amount of
Existing Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days after
the Expiration Date, the Letter of Transmittal (or facsimile thereof)
together with the certificate(s) representing the Existing Notes (or a
confirmation of book-entry transfer of such Existing Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility), and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Existing Notes in proper form for transfer (or a confirmation or book-entry
transfer of such Existing Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility), and all other documents required by the
Letter of Transmittal are received by the Exchange Agent upon three New York
Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Existing Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Existing Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
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EXISTING NOTES HELD THROUGH DTC. DTC Participants holding Existing Notes
who have transmitted their acceptances through ATOP may, prior to 5:00 p.m., New
York City time, on the Expiration Date, withdraw the instruction given thereby
by delivering to the Exchange Agent, at its address set forth under "--Exchange
Agent," a written, telegraphic or facsimile notice of withdrawal of such
instruction. Such notice of withdrawal must contain the name and number of the
DTC Participant, the principal amount due at the stated maturity of the Existing
Notes to which such withdrawal relates and the signature of the DTC Participant.
Withdrawal of such an instruction will be effective upon receipt of such written
notice of withdrawal by the Exchange Agent.
EXISTING NOTES HELD BY HOLDERS. Holders may withdraw a tender of Existing
Notes in the Exchange Offer, by a telegram, telex, letter or facsimile
transmission notice of withdrawal received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date.
Any such notice of withdrawal must (i) specify the name of the person having
deposited the Existing Notes to be withdrawn (the "Depositor"), (ii) identify
the Existing Notes to be withdrawn (including the certificate number(s) and
principal amount due at the stated maturity of such Existing Notes, or, in the
case of Existing Notes transferred by book-entry transfer, the name and number
of the account at the Book-Entry Transfer Facility to be credited), (iii) be
signed by the holder in the same manner as the original signature on the Letter
of Transmittal by which such Existing Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Existing Notes register the
transfer of such Existing Notes into the name of the person withdrawing the
tender and (iv) specify the name in which any such Existing Notes are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Existing Notes so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer, and no Exchange Notes will
be issued with respect thereto unless the Existing Notes so withdrawn are
validly re-tendered. Any Existing Notes which have been tendered but which are
not accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Existing Notes may be
re-tendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
All signatures on a notice of withdrawal must be guaranteed by an Eligible
Institution; PROVIDED, HOWEVER, that signatures on the notice of withdrawal need
not be guaranteed if the Existing Notes being withdrawn are held for the account
of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC Participant or a Holder, as the case may be, in the same manner as the
person's name appears on its transmission through ATOP or Letter of Transmittal,
as the case may be, to which such withdrawal relates. If a notice of withdrawal
is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the revocation appropriate evidence of authority to execute
the notice of withdrawal. A DTC Participant or a Holder may withdraw an
instruction or a tender, as the case may be, only if such withdrawal complies
with the provisions of this Prospectus.
A withdrawal of a tender of Existing Notes by a DTC Participant or a Holder,
as the case may be, may be rescinded only by a new transmission of an acceptance
through ATOP or execution and delivery of a new Letter of Transmittal, as the
case may be, in accordance with the procedures described herein.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, and subject to its
obligations pursuant to the Registration Agreement, the Company shall not be
required to accept for exchange, or exchange securities
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for, any Existing Notes, and may terminate or amend the Exchange Offer as
provided herein before the acceptance of such Existing Notes, if:
(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the judgment of the Company upon written advice of counsel, could
reasonably be expected to materially impair the ability of the Company to
proceed with the Exchange Offer or any material adverse development has
occurred in any existing action or proceeding with respect to the Company or
any of the subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the staff of
the Commission is proposed, adopted or enacted, which, in the judgment of
the Company and based on written advice of counsel, could reasonably be
expected to materially impair the ability of the Company to proceed with the
Exchange Offer or materially impair the contemplated benefits of the
Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval the
Company shall, in its discretion and based on written advice of counsel,
deem necessary for the consummation of the Exchange Offer as contemplated
hereby.
If any of the conditions are not satisfied, the Company may (i) refuse to
accept any Existing Notes and return all tendered Existing Notes to the
tendering holders, (ii) extend the Exchange Offer and retain all Existing Notes
tendered prior to the expiration of the Exchange Offer, subject, however, to the
rights of holders to withdraw such Existing Notes (see "--Withdrawal of
Tenders"), or (iii) waive such unsatisfied conditions with respect to the
Exchange Offer and accept all properly tendered Existing Notes which have not
been withdrawn.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in whole or in part at any time and from time to time
upon advice of outside counsel. The failure by the Company at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
In addition, the Company will not accept for exchange any Existing Notes
tendered and no Exchange Notes will be issued in exchange for any such Existing
Notes, if at such time any stop order is threatened by the Commission or in
effect with respect to the Registration Statement of which this Prospectus is a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended.
The Exchange Offer is not conditioned on any minimum principal amount of
Existing Notes being tendered for exchange.
EXCHANGE AGENT
LaSalle National Bank has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent, addressed as
follows:
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Diane Swanson
Telephone: (312) 904-2936
Facsimile: (312) 904-2236
Delivery to an address other than as set forth above, or transmission of
instructions via a facsimile number other than the one set forth above, will not
constitute a valid delivery.
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FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Existing Notes, which is face value, as reflected in the Company's accounting
records on the date of exchange. Accordingly, no gain or loss for accounting
purposes will be recognized by the Company. The expenses of the Exchange Offer
will be amortized over the term of the Exchange Notes under generally accepted
accounting principles.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Existing Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Existing
Notes may be resold only (i) to the Company, (ii) so long as such Existing Notes
are eligible for resale pursuant to Rule 144A, to a person whom the seller
reasonably believes is a "qualified institutional buyer," as defined in Rule
144A under the Securities Act (a "QIB"), that purchases for its own account or
for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iii) outside the United States
in accordance with Regulation S, (iv) to an institution that is an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
(an "Institutional Accredited Investor") who has certified to the Company and
the Trustee for the Existing Notes that such transferee is an Institutional
Accredited Investor and is acquiring such Notes for investment purposes and not
for distribution, (iv) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities Act or
(v) pursuant to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any state of the
United States.
RESALE OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that a holder or other person who receives Exchange Notes
in the ordinary course of business, whether or not such person is the holder
(other than (i) a broker-dealer who purchases such Exchange Notes from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) who receives Exchange Notes in
exchange for Existing Notes, and who is not participating, does not intend to
participate, and has no arrangement or understanding with any person to
participate, in the distribution of the Exchange Notes, will be allowed to
resell the Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes a
prospectus that satisfies the requirements of Section 10 of the Securities Act.
However, if any holder acquires Exchange Notes in the Exchange Offer for the
purpose of distributing or participating in a distribution of the Exchange
Notes, such holder cannot rely on the position of the staff of the Commission
enunciated in such
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no-action letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Further, each broker-dealer that receives Exchange Notes
for its own account in exchange for Existing Notes, where such Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
As contemplated by these no-action letters and the Registration Agreement,
each holder accepting the Exchange Offer is required to represent to the Company
in the Letter of Transmittal that (i) the Exchange Notes are to be acquired by
the holder or the person receiving such Exchange Notes, whether or not such
person is the holder, in the ordinary course of business, (ii) the holder or any
such other person (other than a broker-dealer referred to in the next sentence)
is not engaging, and does not intend to engage, in the distribution of the
Exchange Notes, (iii) the holder or any such other person has no arrangement or
understanding with any person to participate in the distribution of the Exchange
Notes, (iv) neither the holder nor any such other person is an "affiliate" of
the Company within the meaning of Rule 405 under the Securities Act, and (v) the
holder or any such other person acknowledges that if such holder or other person
participates in the Exchange Offer for the purpose of distributing the Exchange
Notes, it must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale of the Exchange Notes and
cannot rely on those no-action letters. As indicated above, each broker-dealer
that receives any Exchange Notes for its own account in exchange for Existing
Notes must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. For a description of the procedures for such
resales by broker-dealers, see "Plan of Distribution."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal U.S. federal income tax
consequences (and, to a limited extent, U.S. federal estate tax consequences)
resulting from (i) the exchange of Existing Notes for Exchange Notes and (ii)
the beneficial ownership of Notes by certain persons. This summary does not
purport to consider all the possible U.S. federal income tax consequences that
may affect a particular Tendering Holder in light of such Tendering Holder's
individual investment circumstances and is not intended to reflect the
particular tax position of any Tendering Holder. It deals only with Notes held
as capital assets. Moreover, except as expressly indicated, it does not address
Tendering Holders that may be subject to special tax rules, such as banks,
insurance companies, dealers in securities or currencies, purchasers that hold
Notes as a hedge against currency risks or as part of a straddle with other
investments or as part of "synthetic security" or other integrated investment
(including a "conversion transaction") comprised of a Note and one or more other
investments, or purchasers that have a "functional currency" other than the U.S.
dollar. Except to the extent discussed below under "Non-U.S. Holders," this
summary is not applicable to non-U.S. persons not subject to U.S. federal income
tax on their worldwide income. This summary is based upon the U.S. federal tax
laws and regulations as now in effect and as currently interpreted and does not
take into account possible changes in such tax laws or such interpretations, any
of which may be applied retroactively. It does not address any description of
gift, estate (except to a limited extent), state, local or foreign taxation that
may be applicable to the Notes or holders thereof. Tendering Holders should
consult their own tax advisors concerning the application of the U.S. federal
tax laws to their participation in the Exchange Offer and the ownership and
disposition of Notes as well as any consequences to them under the laws of any
other taxing jurisdiction.
U.S. HOLDERS
The following discussion is limited to certain material U.S. federal income
tax consequences relevant to a holder of a Note that is (i) an individual who is
a citizen or resident of the U.S., (ii) a corporation or other entity taxable as
a corporation created or organized under the laws of the U.S. or any state
thereof (including the District of Columbia), (iii) an estate, the income of
which is subject to U.S. federal income
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tax regardless of its source, (iv) a trust if the primary supervision over the
administration of such trust can be exercised by a U.S. court and one or more
U.S. persons have the authority to control all substantial decisions of such
trust or (v) a person otherwise subject to U.S. federal income taxation on its
worldwide income (a "U.S. Holder"). Certain material U.S. federal income tax
consequences relevant to a holder other than a U.S. Holder are discussed
separately below.
EXCHANGE OFFER. The exchange of Existing Notes for Exchange Notes will not
be treated as an "exchange" for U.S. federal income tax purposes to U.S. Holders
because the Exchange Notes will not be considered to differ materially in kind
or extent from the Existing Notes. As a result, there will be no U.S. federal
income tax consequences to Tendering Holders pursuant to the Exchange Offer. A
U.S. Holder should have the same adjusted basis and holding period in the
Exchange Note as it had in the Existing Note immediately before the exchange.
PAYMENTS OF INTEREST. In general, interest paid on the Notes will be
taxable to a U.S. Holder as ordinary income at the time it is received or
accrued, depending on the Holder's usual method of accounting for U.S. federal
income tax purposes.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES. Upon the disposition of a Note
by sale, exchange or redemption (including pursuant to an offer by the Company),
a U.S. Holder will generally recognize gain or loss equal to the difference
between (i) the amount of cash plus the fair market value of any property
received upon such sale, exchange or redemption (other than amounts attributable
to accrued interest not yet taken into income) and (ii) the U.S. Holder's
adjusted tax basis in the Note. Generally, a U.S. Holder's adjusted tax basis in
a Note will equal the cost of the Note to the U.S. Holder increased by any
market discount included in income and reduced by any bond premium amortized by
the U.S. Holder.
Assuming the Note is held as a capital asset, such gain or loss (except to
the extent that the market discount rules otherwise provide) will generally
constitute capital gain or loss, which will be either long-term or short-term if
the U.S. Holder is a corporation; or long-term, mid-term or short-term if the
U.S. Holder is a non-corporate entity, depending on the U.S. Holder's holding
period.
NON-U.S. HOLDERS
Under present U.S. federal income and estate tax law and subject to the
discussion of backup withholding below:
(a) payments of principal and interest on the Notes by the Company or
any agent of the Company to any Holder that is not a U.S. Holder or
partnership created or organized under the laws of the U.S. or any state
thereof including the District of Columbia (a "Non-U.S. Holder") will not be
subject to U.S. federal income and withholding tax if the following
requirements of the "portfolio interest" exception are satisfied: (i) the
Non-U.S. Holder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation
that is related to the Company (directly or indirectly) through stock
ownership and (iii) either (A) the beneficial owner of the Notes certifies
to the Company or its agent, under penalties of perjury, that he is not a
"United States person" (as defined by the Code) and provides his name and
address, or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "financial institution") and holds the Notes on behalf
of its beneficial owner certifies to the Company or its agent under
penalties of perjury that such statement has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof;
(b) except as otherwise provided below, a Non-U.S. Holder will not be
subject to U.S. federal income and withholding tax on gain realized on the
sale, exchange or redemption of a Note provided
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that, in the case of any gain representing accrued interest, the conditions
described in (a) above are satisfied; and
(c) a Note held by an individual who at the time of death is not a
citizen or resident of the U.S. will not be subject to U.S. federal estate
tax as a result of such individual's death if, at the time of such death,
the individual did not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote and the income on the Notes or Exchange Notes would not have been
effectively connected with the conduct of a trade or business by the
individual in the U.S.
If a Non-U.S. Holder is engaged in a trade or business in the U.S. and
interest on the Note is effectively connected with the conduct of such trade or
business, the Non-U.S. Holder, although exempt from the withholding tax
discussed in the preceding paragraph (provided that such holder properly claims
such exemption), may be subject to U.S. federal income tax on such interest in
the same manner as if it were a U.S. Holder. In addition, if such Non-U.S.
Holder is a foreign corporation, it may be subject to a branch profits tax equal
to 30% of its effectively connected earnings and profits for the taxable year,
subject to adjustments. For this purpose, interest on the Note will be included
in such foreign corporation's effectively connected earnings and profits.
Any gain realized by the Non-U.S. Holder upon the sale, exchange or
retirement of a Note generally will not be subject to U.S. federal income tax
unless (i) such gain or income is effectively connected with a trade or business
conducted by the Non-U.S. Holder in the U.S., (ii) in the case of a Non-U.S.
Holder who is an individual, such individual is present in the U.S. for 183 days
or more in the taxable year of such sale, exchange or retirement, and certain
other conditions are met, or (iii) the Non-U.S. Holder is subject to tax
pursuant to the provisions of the Code applicable to certain U.S. expatriates.
If a Non-U.S. Holder cannot satisfy the requirements of the "portfolio
interest" exception described in relevant part above, payments of interest to
the Non-U.S. Holder will be subject to U.S. federal income and withholding tax
at a rate of 30% unless the beneficial owner of the Note provides the Company or
its agent with a properly executed (i) Internal Revenue Service Form 1001 (or
successor form) claiming an exemption from withholding under the benefit of a
tax treaty, or (ii) Internal Revenue Service Form 4224 (or successor form)
stating that the interest paid on the Note is not subject to U.S. federal income
and withholding tax because such interest income is effectively connected with
the beneficial owner's conduct of a trade or business in the U.S.
Recently adopted Treasury Regulations not yet in effect (the "Final
Regulations"), would alter the foregoing rules in certain respects. In general,
the Final Regulations are generally effective for payments made after December
31, 1998. Under the Final Regulations, a Non-U.S. Holder seeking an exemption
under (i) or (ii) of the preceding paragraph would generally be required to
provide a beneficial owner certificate on Form W-8, which form may include,
among other things, the Non-U.S. Holder's taxpayer identification number. The
Final Regulations also provide special rules to determine whether, for purposes
of determining the applicability of a tax treaty, interest paid to a Non-U.S.
Holder that is an entity should be treated as paid to the entity or those
holding an interest in the entity. The foregoing is not intended to be a
complete discussion of the provisions of the Final Regulations, and Non-U.S.
Holders are urged to consult their advisors with respect to the effect that the
Final Regulations will have when they become effective.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under the Code, a U.S. Holder of a Note may be subject, under certain
circumstances, to information reporting and/or backup withholding at a 31% rate
with respect to payments of interest or the gross proceeds from the sale,
exchange or redemption of a Note. This withholding applies only if a U.S. Holder
(i) fails to furnish its social security or other taxpayer identification number
("TIN") within a reasonable time after a request therefor, (ii) furnishes an
incorrect TIN, (iii) fails to report interest or dividends
51
<PAGE>
properly, or (iv) fails, under certain circumstances, to provide a certified
statement, signed under penalty or perjury, that the TIN provided is its correct
number and that it is not subject to backup withholding. Any amount withheld
from a payment to a U.S. Holder under the backup withholding rules is allowable
as a credit (and may entitle such holder to a refund) against such holder's U.S.
federal income tax liability, provided that the required information is
furnished to the IRS. Certain persons are exempt from backup withholding,
including corporations, tax-exempt organizations, qualified pension and profit
sharing trusts and individual retirement accounts. U.S. Holders of Notes should
consult their tax advisors as to their qualification for exemption from
withholding and the procedure for obtaining such exemption.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-U.S. Holder of a Note if such holder has
provided the required certification that it is not a United States person as set
forth in clause (iii) in the first paragraph under "Non-U.S. Holders," or has
otherwise established an exemption (provided that neither the Company nor its
agent has actual knowledge that the holder is a United States person or that the
conditions of any exemption are not in fact satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker generally will not be subject to information reporting or
backup withholding, except that information reporting may apply to such payments
if the broker is a (i) United States person, (ii) a controlled foreign
corporation for U.S. tax purposes or (iii) a foreign person 50% or more of whose
gross income from all sources for the three-year period ending with the close if
its taxable year preceding the payment was effectively connected with a U.S.
trade or business. Payment of the proceeds from a sale of a Note to or through
the U.S. office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to its taxpayer
identification number or otherwise establishes an exemption from information
reporting and backup withholding.
The Final Regulations may change the procedures for exemption from backup
withholding. These regulations are generally effective for payments made after
December 31, 1998, subject to certain transition rules. Non-U.S. Holders should
consult their own tax advisors with respect to the impact, it any, of the Final
Regulations.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Existing
Notes, where such Exchange Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days (exclusive of any period during which any stop order shall be
in effect suspending the effectiveness of the Registration Statement) after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until , 1998 all dealers effecting transactions in the
Exchange Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the Exchange Notes, or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commission or concessions from any such
broker-dealer and/ or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
52
<PAGE>
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date (exclusive of any period
during which any stop order shall be in effect suspending the effectiveness of
the Registration Statement), the Company will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents pursuant to a Letter of Transmittal.
The Company has agreed to pay all expenses incident to the Exchange Offer
(including the expenses of one counsel for certain holders of the Existing
Notes) other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Existing Notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Exchange Notes offered hereby
will be passed upon for the Company by Crowe & Dunlevy, A Professional
Corporation, Oklahoma City, Oklahoma.
EXPERTS
The consolidated financial statements and related financial statement
schedule of the Company incorporated herein by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, as amended,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated herein by reference. Such consolidated
financial statements and financial statement schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
The audited consolidated financial statements of American incorporated
herein by reference from American's Annual Report on Form 10-K for the year
ended December 31, 1996, to the extent and for the periods indicated in their
report, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing and in giving said report. Reference is made
to said report, which includes an explanatory paragraph with respect to the
change in the method of accounting for impairments of proved oil and gas
properties in 1994 as discussed in Note 1 to the audited consolidated financial
statements.
Certain estimates of oil and gas reserves of the Company and related
information as of December 31, 1996 included in this Prospectus or incorporated
by reference herein have been reviewed by Ryder Scott Company, independent
petroleum engineers, as set forth in their report with respect thereto and all
such information has been so included and incorporated in reliance upon the
authority of such firm as experts regarding the matters addressed in their
report.
Certain estimates of oil and gas reserves of American and related
information as of December 31, 1996 incorporated by reference herein have been
prepared by Netherland, Sewell & Associates, Inc. and William M. Cobb &
Associates, Inc., each independent petroleum engineers, as set forth in their
respective reports with respect thereto, and all such information has been so
incorporated in reliance upon the authority of such firms as experts regarding
the matters addressed in their respective reports.
53
<PAGE>
GLOSSARY OF CERTAIN OIL AND GAS INDUSTRY TERMS
The definitions set forth below shall apply to the indicated terms as used
in this Offering Memorandum. All volumes of natural gas referred to herein are
stated at the legal pressure base of the state or area where the reserves exist
and at 60 degrees Fahrenheit and in most instances are rounded to the nearest
major multiple.
BBL. One stock tank barrel, or 42 U.S. gallons liquid volume, used herein
in reference to crude oil or other liquid hydrocarbons.
BCF. One billion cubic feet of natural gas.
BCFE. One billion cubic feet of natural gas equivalent, determined using
the ratio of one Bbl of crude oil or condensate to six Mcf of natural gas.
BTU. British thermal unit, which is the heat required to raise the
temperature of a one pound mass of water from 58.5 to 59.5 degrees Fahrenheit.
BBTU. One billion Btus.
DEVELOPED ACREAGE. The number of acres which are allocated or assignable to
producing wells or wells capable of production.
DEVELOPMENT WELL. A well drilled within the proved area of an oil or gas
reservoir to the depth of a stratigraphic horizon known to be productive in an
attempt to recover proved undeveloped reserves.
DRY HOLE OR WELL. A well found to be incapable of producing hydrocarbons in
sufficient quantities to justify completion as an oil or gas well.
ESTIMATED FUTURE NET REVENUES. Revenues from production of oil and gas, net
of all production-related taxes, lease operating expenses and capital costs.
EXPLORATORY WELL. A well drilled to find and produce oil or gas in an
unproved area, to find a new reservoir in a field previously found to be
productive of oil or gas in another reservoir, or to extend a known reservoir.
FINDING COST. Total costs incurred to acquire, explore and develop oil and
gas properties divided by the increase in proved reserves through acquisition of
proved properties, extensions and discoveries, improved recoveries and revisions
of previous estimates.
GROSS ACRE. An acre in which a working interest is owned.
GROSS WELL. A well in which a working interest is owned.
LEASE OPERATING EXPENSE. All direct costs associated with and necessary to
operate a producing property.
MBBL. One thousand barrels of crude oil or other liquid hydrocarbons.
MBTU. One thousand Btus.
MCF. One thousand cubic feet of natural gas.
MCFE. One thousand cubic feet of natural gas equivalent, determined using
the ratio of one Bbl of oil or condensate to six Mcf of natural gas.
MMBBL. One million barrels of crude oil or other liquid hydrocarbons.
54
<PAGE>
MMBTU. One million Btus.
MMCF. One million cubic feet of natural gas.
MMCFE. One million cubic feet of natural gas equivalent, determined using
the ratio of one Bbl of oil or condensate to six Mcf of natural gas.
NET ACRES OR NET WELLS. The sum of the fractional working interests owned
in gross acres or gross wells, as the case may be.
PRESENT VALUE. When used with respect to oil and gas reserves, the
estimated future gross revenue to be generated from the production of proved
reserves, net of estimated production and future development costs, using prices
and costs in effect as of the date of the report or estimate, without giving
effect to non-property related expenses such as general and administrative
expenses, debt service and future income tax expense or to depreciation,
depletion and amortization, discounted using an annual discount rate of 10%. The
prices used to estimate future revenues of the Company include the effects of
Fixed-Price Contracts except where otherwise specifically noted. Estimated
quantities of proved reserves are determined without regard to such contracts.
PRODUCTIVE WELL. A well that is producing or that is capable of producing
oil or gas.
PROVED DEVELOPED RESERVES. Proved reserves that are expected to be
recovered through existing wells with existing equipment and operating methods.
PROVED RESERVES. The estimated quantities of oil, natural gas and natural
gas liquids that geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under existing
economic and operating conditions.
PROVED UNDEVELOPED RESERVES. Proved reserves that are expected to be
recovered from new wells on undrilled acreage, or from existing wells where a
relatively major expenditure is required for recompletion.
RESERVE LIFE INDEX. A measure of how long it will take to produce a
quantity of reserves, calculated by dividing estimated reserves by production
for the twelve months immediately preceding the date of determination (in
natural gas equivalents).
RESERVE REPLACEMENT RATIO. A percentage determined by dividing the
estimated proved reserves added during a year from exploration and development
activities, acquisitions of proved reserves and revisions of previous estimates
by the oil and gas volumes produced during that year.
TBTU. One trillion Btus.
TCFE. One trillion cubic feet of gas equivalent, determined using the ratio
of one Bbl of oil or condensate to six Mcf of natural gas.
UNDEVELOPED ACREAGE. Lease acreage on which wells have not been drilled or
completed to a point that would permit the production of commercial quantities
of oil and natural gas regardless of whether such acreage contains proved
reserves.
WORKING INTEREST. The operating interest which gives the owner the right to
drill, produce and conduct operating activities on the property and a share of
production.
55
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE INITIAL PURCHASERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
Important Information Concerning Exchange Notes........................... 4
Forward-Looking Statements................................................ 5
Summary................................................................... 6
Selected Historical and Pro Forma Financial Data.......................... 14
Selected Historical and Pro Forma Operating Data.......................... 16
Selected Historical and Pro Forma Reserves Data........................... 17
Use of Proceeds........................................................... 18
Capitalization............................................................ 19
The Company............................................................... 20
Description of Notes...................................................... 26
The Exchange Offer........................................................ 39
Certain Federal Income Tax Consequences................................... 49
Plan of Distribution...................................................... 52
Legal Matters............................................................. 53
Experts................................................................... 53
Glossary of Certain Oil and Gas Industry Terms............................ 54
</TABLE>
------------------------
UNTIL , 1998 ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
$200,000,000
LOUIS DREYFUS NATURAL
GAS CORP.
OFFER TO EXCHANGE
6 7/8% SENIOR NOTES DUE 2007
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT
FOR
6 7/8% SENIOR NOTES DUE 2007
WHICH HAVE NOT BEEN SO
REGISTERED
---------------------
PROSPECTUS
---------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1006(B)(7) of the Oklahoma General Corporation Act permits an
Oklahoma corporation to include a provision in its Certificate of Incorporation
limiting a director's liability to the corporation or its stockholders for
monetary damages for breaches of fiduciary duty as a director.
The Registrant's Certificate of Incorporation provides that, pursuant to
Oklahoma law, its directors shall not be liable for monetary damages for breach
of the directors' fiduciary duty of care to the Registrant and its stockholders.
The provision in the Certificate of Incorporation does not eliminate the duty of
care and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Oklahoma law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant, as well as for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Oklahoma law. The provision also does not
affect a director's responsibilities under any other law, such as the state or
federal securities laws.
Under Section 1031 of the Oklahoma General Corporation Act, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").
The Registrant's Certificate of Incorporation provides that the Registrant
shall indemnify its directors and officers to the fullest extent permitted by
Oklahoma law. The Certificate of Incorporation requires the Registrant to
indemnify such persons against expenses, judgments, fines, settlements and other
amounts incurred in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was a director or an officer of the Registrant or any of
its affiliated enterprises, provided such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful. However, in the case of
a derivative action, an officer or director will not be entitled to
indemnification in respect of any claim, issue or matter as to which such person
is adjudged to be liable to the Registrant, unless and only to the extent that
the court in which the action was brought determines that such person is fairly
and reasonably entitled to indemnity for expenses.
The Registrant has entered into Indemnification Agreements with each
director of the Registrant which require the Registrant to indemnify such
persons against certain liabilities and expenses incurred by any such persons by
reason of their status or service as directors of the Registrant. The
Indemnification Agreements also set forth procedures that will apply in the
event of a claim for indemnification under such agreements. In addition, the
Indemnification Agreements require that the Registrant use commercially
reasonable efforts to maintain policies of directors' liability insurance.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------------------------------
<C> <S>
4.1 Indenture between the Registrant and LaSalle National Bank, as Trustee, dated as of December 11, 1997.
4.2 Purchase Agreement, dated as of December 4, 1997, between the Registrant and Salomon Brothers Inc.,
individually and as representative of the Initial Purchasers.
4.3 Registration Agreement, dated as of December 11, 1997, between the Registrant and Salomon Brothers Inc.,
individually and as representative of the Initial Purchasers.
4.4 Form of Exchange Note 6 7/8% Senior Notes due 2007 (included in Exhibit 4.1).
5.1 Opinion of Crowe & Dunlevy, A Professional Corporation, regarding the legality of the Exchange Notes
being registered.
12.1 Statement re Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Ryder Scott Company.
23.4 Consent of Netherland, Sewell & Associates, Inc.
23.5 Consent of William M. Cobb & Associates, Inc.
23.6 Consent of Crowe & Dunlevy, A Professional Corporation (included in Exhibit 5.1).
24.1 Powers of Attorney.
25.1 Form T-1, Statement of Eligibility Under the Trust Indenture Act of 1939, as amended, of LaSalle National
Bank, as Trustee under the Indenture.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11, or 13 herein, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement on Form S-4 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma, on February 6, 1998.
<TABLE>
<S> <C> <C>
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ JEFFREY A. BONNEY
-----------------------------------------
Jeffrey A. Bonney
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
President, Chief Executive
MARK E. MONROE* Officer and Director
- ------------------------------ (principal executive February 6, 1998
Mark E. Monroe officer)
RICHARD E. BROSS*
- ------------------------------ Executive Vice President February 6, 1998
Richard E. Bross and Director
Executive Vice President
/s/ JEFFREY A. BONNEY and Chief Financial
- ------------------------------ Officer (principal February 6, 1998
Jeffrey A. Bonney financial and accounting
officer)
SIMON B. RICH, JR.*
- ------------------------------ Chairman of the Board of February 6, 1998
Simon B. Rich, Jr. Directors
MARK ANDREWS*
- ------------------------------ Vice Chairman of the Board February 6, 1998
Mark Andrews of Directors
DANIEL R. FINN, JR.*
- ------------------------------ Director February 6, 1998
Daniel R. Finn
JOHN J. HOGAN, JR.*
- ------------------------------ Director February 6, 1998
John J. Hogan, Jr.
GERARD LOUIS-DREYFUS*
- ------------------------------ Director February 6, 1998
Gerard Louis-Dreyfus
ERNEST F. STEINER*
- ------------------------------ Director February 6, 1998
Ernest F. Steiner
*By: /s/ JEFFREY A. BONNEY
-------------------------
Jeffrey A. Bonney
ATTORNEY-IN-FACT
II-4
<PAGE>
- -----------------------------------------------------------------------------
INDENTURE
Between
LOUIS DREYFUS NATURAL GAS CORP.
and
LASALLE NATIONAL BANK
dated as of
December 11, 1997
- -----------------------------------------------------------------------------
<PAGE>
LOUIS DREYFUS NATURAL GAS CORP.
Reconciliation and Tie between Trust Indenture Act
of 1939 and the Indenture between Louis Dreyfus Natural Gas Corp. and
LaSalle National Bank dated as of December 11, 1997
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310(a)(1).................................... 7.10
(a)(2).................................... 7.10
(a)(3).................................... N/A
(a)(4).................................... N/A
(b).................................. 7.08, 7.10, 10.02
(c)....................................... N/A
Section 311(a)....................................... 7.11
(b)....................................... 7.11
(c)....................................... N/A
Section 312(a)....................................... 2.05
(b)....................................... 10.03
(c)....................................... 10.03
Section 313(a)....................................... 7.06
(b)(1).................................... 7.06
(b)(2).................................... 7.06
(c).....................................7.06, 10.02
(d)....................................... 7.06
Section 314(a)............................ 4.02, 4.03, 7.05, 7.06, 10.02
(b)....................................... N/A
(c)(1).................................... 10.04
(c)(2).................................... 10.04
(c)(3).................................... N/A
(d)....................................... N/A
(e)....................................... 10.05
(f)....................................... N/A
Section 315(a)....................................... 7.01(b)
(b)..................................... 7.05, 10.02
(c)....................................... 7.01(a)
(d).................................... 7.01(c), 7.02
(e)....................................... 6.14
Section 316(a)(last sentence)........................ 2.09
(a)(1)(A)................................. 6.12
(a)(1)(B)................................. 6.13
(a)(2).................................... N/A
(b)....................................... 6.08
Section 317(a)(1).................................... 6.03
(a)(2).................................... 6.04
(b)....................................... 2.04
Section 318(a)....................................... 10.01
- ------------------
N.A. means Not Applicable
NOTE: This Reconcilation and Tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions 1
SECTION 1.02. Other Definitions 12
SECTION 1.03. Incorporation by Reference of Trust Indenture Act 12
SECTION 1.04. Rules of Construction 13
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating 13
SECTION 2.02. Execution and Authentication 14
SECTION 2.03. Registrar and Paying Agent 15
SECTION 2.04. Paying Agent to Hold Money in Trust 15
SECTION 2.05. Securityholder Lists 16
SECTION 2.06. Transfer and Exchange 16
SECTION 2.07. Replacement Securities 17
SECTION 2.08. Outstanding Securities 17
SECTION 2.09. Temporary Securities 18
SECTION 2.10. Cancelation 18
SECTION 2.11. Defaulted Interest 18
SECTION 2.12. CUSIP Numbers 18
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee 19
SECTION 3.02. Selection of Securities To Be Redeemed 19
SECTION 3.03. Notice of Redemption 19
SECTION 3.04. Effect of Notice of Redemption 20
SECTION 3.05. Deposit of Redemption Price 20
SECTION 3.06. Securities Redeemed in Part 21
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ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities 21
SECTION 4.02. SEC Reports 21
SECTION 4.03. Compliance Certificate 22
SECTION 4.04. Further Instruments and Acts 22
SECTION 4.05. Corporate Existence 22
SECTION 4.06. Limitation on Liens 22
SECTION 4.07. Limitation on Sale and Leaseback 23
SECTION 4.08. Exempted Indebtedness 23
SECTION 4.10. Waiver of Stay; Extension of Usury Laws 23
ARTICLE 5
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 5.01. Company May Consolidate, etc., Only on Certain Terms 24
SECTION 5.02. Successor Substituted 25
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default 25
SECTION 6.02. Acceleration of Maturity; Rescission and Annulment 27
SECTION 6.03. Collection of Indebtedness and Suits for Enforcement
by Trustee 28
SECTION 6.04. Trustee May File Proofs of Claim 29
SECTION 6.05. Trustee May Enforce Claims Without Possession of
Securities 30
SECTION 6.06. Application of Money Collected 30
SECTION 6.07. Limitation on Suits 30
SECTION 6.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest 31
SECTION 6.09. Restoration of Rights and Remedies 31
SECTION 6.10. Rights and Remedies Cumulative 32
SECTION 6.11. Delay or Omission Not Waiver 32
SECTION 6.12. Control by Holders 32
SECTION 6.13. Waiver of Past Defaults 32
SECTION 6.14. Undertaking for Costs 33
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SECTION 6.15. Waiver of Usuary, Stay or Extension Laws 33
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee 33
SECTION 7.02. Rights of Trustee 35
SECTION 7.03. Individual Rights of Trustee 36
SECTION 7.04. Trustee's Disclaimer 36
SECTION 7.05. Notice of Defaults 36
SECTION 7.06. Reports by Trustee to Holders 33
SECTION 7.07. Compensation and Indemnity 37
SECTION 7.08. Replacement of Trustee 37
SECTION 7.09. Successor Trustee by Merger 38
SECTION 7.10. Eligibility; Disqualification 39
SECTION 7.11. Preferential Collection of Claims Against Company 39
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance 39
SECTION 8.02. Conditions to Defeasance 40
SECTION 8.03. Application of Trust Money 42
SECTION 8.04. Repayment to Company 42
SECTION 8.05. Indemnity for Government Obligations 42
SECTION 8.06. Reinstatement 42
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders 43
SECTION 9.02. With Consent of Holders 44
SECTION 9.03. Compliance with Trust Indenture Act 45
SECTION 9.04. Revocation and Effect of Consents and Waivers 45
SECTION 9.05. Notation on or Exchange of Securities 45
SECTION 9.06. Trustee To Sign Amendments 45
SECTION 9.07. Payment for Consent 46
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls 46
SECTION 10.02. Notices 46
SECTION 10.03. Communication by Holders with Other Holders 47
SECTION 10.04. Certificate and Opinion as to Conditions Precedent 47
SECTION 10.05. Statements Required in Certificate or Opinion 48
SECTION 10.06. When Securities Disregarded 48
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar 49
SECTION 10.08. Legal Holidays 49
SECTION 10.09. Governing Law 49
SECTION 10.10. No Recourse Against Others 49
SECTION 10.11. Successors 49
SECTION 10.12. Multiple Originals 49
SECTION 10.13. Table of Contents; Headings 49
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INDENTURE dated as of December 11, 1997, between LOUIS DREYFUS NATURAL
GAS CORP., an Oklahoma corporation (the "Company"), and LASALLE NATIONAL
BANK, a national banking association (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 6.875% Senior
Notes Due 2007 (the "Initial Securities") and, if and when issued pursuant to
a registered exchange for Initial Securities, the Company's 6.875% Senior
Notes Due 2007 (the "Exchange Securities") and if and when issued pursuant to
a private exchange for Initial Securities, the Company's 6.875% Senior Notes
Due 2007 (the "Private Exchange Securities", together with the Exchange
Securities and the Initial Securities, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means another Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such first Person.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of Voting Stock or by contract or
otherwise.
"Adjusted Consolidated Net Tangible Assets" means (without duplication),
as of the date of determination, the remainder of: (a) the sum of (i)
discounted future net revenues from proved oil and gas reserves of the
Company and its Subsidiaries calculated in accordance with SEC guidelines
(including adjustment for prices payable to the Company and its Subsidiaries
under Oil and Gas Hedging Contracts) before any state, Federal or foreign
income taxes, as estimated by the Company and confirmed by a nationally
recognized firm of independent petroleum engineers in a reserve report
prepared as of the end of the Company's most recently completed fiscal year
for which audited financial statements are available, as increased by, as of
the date of determination, the estimated discounted future net revenues from
(A) estimated proved oil and gas reserves acquired since such year-end, which
reserves were not reflected in such year-end reserve report, and (B)
estimated oil and gas reserves attributable to upward revisions of estimates
of proved oil and gas reserves since such year-end due to exploration,
development or exploitation activities, in each case calculated in accordance
with SEC guidelines (utilizing the prices utilized in such year-end reserve
report), and decreased by, as of the date of determination, the estimated
discounted future net revenues from (C) estimated proved oil and gas reserves
produced or disposed of since such year-end and (D) estimated oil and gas
reserves attributable to downward revisions of estimates of proved oil and
gas reserves since such year-end due to changes in geological conditions or
other factors which would, in
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accordance with standard industry practice, cause such revisions, in each
case calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year-end reserve report); PROVIDED that, in the case of each
of the determinations made pursuant to clauses(A) through (D), such increases
and decreases shall be as estimated by the Company's petroleum engineers,
unless there is a Material Change as a result of such acquisitions,
dispositions or revisions, in which event the discounted future net revenues
utilized for purposes of this clause (a)(i) shall be confirmed in writing by
a nationally recognized firm of independent petroleum engineers, (ii) the
capitalized costs that are attributable to oil and gas properties of the
Company and its Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no
earlier that the date of the Company's latest available annual or quarterly
financial statements, (iii) the Net Working Capital on a date no earlier than
the date of the Company's latest annual or quarterly financial statements and
(iv) the greater of (A) the net book value on a date no earlier than the date
of the Company's latest annual or quarterly financial statements and (B) the
appraised value, as estimated by independent appraisers, of other tangible
assets of the Company and its Subsidiaries, as of the date no earlier than
the date of the Company's latest audited financial statements, minus (b) the
sum of (i) Minority Interests, (ii) any net gas balancing liabilities of the
Company and its Subsidiaries reflected in the Company's latest audited
financial statements, (iii) to the extent included in (a)(i) above, the
discounted future net revenues, calculated in accordance with SEC guidelines
(utilizing the prices utilized in the Company's year-end reserve report),
attributable to reserves which are required to be delivered to third parties
to fully satisfy the obligations of the Company and its Subsidiaries with
respect to Volumetric Production Payments (determined, if applicable, using
the schedules specified with respect thereto) and (iv) the discounted future
net reserves, calculated in accordance with SEC guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments which, based on
the estimates of production and price assumptions included in determining the
discounted future net revenues specified in (a)(i) above, would be necessary
to fully satisfy the payment obligations of the Company and its Subsidiaries
with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto). If the
Company changes its method of accounting from the successful efforts method
to the full cost or a similar method of accounting, "Adjusted Consolidated
Net Tangible Assets" will continue to be calculated as if the Company were
still using the successful efforts method of accounting.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
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"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, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with such principles; and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor
on the indenture securities.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, 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 opinions and pronouncements in
staff accounting bulletins and similar written statements from the accounting
staff of the SEC.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become liable
for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by
such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence"
when
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used as a noun shall have a correlative meaning. The accretion of principal
of a non-interest bearing or other discount security shall be deemed the
Incurrence of Indebtedness.
"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), but excluding trade
accounts payable arising in the ordinary course of business; (iii) all
obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction other than 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 property
(including, without limitation, 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 of 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 for 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) obligations in respect of Currency agreements, Oil
and Gas Hedging Contracts and Interest Rate Agreements.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Interest Rate Agreement" means in respect of a Person any interest rate
swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Issue Date" means the date on which the Securities are originally
issued.
"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, without limitation, 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 or 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).
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"Material Change" means an increase or decrease (except to the extent
resulting from changes in prices) of more than 30% during a fiscal quarter in
the estimated discounted future net revenues from proved oil and gas reserves
of the Company and its Subsidiaries, calculated in accordance with clause
(a)(i) of the definition of Adjusted Consolidated Net Tangible Assets;
PROVIDED, HOWEVER, that the following will be excluded from the calculation
of Material Change: (a) any acquisitions during the quarter of oil and gas
reserves with respect to which the Company's estimate of the discounted
future net revenues from proved oil and gas reserves has been confirmed by
independent petroleum engineers; and (b) any dispositions of Properties
during such quarter.
"Minority Interest" means any shares of stock of any class of a
Subsidiary that are not owned by the Company or a Subsidiary.
"Net Working Capital" means (a) all current assets of the company and
its Subsidiaries, less (b) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness, in each
case as set forth in consolidated financial statements of the Company
prepared in accordance with GAAP.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Oil and Gas Business" means the business of exploiting, exploring for,
developing, acquiring, operating, producing, processing, gathering,
marketing, storing, selling, hedging, treating, swapping, refining and
transporting hydrocarbons and other related energy businesses.
"Oil and Gas Hedging Contract" means, with respect to any person, any
agreement or arrangement, or any combination thereof, relating to oil and gas
or other hydrocarbon prices, transportation or basis costs or differentials
or other similar financial factors, that is customary in the Oil and Gas
Business and is entered into by such Person in the ordinary course of its
business for the purpose of limiting or managing risks associated with
fluctuations in such prices, costs, differentials or similar factors.
"Oil and Gas Liens" means (a) Liens on any specific property or any
interest therein, construction thereon or improvement thereto to secure all
or any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration,
repair or improvement of, in, under or on such property and the plugging and
abandonment of wells located thereon (it being understood that, in the case
of oil and gas producing properties, or any interest therein, costs incurred
for "development" shall include costs incurred for all facilities relating to
such properties or to projects, ventures or other arrangements of which such
properties form a part or which relate to such properties or interests); (b)
Liens on an oil or gas producing property to secure obligations incurred or
guarantees of obligations incurred in connection with or necessarily incidental
to commitments for the purchase or sale of, or the transportation or
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distribution of, the products derived from such property; (c) Liens arising
under partnership agreements, oil and gas leases, overriding royalty
agreements, net profits agreements, production payment agreements, royalty
trust agreements, incentive compensation programs for geologists,
geophysicists and other providers of technical services to the Company or a
Subsidiary of the Company, master limited partnership agreements, farming
agreements, farmout agreements, division orders, contracts for the sale,
purchase, exchange, transportation, gathering or processing of oil, gas or
other hydrocarbons, unitizations and pooling designations, declarations,
orders and agreements, development agreements, operating agreements,
production sales contracts, area of mutual interest agreements, gas balancing
or deferred production agreements, injection, repressuring and recycling
agreements, salt water or other disposal agreements, seismic or geophysical
permits or agreements, and other agreements which are customary in the Oil
and Gas Business; PROVIDED, HOWEVER, in all instances that such Liens are
limited to the assets that are the subject of the relevant agreement,
program, order or contract; (d) Liens arising in connection with Production
Payments and Reserve Sales; and (e) Liens on pipelines or pipeline facilities
that arise by operation of law.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Permitted Liens" means, with respect to any Person: (i) Liens existing
on the Issue Date; (ii) Liens on property or assets of, or any shares of
stock of, or secured debt of, any corporation existing at the time such
corporation becomes a Subsidiary of the Company or at the time such
corporation is merged into the Company or any of its Subsidiaries; (iii)
Liens in favor of the Company or any of its Subsidiaries; (iv) Liens in favor
of governmental bodies to secure progress or advance payments; (v) Liens
securing industrial revenue or pollution control bonds; (vi) Liens on Property
to secure Indebtedness incurred for the purpose of (A) financing all or any
part of the purchase price of such Property incurred prior to, at the time
of, or within 180 days after, the acquisition of such Property or (B)
financing all or any part of the cost of construction, improvement,
development or expansion of any such Property; (vii) statutory liens or
landlords', carriers', warehouseman's, mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and with respect to amounts not yet delinquent or being contested in good
faith by appropriate proceedings, if a reserve or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have
been made therefor; (viii) Liens on current assets of Subsidiaries securing
Indebtedness of such Subsidiaries; (ix) Oil and Gas Liens; (x) Liens securing
Oil and Gas Hedging Contracts; (xi) any Lien incurred in the ordinary course
of business incidental to the conduct of the business of the Company or the
ownership of its Property including rights of collecting banks having rights
of setoff, revocation, refund or chargeback with respect to money or
instruments of the Company on deposit with or in the possession of such
banks; (xii) Liens incurred to secure performance of obligations with respect
to statutory or regulatory requirements, performance or return-of-money
bonds, surety bonds or other obligations of a like nature and incurred in a
manner consistent with industry practice; (xiii) Liens for taxes, assessments
and governmental charges not yet due or the validity of which are being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been established
to the extent required by GAAP as in effect at such time; and
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(xiv) any extensions, substitutions, replacements or renewals in whole or in
part of a Lien (an "existing Lien") enumerated in clauses (i) through (xiii)
above; PROVIDED that the Lien may not extent beyond (A) the Property or
Indebtedness subject to the existing Lien and (B) improvements and
construction on such Property and the Indebtedness secured by the Lien may
not exceed the Indebtedness secured at the time by the existing Lien.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"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.
"Principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Principal Property" means any Property owned or leased by the Company
or any Subsidiary, the gross book value of which exceeds two percent of
Adjusted Consolidated Net Tangible Assets.
"Production Payments and Reserve Sales" means the grant or transfer by
the Company or a Subsidiary of the Company to any Person of a royalty,
overriding royalty, net profits interest, production payment (whether
volumetric or dollar denominated), partnership or other interest in oil and
gas properties, reserves or the right to receive all or a portion of the
production or the proceeds from the sale of production attributable to such
properties where the holder of such interest has recourse solely to such
production or proceeds of production, subject to the obligation of the
grantor or transferor to operate and maintain, or cause the subject interests
to be operated and maintained, in a reasonably prudent manner or other
customary standard or subject to the obligation of the grantor or transferor
to indemnify for environmental, title or other matters customary in the Oil
and Gas Business, including any such grants or transfers pursuant to
incentive compensation programs on terms that are reasonably customary in the
Oil and Gas Business for geologists, geophysicists and other providers of
technical services to the Company or a Subsidiary of the Company.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in
the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the
Subsidiary to such Person, other than (1) temporary leases for a term,
including renewals at the option of the lessee, of not more than five years,
(2) leases between the Company and a Subsidiary or between Subsidiaries, (3)
leases of Principal Property executed
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by the time of, or within 24 months after the latest of, the acquisition, the
completion of construction or improvement, or the commencement of commercial
operation of the Principal Property, and (4) arrangements pursuant to any
provision of law with an effect similar to the former Section 168(f)(8) of
the Internal Revenue Code of 1954.
"SEC" means the Securities and Exchange Commission.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity," when used with respect to any security or any
installment of interest thereon, means the date specified in such security as
the fixed date on which the principal of such security or such installment of
interest is due and payable.
"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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States
of 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.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
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"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof.
"Wholly-Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares) is owned by the Company or
one or more Wholly-Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -----------
"covenant defeasance option" 8.01(b)
"Event of Default" 6.01
"legal defeasance option" 8.01(b)
"Legal Holiday" 10.08
"Paying Agent" 2.03
"Registrar" 2.03
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Indebtedness;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are
set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to Appendix A
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit
A, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth
in the Appendix and Exhibit A are part of the terms of this Indenture.
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SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities for original issue
upon a written order of the Company signed by two Officers or by an Officer
and either an Assistant Treasurer or an Assistant Secretary of the Company.
Such order shall specify the amount of the Securities to be authenticated and
the date on which the original issue of Securities is to be authenticated.
The aggregate principal amount of Securities outstanding at any time may not
exceed that amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent to the knowledge of the
Trustee, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or any of its
domestically incorporated Wholly-Owned Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent
in connection with the Securities.
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SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest
when so becoming due. The Company shall require each Paying Agent (other
than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities
and shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by the
Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements of
Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested if the same requirements are
met. To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient
to pay all taxes, assessments or other governmental charges in connection
with any transfer or exchange pursuant to this Section. The Company shall
not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none
of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
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All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to
the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the
form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities and deliver them in exchange for temporary Securities.
SECTION 2.10. CANCELATION. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancelation and
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deliver a certificate of such destruction to the Company unless the Company
directs the Trustee to deliver canceled Securities to the Company. The
Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. 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, HOWEVER, that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities
to be redeemed and the paragraph of the Securities pursuant to which the
redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. 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.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies
with applicable legal and securities exchange requirements, if any, and that
the Trustee in its sole discretion shall deem to be fair and appropriate and
in accordance with methods generally used at the time of selection by
fiduciaries in similar circumstances. The Trustee shall make the selection
from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities
that have denominations larger than $1,000. Securities and portions of them
the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
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redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address, with copies of such notices to
the Trustee.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price stated in the notice, plus accrued interest to the
redemption date. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
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SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or
a Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancelation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient
to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee and
provide Securityholders, within 15 days after it files them with the SEC,
copies of its annual report and the information, documents and other reports
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act. Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall continue to file with the SEC
and provide the Trustee and Securityholders with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to
such Sections, such information, documents and reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections. The Company also shall comply with the
other provisions of TIA Section 314(a). Notwithstanding anything to the
contrary herein, the Trustee shall have no duty to review such documents for
purposes of determining compliance with any provisions of this Indenture.
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that
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occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
The Company agrees to notify the Trustee of any change in its fiscal year.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.05. CORPORATE EXISTENCE. Subject to the provisions of
Article 5, the Company will do or cause to be done all things necessary to
and will cause each of its Subsidiaries to preserve and keep in full force
and effect its corporate existence, material rights (charter and statutory)
and franchises of the Company and each of its Subsidiaries; PROVIDED,
HOWEVER, that the Company shall not be required to preserve any such material
right or franchise or the corporate existence of any of its Subsidiaries if
(a) the preservation thereof is no longer desirable in the conduct of the
business of the Company or such Subsidiary and (b) the loss thereof is not
disadvantageous in any material respect to the Holders of the Securities.
SECTION 4.06. LIMITATION ON LIENS. Subject to Article 8 (to the extent
it is applicable to the Securities) the Company will not, and will not permit
any of its Subsidiaries to, create, incur or otherwise cause or suffer to
exist or become effective any Liens of any kind upon any Principal Property
or any shares of stock or Indebtedness of any Subsidiary that owns or leases
any Principal Property (whether such Principal Property, shares of stock or
Indebtedness are now owned or hereafter acquired) unless all payments due
under this Indenture and the Securities are secured on an equal and ratable
basis with the obligations so secured until such time as such obligation is
no longer secured by a Lien, except for Permitted Liens.
The covenant contained in this Section 4.06 will be subject to the
provision for exempted Indebtedness in Section 4.08.
SECTION 4.07. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Subject
to Article 8 (to the extent it is applicable to the Securities), neither the
Company nor any Subsidiary will enter into any Sale and Leaseback Transaction
with respect to any Principal Property unless either (a) the Company or such
Subsidiary would be entitled, pursuant to the provisions of this Indenture,
to incur Indebtedness secured by a Lien on the property to be leased without
equally and ratably securing the Securities or (b) the Company, within 180
days after the effective date of such transaction, applies to the voluntary
retirement of its funded debt an amount equal to the value of such
transaction, defined as the greater of the net proceeds of the sale of the
property leased in such transaction or the fair value, in the opinion of the
Board of Directors, of the leased property at the time such transaction was
entered into.
The covenant contained in this Section 4.07 will be subject to the
provision for exempted Indebtedness in Section 4.08.
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SECTION 4.08. EXEMPTED INDEBTEDNESS. Notwithstanding the provisions
contained in Sections 4.06 and 4.07, the Company and its Subsidiaries may
issue, assume or guarantee Indebtedness secured by a Lien without securing
the Securities, or may enter into Sale and Leaseback Transactions without
retiring funded debt, or enter into a combination of such transactions, if
the sum of the principal amount of all such Indebtedness and the aggregate
value of all such Sale and Leaseback Transactions does not at any time exceed
15% of the Adjusted Consolidated Net Tangible Assets of the Company. For the
purposes of any calculation pursuant to this Section 4.08, the Trustee may
rely on an Officers' Certificate setting forth such calculation.
SECTION 4.09. WAIVER OF STAY; EXTENSION OF USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all or any portion
of the principal of, or interest on the Securities as contemplated herein or
in the Securities, wherever enacted, now or at any time hereafter in force,
or that may affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that it will
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 5
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 5.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and interest
on all the Securities and the performance or observance of every obligation
and covenant of this Indenture on the part of the Company to be performed
or observed;
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(2) immediately after giving effect to such transaction, no Default
shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 5.01, the successor
Person formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease,
the predecessor Person shall be released from its obligations and covenants
under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security at its Stated Maturity; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the outstanding
Securities a written notice specifying such default or breach and
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requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(4) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company or a Significant
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or a Significant Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or a Significant Subsidiary or of any substantial part of their
respective properties, or ordering the winding up or liquidation of the
affairs of the Company or a Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(5) the commencement by the Company or a Significant Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either the Company or a Significant Subsidiary to the entry of
a decree or order for relief in respect of the Company or a Significant
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against either the Company or a Significant Subsidiary, or the
filing by either the Company or a Significant Subsidiary of a petition or
answer or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by either the Company or a Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a Significant
Subsidiary or of any substantial part of their respective properties, or
the making by either the Company or a Significant Subsidiary of an
assignment for the benefit of creditors, or the admission by either the
Company or a Significant Subsidiary in writing of an inability to pay the
debts of either the Company or a Significant Subsidiary generally as they
become due, or the taking of corporate action by the Company or a
Significant Subsidiary in furtherance of any such action.
SECTION 6.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default (other than an Event of Default specified in Section
6.01(4) or 6.01(5)) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders),
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and upon any such declaration such principal shall become immediately due and
payable. If an Event of Default specified in Section 6.01(4) or 6.01(5)
occurs, the principal of all the Securities shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder,
become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article 6 provided, the Holders of a
majority in principal amount of the outstanding Securities, by written notice
to the Company and the Trustee, may (but are not required to) rescind and
annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 6.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. If
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Stated Maturity thereof,
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the Trustee is authorized to recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest,
and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 6.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities 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 the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
and directed by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; PROVIDED,
HOWEVER, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
SECTION 6.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the
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Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 6.06. APPLICATION OF MONEY COLLECTED. Any money collected by
the Trustee pursuant to this Article 6 shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 7.07;
SECOND: To the payment of the amounts then due and unpaid for first,
interest on, and, second, for principal of (and premium, if any, on) the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for interest
and principal (and premium, if any) respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, as their interest may appear or as a court of competent
jurisdiction shall direct.
SECTION 6.07. LIMITATION ON SUITS. No Holder of any Security shall
have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities.
The foregoing limitations on the pursuit of remedies by a Securityholder
shall not apply to a suit instituted by a Holder of Securities for the
enforcement of payment of the principal of or interest on such Security on or
after the applicable due date specified in such Security. A Securityholder
may not use this Indenture to prejudice the rights of another Securityholder
or to obtain a preference or priority over another Securityholder.
SECTION 6.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any)
and interest on such Security on the respective Stated Maturities expressed
in such Security and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 6.09. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 2.07, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
SECTION 6.11. DELAY OR OMISSION NOT WAIVER. No delay or omission of
the Trustee or of any Holder of any Securities to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article 6 or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.12. CONTROL BY HOLDERS. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy
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available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee or its counsel determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction. Prior to taking
any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it by such requesting Holders in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.13. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in principal amount of the outstanding Securities may on behalf of
the Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 6.14. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant.
SECTION 6.15. WAIVER OF USURY, STAY OR EXTENSION LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee or its counsel shall examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer or by a Trust Officer upon
advice of counsel unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.12.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
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(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder or in the exercise of any
of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall
be subject to the provisions of this Section and to the provisions of
the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on any such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Issuer's covenants in
Article 4. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01(1), 6.01(2) and 4.01 (excluding the
nonpayment of special interest relating to a Registration Default), or
(ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
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SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment of principal of or interest on any
Security (including payments pursuant to the mandatory redemption provisions
of such Security, if any), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services as
Trustee, Registrar, Paying Agent and any other function. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Company shall reimburse the Trustee upon request for
all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this Indenture and any related document and the
performance of its duties thereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Trustee may have separate counsel and the Company
shall pay the fees and expenses of such counsel. The Company need not
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reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, gross
negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(4) or (5) with respect to
the Company, the expenses are intended to constitute expenses of
administration under any applicable bankruptcy law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee
with 60 days advance notice and may appoint a successor Trustee. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit
of the retiring 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 without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities
of the Company are outstanding if the requirements for such exclusion set
forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. Upon
this Indenture (or any amendment or supplement hereto) being qualified under
the TIA, the Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancelation or
(ii) all outstanding Securities have become due and payable, whether at
maturity or as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the
Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect.
The Trustee shall acknowledge satisfaction and discharge of
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this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.06, 4.07 and 4.08, and the operation of Sections 6.01(3),
6.01(4) and 6.01(5) (but, in the case of Sections 6.01(4) and 6.01(5),
with respect only to Significant Subsidiaries) ("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
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(3), 6.01(4) and 6.01(5) (but, in the case of
Sections 6.01(4) and 6.01(5), with respect only to Significant Subsidiaries).
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.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08
and in this Article 8 shall survive until the Securities have been paid in
full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and
8.05 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest
on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(4) or 6.01(5) with respect to
the Company occurs which is continuing at the end of the period;
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(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been
a change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years,
and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
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SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; PROVIDED, HOWEVER,
that, if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of
any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities, or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(7) to make any change that does not adversely affect the rights of
any Securityholder.
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After an amendment under this Section becomes effective, the Company
shall mail to Securityholders, with a copy to the Trustee, a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange for the Securities).
However, without the consent of each Securityholder affected thereby, an
amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Section 6.08 or 6.13 or the second sentence of
this Section;
(7) impair the right of any Holder to institute suit for enforcement
of any payment on or with respect to such Holder's Securities; or
(8) impair the right of any Holder to receive payment of interest on
and principal of such Holder's Securities on or after the due dates
therefor.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders, with a copy to the Trustee, a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
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SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind
every Securityholder. An amendment or waiver becomes effective upon the
execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding
the immediately preceding paragraph, those Persons who were Securityholders
at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be
valid or effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
SECTION 9.07. 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 Securities 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.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 10.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway
Suite 600
Oklahoma City, OK 73134
Fax: (405) 749-6661
Attention of Chief Financial Officer
with a copy to:
Crowe & Dunlevy
1800 Mid-America Tower
20 North Broadway
Oklahoma City, OK 73102
Fax: (405) 272-5238
Attention of Michael M. Stewart, Esq.
if to the Trustee:
LaSalle National Bank
135 South LaSalle Street
Chicago, IL 60603
Fax: (312) 904-2236
Attention of Diane Swanson
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
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SECTION 10.06. WHEN SECURITIES DISREGARDED. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall be disregarded and deemed not
to be outstanding, except that, for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 10.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable
rules for their functions.
SECTION 10.08. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of Illinois. If a payment date is a Legal Holiday, payment shall
be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a regular record date
is a Legal Holiday, the record date shall not be affected.
SECTION 10.09. GOVERNING LAW. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of
law to the extent that the application of the laws of another jurisdiction
would be required thereby.
SECTION 10.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 10.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 10.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of
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reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
LOUIS DREYFUS NATURAL GAS CORP.,
By: /s/ Jeffrey A. Bonney
-----------------------------------
Name: Jeffrey A. Bonney
Title: Executive Vice President and
Chief Financial Officer
LASALLE NATIONAL BANK,
By: /s/ Diane Swanson
-----------------------------------
Name: Diane Swanson
Title: Assistant Vice President
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APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security bearing the
restricted securities legend set forth in Section 2.3(d) and which is held by
an IAI in accordance with Section 2.1(c).
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Securities" means the 6.875% Senior Notes Due 2007 to be
issued pursuant to this Indenture in connection with a Registered Exchange
Offer pursuant to the Registration Agreement.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Salomon Brothers Inc, Chase Securities Inc.,
Morgan Stanley & Co. Incorporated, NationsBanc Montgomery Securities, Inc.
and Nesbitt Burns Securities Inc.
"Initial Securities" means the 6.875% Senior Notes Due 2007, issued
under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 6.875% Senior Notes Due 2007 to
be issued pursuant to this Indenture in connection with a Private Exchange
pursuant to the Registration Agreement.
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"Purchase Agreement" means the Purchase Agreement dated December 4,
1997, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Registration Agreement dated as of
December 11, 1997, among the Company and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto
and shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company, in connection with the offer and sale of Initial Securities
or Private Exchange Securities, pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and
Securities that bear or are required to bear the legend set forth in Section
2.3(d) hereto.
1.2 OTHER DEFINITIONS
DEFINED IN
TERM SECTION:
---- ----------
"Agent Members"................................. 2.1(b)
"Global Security"............................... 2.1(a)
"Regulation S".................................. 2.1(a)
"Rule 144A"..................................... 2.1(a)
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2. THE SECURITIES.
2.1 FORM AND DATING.
The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement. The Initial Securities will be resold,
initially only to QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A"), and in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs, purchasers in reliance on Regulation S and IAIs.
(a) GLOBAL SECURITIES. Initial Securities shall be issued initially
in the form of one or more permanent global Securities in definitive, fully
registered form without interest coupons with the global securities legend
and restricted securities legend set forth in Exhibit 1 hereto (each, a
"Global Security"), which shall be deposited on behalf of the purchasers
of the Initial Securities represented thereby with the Trustee, at its
Chicago, Illinois office, as custodian for the Depository (or with such
other custodian as the Depository may direct), and registered in the name
of the Depository or a nominee of the Depository, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Global Securities may from time to time
be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b) and pursuant to an order from the Company, authenticate
and deliver initially one or more Global Securities that (a) shall be
registered in the name of the Depository for such Global Security or Global
Securities or the nominee of such Depository and (b) shall be delivered by
the Trustee to such Depository or pursuant to such Depository's
instructions or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the Securities
Custodian or under such Global Security, and the Depository may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect
to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members,
the operation of customary practices of such Depository governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.
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(c) CERTIFICATED SECURITIES. Except as provided in Section 2.3 or
2.4, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$200,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange,
respectively, as directed pursuant to the Registration Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of
the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify
the amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Exchange Securities or Private
Exchange Securities. The aggregate principal amount of Securities
outstanding at any time may not exceed $200,000,000 except as provided in
Section 2.07 of this Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; PROVIDED, HOWEVER, that the Definitive Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section 2.3(b)
or pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse of the Security); or
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(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on the
reverse of the Security); or
(C) if such Definitive Securities are being transferred (w)
pursuant to an exemption from registration in accordance with
Rule 144; or (x) in reliance on another exemption from the
registration requirements of the Securities Act: (i) a certification
to that effect (in the form set forth on the reverse of the Security)
and (ii) if the Company or Registrar so requests, an opinion of
counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the legend set forth in
Section 2.3(d)(i).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of
the requirements set forth below. Upon receipt by the Trustee of a
Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a
QIB in accordance with Rule 144A, (B) to an IAI that has furnished to
the Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee)
or (C) outside the United States in an offshore transaction within the
meaning of Regulation S and in compliance with Rule 904 under the
Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel
such Definitive Security and cause, or direct the Securities Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Securities Custodian, the aggregate
principal amount of Securities represented by the Global Security to be
increased by the aggregate principal amount of the Definitive Security to
be exchanged and shall credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in the
Global Security equal to the principal amount of the Definitive Security so
canceled. If no Global Securities are then outstanding, the Company shall
issue and the Trustee shall authenticate, upon written order of the Company
in the form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the
procedures of the
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Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the
Depositary's procedures containing information regarding the participant
account of the Depositary to be credited with a beneficial interest in the
Global Security and such account shall be credited in accordance with such
instructions with a beneficial interest in the Global Security and the
account of the Person making the transfer shall be debited by an amount equal
to the beneficial interest in the Global Security being transferred. In the
case of a transfer of a beneficial interest in a Global Security to an IAI,
the transferee must furnish a signed letter to the Trustee containing certain
representations and agreements (the form of which letter can be obtained from
the Trustee).
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such
interest is being transferred in an amount equal to the principal amount
of the interest to be so transferred, and the Registrar shall reflect on
its books and records the date and a corresponding decrease in the
principal amount of Global Security from which such interest is being
transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security or any portion thereof is
exchanged for Securities in definitive registered form pursuant to Section
2.4 or Section 2.09 of the Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities intended
to ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be
adopted by the Company.
(d) LEGEND.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
in substitution thereof) shall bear a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
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COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE
HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO
THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS
ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A LETTER WHICH MAY BE OBTAINED FROM THE COMPANY OR
THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT WILL
FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2)
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION
OR (3) A
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NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF
RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for
a Definitive Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security, in either case,
if the Holder certifies in writing to the Registrar that its request for
such exchange was made in reliance on Rule 144 (such certification to be
in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Security or such Private Exchange Security will cease to
apply, the requirements requiring any such Initial Security or such
Private Exchange Security issued to certain Holders be issued in global
form will cease to apply, and a certificated or global Initial Security
or Private Exchange Security without legends will be available to the
transferee of the Holder of such Initial Securities or Private Exchange
Securities upon exchange of such transferring Holder's certificated Initial
Security or Private Exchange Security or directions to transfer such
Holder's interest in the Global Security, as applicable.
A-8
<PAGE>
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
cease to apply and certificated Initial Securities with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will
be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(vi) After the expiration of the "40-day restricted period" (within
the meaning of Rule 903(c)(3) of Regulation S), upon a sale or transfer of
any Initial Security acquired pursuant to Regulation S, all requirements
pertaining to legends on such Initial Security will cease to apply, the
requirements requiring any such Initial Security be issued in global form
will cease to apply, and an Initial Security in certificated or global
form without the Restricted Security Legend will be available to the
transferee of the Holder of such Initial Securities.
(e) CANCELATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled,
such Global Security shall be returned to the Depository for cancelation or
retained and canceled by the Trustee. At any time prior to such cancelation,
if any beneficial interest in a Global Security is exchanged for certificated
or Definitive Securities, redeemed, repurchased or canceled, the principal
amount of Securities represented by such Global Security shall be reduced and
an adjustment shall be made on the books and records of the Trustee (if it is
then the Securities Custodian for such Global Security) with respect to such
Global Security, by the Trustee or the Securities Custodian, to reflect such
reduction.
(f) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities,
Definitive Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments,
A-9
<PAGE>
or similar governmental charge payable in connection therewith (other
than any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06 and 9.05).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) any certificated or Definitive Security
selected for redemption in whole or in part pursuant to Article 3 of this
Indenture, except the unredeemed portion of any certificated or Definitive
Security being redeemed in part, or (b) any Security for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase
or redeem Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in
the Depository or other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect
to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Securities shall be given
or made only to or upon the order of the registered Holders (which shall
be the Depository or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised
only through the Depository subject to the applicable rules and procedures
of the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other
A-10
<PAGE>
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
2.4 CERTIFICATED SECURITIES.
(a) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations
of $1,000 and any integral multiple thereof and registered in such names as
the Depository shall direct. Any certificated Initial Security delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(d), bear the restricted securities legend set forth
in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under
this Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
A-11
<PAGE>
EXHIBIT 1 to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
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.
[Restricted Securities Legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY
OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) IN AN OFFSHORE
Ex-1-1
<PAGE>
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A LETTER WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR
HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
Ex-1-2
<PAGE>
No. $[200,000,000]
CUSIP No.:
ISIN:
6.875% Senior Notes Due 2007
LOUIS DREYFUS NATURAL GAS CORP., an Oklahoma corporation, promises to
pay to Cede & Co., or registered assigns, the principal sum set forth in the
Schedule of Increases and Decreases in Global Security on December 1, 2007.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
Ex-1-3
<PAGE>
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: December , 1997
LOUIS DREYFUS NATURAL GAS CORP.,
By:
-------------------------------
President
----------------------------------
Secretary
Dated: December , 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE NATIONAL BANK,
as Trustee, certifies that this
is one of the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
Ex-1-4
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
6.875% Senior Note Due 2007
1. Interest
(a) LOUIS DREYFUS NATURAL GAS CORP., an Oklahoma corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above;
provided, however, that if a Registration Default (as defined hereunder in
accordance with the Registration Agreement) occurs, additional interest will
accrue on this Security at a rate of 0.25% per annum from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. The Company will pay
interest semiannually on June 1 and December 1 of each year. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from December 11, 1997. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by the
Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Special Interest. The holder of this Security is entitled to the
benefits of a Registration Agreement, dated as of December 11, 1997, among the
Company and the Purchasers named therein (the "Registration Agreement").
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Registration Agreement. In the event that
(i) by the 150th day following the Issue Date, the Exchange Offer Registration
Statement is not filed with the Commission, (ii) by the 180th day following
the Issue Date, neither the Exchange Offer Registration Statement is declared
effective nor (if the Exchange Offer is not permitted as described above) the
Shelf Registration Statement is filed with the Commission, or (iii) by the
210th day following the Issue Date, the Exchange Offer is not consummated or
the Shelf Registration Statement is not declared effective with respect
thereto (each such event referred to in clauses (i) through (iii), a
"Registration Default"), interest will accrue on the applicable Securities (in
addition to stated interest on such Securities) which, except as provided
below, shall be the sole and exclusive remedy for such Registration Default
from and including the next day following each such Registration Default. In
each case such additional interest (the "Special Interest") will be payable in
cash semiannually in arrears each June 1 and December 1, at a rate per annum
equal to 0.25% of the principal amount of such Securities for each such
Registration Default. The aggregate amount of Special Interest payable
pursuant to the above provisions will in no event exceed 0.25% per annum of
the principal amount of such Securities which, except as provided below, shall
be the sole and exclusive remedy for such Registration Default. Upon (a) the
filing of the Exchange Offer Registration Statement after the 150-day period
described in clause (i) above, (b) the effectiveness of the Exchange Offer
Registration Statement or the filing of the Shelf Registration
Ex-1-5
<PAGE>
Statement after the 180-day period described in clause (ii) above or (c) the
consummation of the Exchange Offer for such Securities or the effectiveness of
a Shelf Registration Statement, as the case may be, after the 210-day period
described in clause (iii) above, the Special Interest payable on such
Securities as a result of the applicable Registration Default will cease to
accrue. For purposes of the preceding sentence, the curing of a Registration
Default by the means described in clause (b) above shall constitute a cure of
the Registration Defaults described in clauses (i) and (ii) above, and the
curing of a Registration Default by the means described in clause (c) above
shall constitute a cure of the Registration Defaults described in clauses (i),
(ii) and (iii) above. The Company will have no other liabilities for monetary
damages with respect to the above; provided, however, that in the event the
Company breaches, fails to comply with or violates certain provisions of the
Registration Agreement, the holders shall be entitled to, and the Company
shall not oppose the granting of, equitable relief, including injunction and
specific performance.
In the event that a Shelf Registration Statement is declared effective
pursuant to the paragraph preceding the immediately preceding paragraph, if
the Company fails to keep such Registration Statement continuously effective
for the period required by the Registration Agreement (except as specifically
permitted therein), then from such time as the Shelf Registration Statement is
no longer effective until the earlier of (i) the date that the Shelf
Registration Statement is again deemed effective and (ii) the date that is the
earliest of (x) the second anniversary of the Issue Date (or until the first
anniversary of the effective date if the Shelf Registration Statement is filed
at the request of the Initial Purchasers), (y) the time when the Securities
registered thereunder can be sold by non-affiliates pursuant to Rule 144 under
the Securities Act without any limitation under classes (c), (e), (f) and (h)
of Rule 144, or (z) the date as of which all such Securities are sold pursuant
to the Shelf Registration Statement, Special Interest shall accrue at a rate
per annum equal to 0.25% of the principal amount of the Securities which,
except as provided below, shall be the sole and exclusive remedy for such
Registration Default and shall be payable in cash semiannually in arrears each
June 1 and December 1. The Company will have no other liabilities for
monetary damages with respect to the above; provided, however, that in the
event the Company breaches, fails to comply with or violates certain
provisions of the Registration Agreement, the holders shall be entitled to,
and the Company shall not oppose the granting of, equitable relief, including
injunction and specific performance.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the
close of business on the May 15 or November 15 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by The Depository Trust Company. The Company will
make all payments in respect of a certificated Security (including principal,
premium
Ex-1-6
<PAGE>
and interest) by mailing a check to the registered address of each
Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may
accept in its discretion).
3. Paying Agent and Registrar
Initially, LaSalle National Bank ("Trustee"), will act as Paying Agent
and Registrar. The Company may appoint and change any Paying Agent, Registrar
or co-registrar without notice. The Company or any of its domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of December
11, 1997 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company limited
to $200,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture).
The Company will not, and will not permit any of its Subsidiaries to,
create, incur or otherwise cause or suffer to exist or become effective any
Liens of any kind upon any Principal Property or any shares of stock or
indebtedness of any Subsidiary that owns or leases any Principal Property
(whether such Principal Property, shares of stock or indebtedness are now
owned or hereafter acquired) unless all payments due under the Indenture and
the Securities are secured on an equal and ratable basis with the obligations
so secured until such time as such obligation is no longer secured by a Lien,
except for Permitted Liens.
Neither the Company nor any Subsidiary will enter into any Sale and
Leaseback Transaction with respect to any Principal Property unless either (a)
the Company or such Subsidiary would be entitled, pursuant to the provisions
of the Indenture, to incur Indebtedness secured by a Lien on the property to
be leased without equally and ratably securing the Securities or (b) the
Company, within 180 days after the effective date of such transaction, applies
to the voluntary retirement of its funded debt an amount equal to the value of
such transaction, defined as the greater of the net proceeds of the sale of
the
Ex-1-7
<PAGE>
property leased in such transaction or the fair value, in the opinion of the
Board of Directors, of the leased property at the time such transaction was
entered into.
Notwithstanding the foregoing limitations on Liens and Sale and Leaseback
Transaction, the Company and its Subsidiaries may issue, assume, or guarantee
Indebtedness secured by a Lien without securing the Securities, or may enter
into Sale and Leaseback Transactions without retiring funded debt, or enter
into a combination of such transactions, if the sum of the principal amount of
all such Indebtedness and the aggregate value of all such Sale and Leaseback
Transactions does not at any time exceed 15% of the Consolidated Net Tangible
Assets of the Company.
5. Optional Redemption
The Securities will be redeemable at any time, at the option of the
Company, in whole or from time to time in part, upon not less than 30 and not
more than 60 days' notice mailed to each Holder to be redeemed at the Holder's
address appearing in the books of the Registrar, on any date prior to maturity
(the "Redemption Date") at a price equal to 100% of the principal amount
thereof plus accrued interest to the Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Redemption Date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the
Securities plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Security (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the Redemption
Date, of:
(a) each interest payment that, but for such redemption, would
have been payable on the Security (or portion thereof) being redeemed
on each interest payment date occurring after the Redemption Date
(excluding any accrued interest for the period prior to the Redemption
Date); and
(b) The principal amount that, but for such redemption, would
have been payable at the final maturity of the Security (or portion
thereof) being redeemed;
over
(2) the principal amount of the Security (or portion thereof) being
redeemed.
The present values of interest and principal payments referred to in clause
(i) above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the Redemption Date
at a
Ex-1-8
<PAGE>
discount rate equal to the Treasury Yield (as defined below) plus 20 basis
points. Copies of all such calculations and their resulting values will be
delivered to the Trustee (upon request to the Company) by the Company and shall
be attached to an Officers' Certificate.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 45 business days
prior to the Redemption Date, or if the institution so appointed is unwilling
or unable to make such calculation, such calculation will be made by Salomon
Brothers Inc or, if such firm is unwilling or unable to make such calculation,
by an independent investment banking institution of national standing
appointed by the Trustee (in any such case, an "Independent Investment
Banker"). Any fees incurred in connection with an Independent Investment
Banker shall be paid by the Company.
For purposes of determining the Make-Whole Premium, "Treasury Yield"
means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Securities, calculated to
the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield will
be determined as of the third business day immediately preceding the
applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15(519) Selected
Interest Rates" or any successor release (the "H.15 Statistical Release"). If
the H.15 Statistical Release sets forth a weekly average yield for United
States Treasury Notes having a constant maturity that is the same as the
Remaining Term, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Treasury Yield will be calculated by
interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term and the United States Treasury Notes that have
a constant maturity closest to and less than the Remaining Term (in each case
as set forth in the H.15 Statistical Release). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100th of 1%, with
any figure of 1/200th of 1% or above being rounded upward. If weekly average
yields for United States Treasury Notes are not available in the H.15
Statistical Release or otherwise, then the Treasury Yield will be calculated
by interpolation of comparable rates selected by the Independent Investment
Banker.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Security of $1,000 in original principal amount or
less shall be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancelation of the original Security.
Ex-1-9
<PAGE>
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its request unless an abandoned property law designates another Person.
After any such payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
10. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
Ex-1-10
<PAGE>
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Securityholder, the Company and
the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act,
or to make any change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies
Under the Indenture, Events of Default include a (i) default in the
payment of any interest upon any of the Securities for 30 days or more after
such payment is due; (ii) default in the payment of the principal of and
premium, if any, on any of the Securities when due; (iii) default by the
Company in the performance, or breach, of any of its other covenants in the
Indenture which will not have been remedied by the end of a period of 60 days
after written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the outstanding
Securities; and (iv) certain events of bankruptcy, insolvency or
reorganization of the Company or a Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines or its
counsel advises it that withholding notice is in the interest of the Holders.
Ex-1-11
<PAGE>
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
17. Holders' Compliance with Registration Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Ex-1-12
<PAGE>
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation
is made as to the accuracy of such numbers either as printed on the Securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway
Suite 600
Oklahoma City, OK 73134
Attention of Corporate Secretary
Ex-1-13
<PAGE>
______________________________________________________________________________
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to____________________________
__________(Print or type assignee's name, address and zip code)(Insert
assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _______agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
______________________________________________________________________________
Date: Your Signature:
----------- -----------------------------------
---------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Ex-1-14
<PAGE>
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such
Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:
CHECK ONE BOX BELOW
(1) -- to the Company; or
(2) -- pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) -- inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) -- inside the United States to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act of 1933) that, prior to such transfer,
furnishes to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(5) -- outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(6) -- pursuant to another available exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (4)
or (5) is checked, the Trustee may require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such
as the exemption provided by Rule 144 under such Act.
----------------------------------
Signature
Ex-1-15
<PAGE>
Signature Guarantee:
- --------------------------------- ---------------------------------
(Signature must be guaranteed) Signature
---------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:--------------------- --------------------------------------
NOTICE: To be executed by an executive
officer
Ex-1-16
<PAGE>
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
<TABLE>
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Global Security Global Security such decrease or increase) Securities Custodian
- -------- ------------------------ ------------------------ -------------------------- -----------------------
<S> <C> <C> <C> <C>
</TABLE>
Ex-1-17
<PAGE>
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY
No.: $
CUSIP No.:
ISIN No.:
6.875% Senior Notes Due 2007
LOUIS DREYFUS NATURAL GAS CORP., an Oklahoma corporation, promises to pay
to , or registered assigns, the principal sum
of Dollars on December 1, 2007.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
Additional provisions of this Security are set forth on the other side of this
Security.
Dated: , 1997
LOUIS DREYFUS NATURAL GAS CORP.,
By:
------------------------------
President
[CORPORATE SEAL] ------------------------------
Secretary
Dated: , 1997
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
<PAGE>
LASALLE NATIONAL BANK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
------------------------------
Authorized Signatory
A-2
<PAGE>
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
6.875% Note Due 2007
1. Interest
LOUIS DREYFUS NATURAL GAS CORP., an Oklahoma corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above
[; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate of 0.25% per annum from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured].(1) The Company will pay
interest semiannually on June 1 and December 1 of each year. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from December 11, 1997. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by the
Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of
business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof
or, if no U.S. dollar account maintained by the payee with a bank in the
United States is designated by any holder to the Trustee or the Paying Agent
at least 30 days prior to the relevant due date for payment (or such other
date as the Trustee may accept in its discretion), by mailing a check to the
registered address of such holder.
- -------------------------
(1) Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange
Offer has been consummated nor a Shelf Registration Statement has been
declared effective in accordance with the Registration Rights Agreement.
A-3
<PAGE>
3. Paying Agent and Registrar
Initially, LaSalle National Bank, a national banking association
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
December 11, 1997 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured obligations of the Company limited
to $200,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture).
The Company will not, and will not permit any of its Subsidiaries to,
create, incur or otherwise cause or suffer to exist or become effective any
Liens of any kind upon any Principal Property or any shares of stock or
indebtedness of any Subsidiary that owns or leases any Principal Property
(whether such Principal Property, shares of stock or indebtedness are now
owned or hereafter acquired) unless all payments due under the Indenture and
the Securities are secured on an equal and ratable basis with the obligations
so secured until such time as such obligation is no longer secured by a Lien,
except for Permitted Liens.
Neither the Company nor any Subsidiary will enter into any Sale and
Leaseback Transaction with respect to any Principal Property unless either
(a) the Company or such Subsidiary would be entitled, pursuant to the
provisions of the Indenture, to incur Indebtedness secured by a Lien on the
property to be leased without equally and ratably securing the Securities or
(b) the Company, within 180 days after the effective date of such
transaction, applies to the voluntary retirement of its funded debt an amount
equal to the value of such transaction, defined as the greater of the net
proceeds of the sale of the property leased in such transaction or the fair
value, in the opinion of the Board of Directors, of the leased property at
the time such transaction was entered into.
Notwithstanding the foregoing limitations on Liens and Sale and
Leaseback Transaction, the Company and its Subsidiaries may issue, assume, or
guarantee Indebtedness secured by a Lien without securing the Securities, or
may enter into Sale and Leaseback Transactions without retiring funded debt,
or enter into a combination of such transactions, if the sum of the principal
amount of all such
A-4
<PAGE>
Indebtedness and the aggregate value of all such Sale and Leaseback
Transactions does not at any time exceed 15% of the Consolidated Net Tangible
Assets of the Company.
5. Optional Redemption
The Securities will be redeemable at any time, at the option of the
Company, in whole or from time to time in part, upon not less than 30 and not
more than 60 days' notice mailed to each Holder to be redeemed at the
Holder's address appearing in the books of the Registrar, on any date prior
to maturity (the "Redemption Date") at a price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest
due on an interest payment date that is on or prior to the Redemption Date)
plus a Make-Whole Premium, if any (the "Redemption Price"). In no event will
the Redemption Price ever be less than 100% of the principal amount of the
Securities plus accrued interest to the Redemption Date.
The amount of the Make-Whole Premium with respect to any Security (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the Redemption Date,
of:
(a) each interest payment that, but for such redemption, would have
been payable on the Security (or portion thereof) being redeemed on each
interest payment date occurring after the Redemption Date (excluding any
accrued interest for the period prior to the Redemption Date); and
(b) the principal amount that, but for such redemption, would have
been payable at the final maturity of the Security (or portion thereof)
being redeemed;
over
(2) the principal amount of the Security (or portion thereof) being
redeemed. The present values of interest and principal payments referred to
in clause (i) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to
the Redemption Date at a discount rate equal to the Treasury Yield (as
defined below) plus 20 basis points.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 45 business days
prior to the Redemption Date, or if the institution so appointed is unwilling
or unable to make such calculation, such calculation will be made by Salomon
Brothers Inc or, if such firm is unwilling or unable to make such
calculation, by an independent investment banking
A-5
<PAGE>
institution of national standing appointed by the Trustee (in any such case,
an "Independent Investment Banker"). Such fees are to be paid for by the
Company.
For purposes of determining the Make-Whole Premium, "Treasury Yield"
means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Securities, calculated
to the nearest 1/12th of a year (the "Remaining Term"). The Treasury Yield
will be determined as of the third business day immediately preceding the
applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15(519) Selected
Interest Rates" or any successor release (the "H.15 Statistical Release").
If the H.15 Statistical Release sets forth a weekly average yield for United
States Treasury Notes having a constant maturity that is the same as the
Remaining Term, then the Treasury Yield will be equal to such weekly average
yield. In all other cases, the Treasury Yield will be calculated by
interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term and the United States Treasury Notes that
have a constant maturity closest to and less than the Remaining Term (in each
case as set forth in the H.15 Statistical Release). Any weekly average
yields so calculated by interpolation will be rounded to the nearest 1/100th
of 1%, with any figure of 1/200th of 1% or above being rounded upward. If
weekly average yields for United States Treasury Notes are not available in
the H.15 Statistical Release or otherwise, then the Treasury Yield will be
calculated by interpolation of comparable rates selected by the Independent
Investment Banker.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Security of $1,000 in original principal amount or
less shall be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in
the name of the Holder thereof upon cancelation of the original Security.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If
money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
A-6
<PAGE>
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
10. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the
Company and the Trustee may amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of
the Indenture, or to provide for uncertificated Securities in addition to or
in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the
A-7
<PAGE>
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder.
12. Defaults and Remedies
Under the Indenture, Events of Default include a (i) default in the
payment of any interest upon any of the Securities for 30 days or more after
such payment is due; (ii) default in the payment of the principal of and
premium, if any, on any of the Securities when due; (iii) default by the
Company in the performance, or breach, of any of its other covenants in the
Indenture which will not have been remedied by the end of a period of 60 days
after written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the outstanding
Securities; and (iv) certain events of bankruptcy, insolvency or
reorganization of the Company or a Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such
Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if
it determines that withholding notice is in the interest of the Holders.
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect obligations
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
A-8
<PAGE>
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
[17. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.](2)
18. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
- ---------------------
(2) For Exchange or Private Exchange Securities only.
A-9
<PAGE>
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway
Suite 600
Oklahoma City, OK 73134
Attention of Corporate Secretary
-----------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to__________________________________
(Print or type assignee's name, address and zip code) (Insert assignee's soc.
sec. or tax I.D. No.) and irrevocably appoint agent
to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
------------------------------------------------------------------
Date: Your Signature:
--------------- ------------------------------
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Sign exactly as your name appears on the other side of this
Security.
A-10
<PAGE>
Exhibit 4.2
<PAGE>
LOUIS DREYFUS NATURAL GAS CORP.
6.875% Senior Notes Due 2007
PURCHASE AGREEMENT
New York, New York
December 4, 1997
Salomon Smith Barney
Salomon Brothers Inc
Chase Securities Inc.
Morgan Stanley & Co. Incorporated
NationsBanc Montgomery Securities, Inc.
Nesbitt Burns Securities Inc.
In care of Salomon Brothers Inc
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"),
proposes to issue and sell to you (the "Purchasers"), $200,000,000 aggregate
principal amount of its 6.875% Senior Notes Due December 1, 2007 (the
"Securities"). The Securities are to be issued under an indenture (the
"Indenture") to be dated as of December 11, 1997, between the Company and
LaSalle National Bank, as trustee (the "Trustee").
The sale of the Securities to you will be made without registration of
the Securities under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemptions from the registration requirements of the
Securities Act. You have advised the Company that you will make an offering
of the Securities purchased by you hereunder in accordance with Section 4
hereof as soon as you deem advisable after the execution and delivery of this
Agreement.
<PAGE>
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated October 16, 1997 (the "Preliminary
Memorandum"), and a final offering memorandum, dated December 4, 1997 (the
"Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Purchasers. Any references herein to the Preliminary Memorandum or the
Final Memorandum shall be deemed to include all exhibits thereto and all
documents incorporated by reference therein which were filed under the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Execution Time (as defined below); and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Final Memorandum shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Execution Time which
is incorporated by reference therein.
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the Registration Agreement dated as of
the Closing Date (the "Registration Agreement") to be entered into between the
Company and the Purchasers. Pursuant to the Registration Agreement, the
Company has agreed to file with the Securities and Exchange Commission (the
"Commission") an exchange offer registration statement or a shelf registration
statement (each, a "Registration Statement") pursuant to the Securities Act,
to register sales, or resales, of the Securities following the sale of the
Securities contemplated hereby. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties hereto.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Purchaser as set forth below in this Section 1:
(a) The Preliminary Memorandum and the Final Memorandum and any
amendments or supplements thereto did not and will not, as of their
respective dates, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in
or omissions from the Final Memorandum based upon written information
furnished to the Company by any Purchaser specifically for use therein,
it being understood and agreed that the only such information is that
described as such in Section 8(b) hereof. The Company's Annual Report on
Form 10-K most recently filed with the Commission, as amended, and all
subsequent reports (as originally filed, and as amended), on the
respective dates filed by the Company (collectively, the "Exchange Act
Reports") which have been filed by the Company with the Commission or
sent to stockholders pursuant to the Exchange Act do not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the
2
<PAGE>
statements therein, in the light of the circumstances under which they
were made, not misleading. Such Exchange Act Reports, when they were
filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(b) The offer and sale of the Securities in the manner contemplated
by this Agreement will be exempt from the registration requirements of
the Securities Act by reason of Section 4(2) thereof, and Rule 144A
("Rule 144A") and Regulation S ("Regulation S") thereunder.
(c) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act ("Regulation D")), nor any
person acting on behalf of the Company or any affiliate has directly, or
indirectly, (i) made offers or sales of any security, or solicited offers
to buy any security, under circumstances that would require the
registration of the Securities under the Securities Act or (ii) engaged
in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offering of the
Securities.
(d) Neither the Company nor any affiliate nor any person acting on
behalf of the Company or any affiliate has engaged in any directed
selling efforts (as that term is defined in Regulation S) with respect to
the Securities, and the Company and its affiliates and any person acting
on its or their behalf have complied with the offering restrictions
requirement of Regulation S.
(e) The Securities satisfy the eligibility requirements set forth
in Rule 144A(d)(3) under the Securities Act.
(f) The Company has full corporate power and authority to enter
into this Agreement, the Registration Agreement, the Indenture and the
Securities and to perform the transactions contemplated hereby and
thereby (the "Transactions"). (i) This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid
and binding obligation of the Company and (ii) the execution and delivery
of the Registration Agreement, the Indenture and the Securities have been
duly authorized by the Company and, when duly executed and delivered by
the parties thereto, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
respective terms, subject to applicable bankruptcy, insolvency,
reorgani-zation, moratorium and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
3
<PAGE>
(g) Upon execution and delivery of the Indenture, and when the
Securities are issued, authenticated and delivered in accordance with the
Inden-ture and paid for in accordance with the terms of this Agreement,
the Securities will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, reorganization, morato-rium and similar laws
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(h) The execution, delivery and performance of this Agreement, the
Registration Agreement, the Indenture and the Securities by the Company
and the consummation of the Transactions will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under (i) the articles of incorporation, by-laws or other organizational
documents of the Company or any of its subsidiaries, (ii) any material
statute, rule or regulation applicable to the Company or any subsidiary
or any order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary or any of their
respective properties, (iii) any agreement or instrument relating to
borrowed money to which the Company or any subsidiary is a party or by
which the Company or any subsidiary is bound or to which any of their
respective properties is subject, or (iv) any other material agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of their respective properties is subject. No consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body which has not already
been obtained is required for the execution and delivery of this
Agreement, the Registration Agreement, the Indenture, the Securities or
the consummation of the Transactions, except for compliance with the
Securities Act, state securities or blue sky laws and the clearance of
such offering with the National Association of Securities Dealers, Inc.
The term "subsidiary" means each person of which a majority of the voting
equity securities or other interests is owned, directly or indirectly, by
the Company.
(i) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
and the Final Memorandum to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(j) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States Investment
Company Act of 1940 (the "Investment Company Act"), nor is it a closed
end investment company required to be registered, but not registered
thereunder; and the Company is not and, after giving effect to the
offering and sale of the Securities and
4
<PAGE>
the application of the proceeds thereof as described in the Final
Memorandum, will not be an "investment company" as defined in the
Investment Company Act.
(k) The Company is subject to the reporting requirements of Section
13 or 15(d) under the Exchange Act.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Purchaser, and each Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 98.642% of the
principal amount thereof, plus accrued interest, if any, from December 11,
1997 to the Closing Date (as hereinafter defined), the respective principal
amounts of the Securities set forth opposite such Purchaser's name in Schedule
I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on December 11, 1997, or such
later date as the Purchasers may agree or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be made to the
Purchasers against payment by the Purchasers of the purchase price thereof to
or upon the order of the Company by wire transfer of immediately available
funds to a U.S. dollar account designated by the Company or such other manner
of payment as may be designated by the Company and agreed to by the Purchasers
not less than two business days prior to the Closing Date. Delivery of the
Securities shall be made through the facilities of the Depository Trust
Company and payment for the Securities shall be made at the offices of
Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New
York. Certificates for the Securities shall be registered in such names and
in such denominations as the Purchasers may request not less than three full
business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Purchasers in New York, New York, not later than
1:00 p.m. on the business day prior to the Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges that the
Securities have not been registered under the Securities Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act or pursuant to
an effective registration statement under the Securities Act and (ii)
severally and not jointly, represents and warrants to and agrees, with the
Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
5
<PAGE>
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of
any form of general solicitation or general advertising (within the
meaning of Regulation D) in the United States, except pursuant to a
registered public offering as provided in the Registration Agreement.
5. AGREEMENTS. The Company agrees with the several Purchasers that:
(a) The Company will furnish to the Purchasers, without charge, as
many copies of the Final Memorandum and any supplements and amendments
thereof or thereto as the Purchasers may reasonably request. The Company
will pay the expenses of printing or other production of all documents
relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
at any time prior to the completion of the sale of the Securities by the
Purchasers if the Purchasers reasonably object to such amendment or
supplement within two business days after receiving a copy thereof.
(c) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which the
Final Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the state-ments therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Purchasers of the same and will prepare
and provide to the Purchasers the proposed amendment or supplement which
will correct such statement or omission or effect such compliance and
will not publish such amendment or supplement if the Purchasers
reasonably object to such amendment or supplement within two business
days after receiving a copy thereof.
(d) Except as provided in Exhibit A, the Company will arrange for
the qualification of the Securities for sale by the Purchasers under the
laws of such jurisdictions as the Purchasers may designate and will
maintain such qualifications in effect so long as required for the sale
of the Securities; provided, however, the Company shall not be required
to do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service of
process or taxation in any jurisdiction where it is not now so subject.
The Company will promptly advise the Purchasers of the
6
<PAGE>
receipt by it of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) Neither the Company nor any of its Affiliates, nor any person
acting on behalf of the Company or any of its affiliates, will engage in
any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States, except pursuant to a registered public
offering as provided in the Registration Agreement.
(f) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the
Company will, for so long as and at any time that it is not subject to
Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such
holder or prospective purchaser, any information required to be provided
by Rule 144A(d)(4) under the Securities Act. This covenant is intended
to be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(g) Neither the Company nor any of its affiliates, nor any person
acting on behalf of the Company or any of its affiliates, will engage in
any directed selling efforts with respect to the Securities except
pursuant to a registered public offering as provided in the Registration
Agreement, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(h) Neither the Company nor any of its affiliates, nor any person
acting on behalf of the Company or any of its affiliates, will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) the offering of which
security will be integrated with the sale of the Securities in a manner
which would require the registration of the Securities under the
Securities Act (except as provided in the Registration Agreement).
(i) The Company shall include information substantially in the form
set forth in Exhibit B in each Final Memorandum.
(j) The Company shall use its best efforts in cooperation with the
Purchasers to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
7
<PAGE>
(k) The Company will not, until 180 days following the Closing
Date, without the prior written consent of the Purchasers, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, or file a registration statement for, any debt
securities issued or guaranteed by the Company (other than (i) the
Securities or (ii) pursuant to a registered public offering as provided
in the Registration Agreement). The Company will not at any time offer,
sell, contract to sell or otherwise dispose of, directly or indirectly,
any securities under circumstances where such offer, sale, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act or the safe harbor of Regulation S thereunder to cease to
be applicable to the offer and sale of the Securities as contemplated by
this Agreement and the Final Memorandum.
(l) In connection with the offering, until the Purchasers shall
have notified the Company of the completion of the resale of the
Securities, neither the Company nor any of its affiliates has or will,
either alone or with one or more other persons, bid for or purchased for
any account in which it or any of its affiliates has a beneficial
interest any Securities or attempt to induce any person to purchase any
Securities; and neither it nor any of its affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading
in, or of raising the price of, the Securities.
6. Conditions to the Obligations of the Purchasers. The obligations of
the Purchasers to purchase the Securities, shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Company shall have furnished to the Purchasers the opinion
of Crowe & Dunlevy, counsel for the Company, dated the Closing Date, to
the effect that:
(i) each of the Company and its subsidiary, Louis Dreyfus Gas
Marketing Corp. (the "Subsidiary"), has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Final Memorandum, and is duly qualified
to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business;
(ii) all the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except
8
<PAGE>
as otherwise set forth in the Final Memorandum, all outstanding
shares of capital stock of the Subsidiary are owned by the Company
either directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; and the Securities conform to the
description thereof contained in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect); and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Purchasers pursuant to this
Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture;
(v) the statements in the Final Memorandum under the heading
"Certain Federal Income Tax Consequences" fairly summarize the
matters therein described;
(vi) such counsel has no reason to believe that as of the
Execution Time the Final Memorandum (other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the state-ments
therein not misleading or that the Final Memorandum includes any
untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of
the transactions contemplated herein, except (A) such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
9
<PAGE>
Purchasers, (B) with respect to the Exchange Offer (as defined in
the Final Memorandum) and the Shelf Registration Statement (as
defined in the Final Memorandum), filings or registration under the
Securities Act or the Exchange Act and (C) such other approvals
(specified in such opinion) as have been obtained;
(ix) the Indenture conforms as to form in all material respects
with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder;
(x) neither the issue and sale of the Securities, the execution
and delivery of the Indenture, the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of the
Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company or any of
its subsidiaries is a party or bound or any judgment, order or
decree known to such counsel to be applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries; and
(xi) it is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Oklahoma or the United States, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Purchasers and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Final Memorandum in this
paragraph (a) include any amendments or supplements thereof or thereto at
the Closing Date.
(b) The Purchasers shall have received from Cravath, Swaine &
Moore, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities,
the Final Memorandum (other than the financial statements and related
schedules therein, as to which such counsel need express no view) and
other related matters as the Purchasers may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
10
<PAGE>
(c) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum together with
any supplements thereto and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and
(ii) since the date of the most recent financial statements
incorporated by reference in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(d) At the Closing Date, Ernst & Young LLP shall have furnished to
the Purchasers a letter or letters, dated as of the Closing Date, in form
and substance satisfactory to the Purchasers, confirming that they are
independent accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and that they have
performed a review of the unaudited interim financial information for the
nine-month period ending September 30, 1997, in accordance with Statement
of Auditing Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules reported on by them and the pro forma
financial statements included or incorporated in the Final
Memorandum comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the
Exchange Act and the related published rules and regulations
thereunder that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration statement on
Form S-3 under the Securities Act;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review in accordance with standards established by the
American Institute of Certified Public Accountants under Statement
of Auditing Standards No. 71 of the unaudited interim financial
information for the nine-month period ended September 30, 1997, and
as at
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<PAGE>
September 30, 1997; carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the stockholders,
directors and committees of the Company and its subsidiaries; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to
December 31, 1996, nothing came to their attention which caused them
to believe that:
(1) any unaudited financial statements included in the
Final Memorandum do not comply in form in all material respects
with applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Final Memorandum; and
(2) with respect to the period subsequent to September 30,
1997, there were any changes, at a specified date not more than
three business days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the stockholders' equity
of the Company or decreases in working capital of the Company
and its subsidiaries as compared with the amounts shown on the
September 30, 1997, consolidated balance sheet included or
incorporated by reference in the Final Memorandum, or for the
period from October 1, 1997, to such specified date there were
any decreases, as compared with the corresponding period in the
preceding year in operating income, net revenues or income
before income taxes or in total or per share amounts of net
income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the Purchasers;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Final Memorandum and the documents incorporated by
reference therein,
12
<PAGE>
including the information set forth under the captions "Summary",
"Use of Proceeds" and "Capitalization", and certain other specified
information incorporated by reference in the Final Memorandum agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements incorporated by reference in the Final
Memorandum (the "pro forma financial statements"); carrying out
certain specified procedures; inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters; and proving the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which caused
them to believe that the pro forma financial statements do not
comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Final Memorandum in this paragraph (d) include any
supplement thereto at the date of the letter.
(e) At the Execution Time, Arthur Andersen LLP shall have furnished
to the Purchasers a letter, dated as of November 20, 1997, in form and
substance satisfactory to the Purchasers, confirming that they are
independent accountants with respect to the Company within the meaning of
Rule 101 of the American Institute of Certified Public Accountants' Code
of Professional Conduct and its interpretations and rulings and stating
in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules incorporated in the Final Memorandum
and reported on by them comply in form in all material respects with
the applicable accounting requirements of the Securities Act and the
Exchange Act and the related published rules and regulations
thereunder that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration statement on
Form S-3 under the Securities Act;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by American Exploration Company
("American") and its subsidiaries; their limited review in
accordance with standards established by the American Institute of
Certified Public Accountants under Statement of Auditing Standards
No. 71 of the unaudited interim financial information for the
six-month period ended June 30, 1997, and as at June 30, 1997;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would
13
<PAGE>
not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of American
and its subsidiaries; and inquiries of certain officials of American
who have responsibility for financial and accounting matters of
American and its subsidiaries as to transactions and events
subsequent to December 31, 1996, nothing came to their attention
which caused them to believe that any unaudited financial statements
incorporated in the Final Memorandum do not comply in form in all
material respects with applicable accounting requirements and with
the published rules and regulations of the Commission with respect
to financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the Final
Memorandum; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries)
incorporated by reference in the Final Memorandum agrees with the
accounting records of American and its subsidiaries, excluding any
questions of legal interpretation;
References to the Final Memorandum in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Final Memorandum (exclusive of any
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (d) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Purchasers, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final
Memorandum (exclusive of any supplement thereto).
(g) As of the Closing Date, the Securities shall be rated not lower
than BBB- by Standard & Poor's Ratings Services and Ba1 by Moody's
Investors Service. Subsequent to the Execution Time, there shall not
have been (i) any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act) or (ii)
any notice given of any
14
<PAGE>
intended or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible
change.
(h) Prior to the Closing Date, the Company shall have furnished to
the Purchasers such further information, certificates and documents as
the Purchasers may reasonably request.
(i) The Registration Agreement shall have been duly executed and
delivered by the Company.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Purchasers and counsel for the Purchasers, this
Agreement and all obligations of the Purchasers hereunder may be canceled at,
or at any time prior to, the Closing Date by the Purchasers. Notice of such
cancelation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Purchasers, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
7. REIMBURSEMENT OF PURCHASERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the
obligations of the Purchasers set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Purchasers, the Company will reimburse the
Purchasers severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Purchaser, the directors, officers, employees and agents of each
Purchaser and each person who controls any Purchaser within the meaning
of either the Securities Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Preliminary Memorandum or the Final Memorandum or any amendment or
15
<PAGE>
supplement thereto, or the incorporated Exchange Act Reports, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and, subject to
Section 8(c), will reimburse each Purchaser, promptly after the receipt
of demand therefor accompanied by an invoice in reasonable detail, for
any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability
or action; PROVIDED, HOWEVER, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company
by or on behalf of any Purchaser through Salomon Smith Barney
specifically for inclusion therein, it being understood and agreed that
the only such information consists of the information described as such
in subsection (b) below; and PROVIDED, FURTHER, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged
omission from the Preliminary Memorandum, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Purchaser that sold the Securities concerned to the person asserting any
such losses, claims, damages or liabilities, to the extent that such sale
was an initial resale by such Purchaser and any such loss, claim, damage
or liability of such Purchaser results from the fact that there was not
sent or given to such person, at or prior to the written confirmation of
the sale of such Securities to such person, a copy of the Final
Memorandum (exclusive of any material included therein but not attached
thereto) if the Company had previously furnished copies thereof to such
Purchaser. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Purchaser will severally and not jointly indemnify and
hold harmless the Company, each of its directors, each of its officers,
and each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Purchaser, but only with reference to
written information relating to such Purchaser furnished to the Company
by or on behalf of such Purchaser through Salomon Smith Barney
specifically for inclusion in the documents referred to in the foregoing
indemnity, it being understood and agreed that the only such information
furnished by any Purchaser consists of the following information in the
Final Memorandum furnished on behalf of each Purchaser: The last
paragraph at the bottom of the cover page concerning the terms of the
offering by the Purchasers, the legend concerning stabilizing on page
three of the Final Memorandum, the second sentence of the fourth
paragraph and the seventh paragraph, each under the caption "Plan of
Distribution." This indemnity agreement will be in addition to any
liability which any Purchaser may otherwise have.
16
<PAGE>
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not,
in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying
party's expense (including the cost of any investigation) to represent
the indemnified party in any action for which indemnification is sought
(in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); PROVIDED,
HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of one firm of such separate counsel
plus one firm of counsel in each local jurisdiction where the employment
of separate local counsel is necessary or material to the defense of an
action by the indemnified party if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and the Purchasers agree
to contribute to the aggregate losses, claims, damages and
17
<PAGE>
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses")
to which the Company, and one or more of the Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits
received by the Company and by the Purchasers, respectively, from the
offering of the Securities; PROVIDED, HOWEVER, that in no case shall any
Purchaser be responsible for any amount in excess of the purchase
discount or commission applicable to the Securities purchased by such
Purchaser hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of
the Company and of the Purchasers, respectively, in connection with the
statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. For the purpose of this
paragraph 8(d), benefits received by the Company shall be deemed to be
equal to the total net proceeds from the offering (before deducting
expenses) received by each of them, and benefits received by the
Purchasers shall be deemed to be equal to the total purchase discounts
and commissions, in each case as set forth on the cover page of the Final
Memorandum. Relative fault shall be determined by reference to whether
any alleged untrue statement or omission relates to information provided
by the Company or the Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Purchasers agree
that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation which does not
take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Purchasers'
respective obligations to contribute pursuant to this paragraph 8(d)
shall be several in proportion to their respective purchase obligations
and not joint. For purposes of this Section 8, each person who controls
a Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of a
Purchaser shall have the same rights to contribution as such Purchaser,
and each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act, each officer of the Company and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. DEFAULT BY A PURCHASER. If any one or more Purchasers shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Purchaser or Purchasers hereunder on the Closing Date and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Purchasers shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate amount of Securities set forth opposite the names
18
<PAGE>
of all the remaining Purchasers) the Securities which the defaulting Purchaser
or Purchasers agreed but failed to purchase; PROVIDED, HOWEVER, that in the
event that the aggregate amount of Securities which the defaulting Purchaser
or Purchasers agreed but failed to purchase shall exceed 10% of the total
principal amount of Securities that the Purchasers are obligated to purchase
on such Closing Date, the remaining Purchasers shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Purchasers do not purchase all the
Securities to be purchased on such Closing Date, this Agreement will terminate
without liability to any nondefaulting Purchaser or the Company. In the event
of a default by any Purchaser as set forth in this Section 9, such Closing
Date shall be postponed for such period, not exceeding seven days, as the
Purchasers shall determine in order that the required changes in the Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Purchaser of its
liability, if any, to the Company and any nondefaulting Purchaser for damages
occasioned by its default hereunder. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Purchasers, by notice given to the Company prior to
delivery of and payment for the Securities, if prior to such time (i) trading
in the Company's common stock shall have been suspended by the Commission or
the New York Stock Exchange or trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is such as to make it, in the
judgment of the Purchasers, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereof or thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Purchaser or the Company or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Smith Barney,
at 388 Greenwich Street, New York, New York, 10013, Attention: Legal
Department; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to
19
<PAGE>
it at 14000 Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma 73134,
Attention: President.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. REPRESENTATION OF PURCHASERS. Salomon Brothers Inc will act for the
several Purchasers in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the Purchasers jointly
or by Salomon Brothers Inc will be binding upon all the Purchasers.
15. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principle of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York
in any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
16. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Salomon Smith Barney" shall mean Smith Barney Inc. or Salomon Brothers Inc
to the extent that any such party is a signatory to this Agreement.
20
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Purchasers.
Very truly yours,
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ Jeffrey A. Bonney
----------------------------------
Name: Jeffrey A. Bonney
Title: Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES, INC.
NESBITT BURNS SECURITIES INC.
By: SALOMON BROTHERS INC
By: /s/ James C.V. Rogers
--------------------------------
Name: James C.V. Rogers
Title: Director
21
<PAGE>
Schedule I
Purchasers
Principal
Purchasers Amount
- ---------- ------------
Salomon Brothers Inc $ 60,000,000
Chase Securities Inc. 50,000,000
Morgan Stanley & Co. Incorporated 50,000,000
NationsBanc Montgomery Securities, Inc. 20,000,000
Nesbitt Burns Securities Inc. 20,000,000
------------
TOTAL $200,000,000
<PAGE>
EXHIBIT A
SELLING RESTRICTIONS FOR OFFERS AND
SALES OUTSIDE THE UNITED STATES
(1)
(a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. Each
Purchaser represents and agrees that, except as otherwise permitted by
Section 4(a)(i) of the Agreement to which this is an exhibit, it has
offered and sold the Securities, and will offer and sell the Securities,
(i) as part of their distribution at any time and (ii) otherwise until 40
days after the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, each Purchaser represents and agrees that
neither it, nor any of its affiliates nor any person acting on its or
their behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and that it and they have complied and
will comply with the offering restrictions requirement of Regulation S.
Each Purchaser agrees that, at or prior to the confirmation of a sale of
Securities (other than a sale of Securities pursuant to Section 4(a)(i)
of the Agreement to which this is an exhibit), it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and December 11, 1997,
except in either case in accordance with Regulation S, Rule 144A or
other exemption from registration under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
(b) Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except
with its affiliates or with the prior written consent of the Company.
(c) Terms used in this Section have the meanings given to them by
Regulation S.
<PAGE>
(2) Each Purchaser represents and agrees that (i) it has not offered or
sold, and will not offer or sell, in the United Kingdom, by means of any
document, any Securities other than to persons whose ordinary business it is
to buy or sell shares or debentures, whether as principal or as agent (except
in circumstances which do not constitute an offer to the public within the
meaning of the Companies Act 1985 of Great Britain), (ii) it has complied and
will comply with all applicable provisions of the Financial Services Act of
1986 of the United Kingdom with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom, and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the document may otherwise lawfully be issued or
passed on.
(3) No action has been or will be taken by the Company or any other
person that would permit the offer or sale of the Securities or the
distribution of the Final Memorandum or any other offering material relating
to the Securities in any jurisdiction where action for that purpose is
required. The Company shall have no responsibility with respect to the right
of any person to offer or sell Securities or to distribute the Final
Memorandum or any other offering material relating to the Securities in any
jurisdiction. Accordingly, no Purchaser shall offer or sell any Securities,
or distribute the Final Memorandum or any other offering material relating to
the Securities, in any jurisdiction except in compliance with applicable law.
Each Purchaser shall obtain any consent, approval or authorization required
for it to offer or sell Securities, or to distribute the Final Memorandum or
any other offering material relating to the Securities under the laws or
regulations of any jurisdiction where it proposes to make offers or sales of
Securities, or to distribute the Final Memorandum or any other offering
material relating to the Securities.
A-2
<PAGE>
EXHIBIT B
NOTICE TO INVESTORS
OFFERS AND SALES BY THE INITIAL PURCHASERS
The Notes have not been registered under the Securities Act and may not
be offered or sold in the United States or to, or for the account or benefit
of, U.S. persons except in accordance with an applicable exemption from the
registration requirements thereof. Accordingly, the Notes are being offered
and sold only (i) in the United States to QIBs under Rule 144A under the
Securities Act and (ii) outside the United States to non-U.S. persons
("foreign purchasers") in reliance upon Regulation S under the Securities Act.
Each foreign purchaser that is a purchaser of Notes from the Initial
Purchasers (an "Initial Foreign Purchaser") will be required to sign a
certificate in the form provided by the Initial Purchasers.
INVESTOR REPRESENTATIONS AND RESTRICTIONS ON RESALE
Each purchaser of the Notes will be deemed to have represented and agreed
as follows:
(1) it is acquiring the Notes for its own account or for an account with
respect to which it exercises sole investment discretion, and that it or such
account is a QIB or a foreign purchaser outside the United States;
(2) it acknowledges that the Notes have not been registered under the
Securities Act and may not be sold except as permitted below;
(3) it understands and agrees (x) that such Notes are being offered only
in a transaction not involving any public offering within the meaning of the
Securities Act, and (y) that (A) if within two years after the date of
original issuance of the Notes or if within three months after it ceases to be
an affiliate (within the meaning of Rule 144 under the Securities Act) of the
Company, it decides to resell, pledge or otherwise transfer such Notes on
which the legend set forth below appears, such Notes may be resold, pledged or
transferred only (i) to the Company, (ii) so long as such security is eligible
for resale pursuant to Rule 144A, to a person whom the seller reasonably
believes is a QIB that purchases for its own account or for the account of a
QIB to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A (as indicated by the box checked by the transferor on
the Certificate of Transfer on the reverse of the Note if such Note is not in
book-entry form), (iii) in an offshore transaction in accordance with
Regulation S (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the Note if such Note is not in
book-entry form), (iv) to an Institutional Accredited Investor, as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act (as indicated by the
box checked by the transferor on the Certificate of Transfer on the reverse of
the Note if such Note is not in book-entry form), that is acquiring the Notes
for investment purposes and not for distribution, and a certificate which may
be obtained from the Company or the Trustee is delivered by the transferee to
the Company and the Trustee, (v) pursuant to an exemption from registration
under the Securities Act provided by
<PAGE>
Rule 144 (if applicable) under the Securities Act or (vi) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States, (B) the purchaser will, and each subsequent holder is required to,
notify any purchaser of Notes from it of the resale restrictions referred to
in (A) above, if then applicable, and (C) with respect to any transfer of
Notes by an Institutional Accredited Investor, such holder will deliver to the
Company and the Trustee such certificates and other information as they may
reasonably require to confirm that the transfer by it complies with the
foregoing restrictions;
(4) it understands that the notification requirement referred to in (3)
above will be satisfied, in the case only of transfers by physical delivery of
certificated Notes other than a Global Note, by virtue of the fact that the
following legend will be placed on the Notes unless otherwise agreed by the
Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO
THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFERROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2), (3), or (7) UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY
FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE
B-2
<PAGE>
TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY
AGREES IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES
AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-US PERSON OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2) of RULE 902 UNDER) REGULATION S UNDER
THE SECURITIES ACT."
(5) it (i) is able to fend for itself in the transactions contemplated by
this Offering Memorandum; (ii) has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of
its prospective investment in the Notes; and (iii) has the ability to bear the
economic risks of its prospective investment and can afford the complete loss
of such investment.
(6) it has received a copy of the Offering Memorandum relating to the
offering of the Notes and acknowledged that it has had access to such
financial and other information, and has been afforded the opportunity to ask
questions of the Company and receive answers thereto, as it deems necessary in
connection with its decision to purchase Notes; and
(7) it understands that the Company, the Initial Purchasers and others
will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and agrees that if any of the acknowledgments,
representations and warranties deemed to have been made by it by its purchase
of the Notes are no longer accurate, it shall promptly notify the Company and
the Initial Purchasers. If it is acquiring the Notes as a fiduciary or agent
for one or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make the
foregoing acknowledgments, representations and agreements on behalf of such
account.
B-3
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EXHIBIT 4.3
<PAGE>
LOUIS DREYFUS NATURAL GAS CORP.
6.875% Senior Notes Due 2007
REGISTRATION AGREEMENT
New York, New York
December 11, 1997
Salomon Smith Barney
Salomon Brothers Inc
Chase Securities Inc.
Morgan Stanley & Co. Incorporated
NationsBanc Montgomery Securities, Inc.
Nesbitt Burns Securities Inc.
In care of Salomon Brothers Inc
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"),
proposes to issue and sell to Salomon Brothers Inc, Chase Securities Inc.,
Morgan Stanley & Co. Incorporated, NationsBanc Montgomery Securities, Inc.
and Nesbitt Burns Securities Inc. (collectively, the "Initial Purchasers"),
upon the terms set forth in a purchase agreement of even date herewith (the
"Purchase Agreement"), its 6.875% Senior Notes Due 2007 (the "Securities")
(the "Initial Placement"). As an inducement to the Initial Purchasers to
enter into the Purchase Agreement and in satisfaction of a condition to the
Initial Purchasers' obligations thereunder, the Company agrees with the
Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii)
for the benefit of the holders from time to time of the Securities until such
time as such Securities have been sold pursuant to an Exchange Offer
Registration Statement or Shelf Registration Statement (as defined below)
(including the Initial Purchasers) (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used
in this Agreement, the following capitalized defined terms shall have the
following meanings:
<PAGE>
"ACT" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"AFFILIATE" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"CLOSING DATE" has the meaning set forth in the Purchase Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"EXCHANGE OFFER REGISTRATION PERIOD" means the 180 day period following
the consummation of the Registered Exchange Offer, exclusive of any period
during which any stop order shall be in effect suspending the effectiveness
of the Exchange Offer Registration Statement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means a registration statement of
the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"EXCHANGING DEALER" means any Holder (which may include the Initial
Purchasers) which is a broker-dealer, electing to exchange Securities
acquired for its own account as a result of market-making activities or other
trading activities, for New Securities.
"HOLDER" has the meaning set forth in the preamble hereto.
"INDENTURE" means the Indenture relating to the Securities dated as of
December 11, 1997, between the Company and LaSalle National Bank, as trustee,
as the same may be amended from time to time in accordance with the terms
thereof.
"INITIAL PLACEMENT" has the meaning set forth in the preamble hereto.
"MAJORITY HOLDERS" means the Holders of a majority of the aggregate
principal amount of Securities registered under a Registration Statement.
"MANAGING UNDERWRITERS" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering.
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<PAGE>
"NEW SECURITIES" means debt securities of the Company identical in all
material respects to the Securities (except that the cash interest and
interest rate step-up provisions and the transfer restrictions will be
modified or eliminated, as appropriate), to be issued under the Indenture or
the New Securities Indenture.
"NEW SECURITIES INDENTURE" means an indenture between the Company and the
New Securities Trustee, identical in all material respects with the Indenture
(except that the cash interest and interest rate step-up provisions will be
modified or eliminated, as appropriate).
"NEW SECURITIES TRUSTEE" means a bank or trust company reasonably
satisfactory to the Initial Purchasers, as trustee with respect to the New
Securities under the New Securities Indenture.
"OFFERING MEMORANDUM" has the meaning set forth in the Purchase Agreement.
"PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended
or supplemented by any prospectus supplement, with respect to the terms of
the offering of any portion of the Securities or the New Securities, covered
by such Registration Statement, and all amendments and supplements to the
Prospectus, including post-effective amendments.
"REGISTERED EXCHANGE OFFER" means the proposed offer to the Holders to
issue and deliver to such Holders, in exchange for the Securities, a like
principal amount of the New Securities.
"REGISTRATION STATEMENT" means any Exchange Offer Registration Statement
or Shelf Registration Statement that covers any of the Securities or the New
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"SALOMON SMITH BARNEY" shall mean Smith Barney Inc. or Salomon Brothers
Inc to the extent that any such party is a signatory to this Agreement.
"SECURITIES" has the meaning set forth in the preamble hereto.
"SHELF REGISTRATION" means a registration effected pursuant to Section 3
hereof.
"SHELF REGISTRATION PERIOD" has the meaning set forth in Section 3(b)
hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" registration statement of
the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, amendments and supplements to such registration
3
<PAGE>
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"TRUSTEE" means the trustee with respect to the Securities under the
Indenture.
"UNDERWRITER" means any underwriter of Securities in connection with an
offering thereof under a Shelf Registration Statement.
2. REGISTERED EXCHANGE OFFER; RESALES OF NEW SECURITIES BY EXCHANGING
DEALERS; PRIVATE EXCHANGE. (a) The Company shall prepare and, not later
than 150 days following the date of original issuance of the Securities,
shall file with the Commission the Exchange Offer Registration Statement with
respect to the Registered Exchange Offer. The Company shall use its best
efforts to cause the Exchange Offer Registration Statement to become
effective under the Act within 180 days of the date of original issuance of
the Securities.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange
Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for New Securities
(assuming that such Holder is not an affiliate of the Company within the
meaning of the Act, acquires the New Securities in the ordinary course
of such Holder's business and has no arrangements with any person to
participate in the distribution of the New Securities) to trade such New
Securities from and after their receipt without any limitations or
restrictions under the Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the
United States.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than
30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The
City of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
4
<PAGE>
(i) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancelation all Securities so
accepted for exchange; and
(iii) cause the Trustee or the New Securities Trustee, as the
case may be, promptly to authenticate and deliver to each Holder of
Securities New Securities equal in principal amount to the
Securities of such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company acknowledge that,
pursuant to interpretations by the Commission's staff of Section 5 of
the Act, and in the absence of an applicable exemption therefrom, each
Exchanging Dealer is required to deliver a Prospectus in connection with
a sale of any New Securities received by such Exchanging Dealer pursuant
to the Registered Exchange Offer in exchange for Securities acquired for
its own account as a result of market-making activities or other trading
activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B
hereto in the forepart of the Exchange Offer Registration Statement
in a section setting forth details of the Exchange Offer, and in
Annex C hereto in the underwriting or plan of distribution section
of the Prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto
in the Letter of Transmittal delivered pursuant to the Registered
Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during
the Exchange Offer Registration Period for delivery by Exchanging
Dealers in connection with sales of New Securities received
pursuant to the Registered Exchange Offer, as contemplated by
Section 4(h) below.
(f) In the event that any Initial Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold
allotment, at the request of such Initial Purchaser, the Company shall
issue and deliver to such Initial Purchaser or the party purchasing New
Securities registered under a Shelf Registration Statement as
contemplated by Section 3 hereof from such Initial Purchaser, in
exchange for such Securities, a like principal amount of New Securities.
The Company shall seek to cause the CUSIP Service Bureau to issue the
same CUSIP number for such New Securities as for New Securities issued
pursuant to the Registered Exchange Offer.
5
<PAGE>
3. SHELF REGISTRATION. If, (i) because of any change in law or
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to
effect the Registered Exchange Offer as contemplated by Section 2 hereof, or
(ii) if for any other reason the Registered Exchange Offer is not declared
effective within 180 days following the date of original issuance of the
Securities, or (iii) if any Initial Purchaser so requests with respect to
Securities held by it constituting any portion of an allotment remaining
unsold after 30 days following the date hereof, or (iv) in the case of any
Initial Purchaser that participates in the Registered Exchange Offer or
acquires New Securities pursuant to Section 2(f) hereof, such Initial
Purchaser does not receive freely tradeable New Securities in exchange for
Securities constituting any portion of an unsold allotment (it being
understood that, for purposes of this Section 3, (x) the requirement that an
Initial Purchaser deliver a Prospectus containing the information required by
Items 507 and/or 508 of Regulation S-K under the Act in connection with sales
of New Securities acquired in exchange for such Securities shall result in
such New Securities being not "freely tradeable" but (y) the requirement that
an Exchanging Dealer deliver a Prospectus in connection with sales of New
Securities acquired in the Registered Exchange Offer in exchange for
Securities acquired as a result of market-making activities or other trading
activities shall not result in such New Securities being not "freely
tradeable"), the following provisions shall apply:
(a) The Company shall, at its cost, as promptly as practicable, file
with the Commission and thereafter shall use its best efforts to cause
to be declared effective by the 210th day after the original date of
issuance of the Securities under the Act a Shelf Registration Statement
relating to the offer and sale of the Securities or the New Securities,
as applicable, by the Holders from time to time in accordance with the
methods of distribution set forth in such Shelf Registration Statement
and Rule 415 under the Act; provided that with respect to New Securities
received by an Initial Purchaser in exchange for Securities constituting
any portion of an unsold allotment, the Company may, if permitted by
current interpretations by the Commission's staff, file a post-effective
amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this paragraph (a)
with respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and governed
by the provisions herein applicable to, a Shelf Registration Statement;
PROVIDED, FURTHER, that no Holder (other than an Initial Purchaser)
shall be entitled to have the Securities held by it covered by such
Shelf Registration Statement unless such Holder agrees in writing to be
bound by all the provisions of this Agreement applicable to such Holder
as provided in a written notice and questionnaire delivered to all
Holders (including the Initial Purchasers) notifying such Holders that a
Shelf Registration Statement will be filed by the Company, requesting
such information with respect to the Holders as required to be disclosed
by the Shelf Registration Statement and setting forth a deadline for
response therein (which in no event shall be less than 30 calendar days).
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to
6
<PAGE>
be lawfully delivered by Holders until the earliest of (x) the second
anniversary of the date of original issuance of the Securities (or the
first anniversary of the effective date if such Shelf Registration
Statement is filed at the request of the Initial Purchasers), (y) the
time when the Securities registered thereunder can be sold by
non-affiliates pursuant to Rule 144 under the Securities Act without
limitation under clauses (c), (e), (f) and (h) of Rule 144, or (z) such
time as all the Securities registered thereunder have been sold (in any
such case, such period being called the "Shelf Registration Period").
During any consecutive 365-day period, the Company will have the ability
to suspend the availability of the Shelf Registration Statement for up
to two periods of up to 45 consecutive days, but no more than an
aggregate of 60 days during any 365-day period. The Company shall be
deemed not to have used its best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes
any action that would result in Holders of Securities covered thereby
not being able to offer and sell such Securities during that period,
unless (i) such action is required by applicable law, or (ii) upon the
occurrence of any event contemplated by paragraph 4(c)(2)(iii) below,
such action is taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations
hereunder), so long as the Company promptly thereafter complies with the
requirements of Section 4(k) hereof, if applicable, if the Company has
determined in good faith that there are no material legal or commercial
impediments in so doing.
4. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of any Shelf Registration
Statement and any Exchange Offer Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein, (ii) in the event that an Initial Purchaser
(with respect to any portion of an unsold allotment from the original
offering) is participating in the Registration Statement, use its best
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchasers reasonably may
propose and (iii) include the names of the Holders who propose to sell
Securities pursuant to the Shelf Registration Statement, as selling
securityholders.
(b) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall ensure that (other than with respect to
information required to be supplied by the selling Holders pursuant to
this Agreement) (i) any Registration Statement and any amendment thereto
and any Prospectus forming part thereof and any amendment or supplement
thereto complies in all material respects with the applicable
requirements of the Act and the rules and regulations of the Commission
thereunder, (ii) any Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part
7
<PAGE>
of any Registration Statement, and any amendment or supplement to such
Prospectus, does not contain, as of the date of such prospectus or
amendment or supplement, any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c)(1) The Company shall advise the Initial Purchasers in writing
and, in the case of a Shelf Registration Statement, the Holders of
Securities covered thereby:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall advise the Initial Purchasers in writing and, in
the case of a Shelf Registration Statement, the Holders of Securities covered
thereby, and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Company a telephone or
facsimile number and address for notices:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the happening of any event that requires the Company to
make any changes in the Registration Statement or the Prospectus so
that, as of such date, the statements therein do not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which
written notice shall be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been
made and which need not provide any detail as to the nature of such
event).
(d) The Company shall use reasonable commercial efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time.
8
<PAGE>
(e) The Company shall furnish to each Holder of Securities included
within the coverage of any Shelf Registration Statement, without charge,
one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if
the Holder so requests in writing, all exhibits thereto (other than
those, if any, incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Company consents, subject to the
provisions of this Agreement, to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Securities in connection with the offering and sale of the Securities
covered by the Prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, any documents incorporated
by reference therein, and, if the Exchanging Dealer so requests in
writing, all exhibits thereto (other than those, if any, incorporated by
reference).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many
copies of the Prospectus included in such Exchange Offer Registration
Statement and any amendment or supplement thereto as such Exchanging
Dealer may reasonably request for delivery by such Exchanging Dealer in
connection with a sale of New Securities received by it pursuant to the
Registered Exchange Offer; and the Company consents to the use of the
Prospectus or any amendment or supplement thereto by any such Exchanging
Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering of
Securities pursuant to any Registration Statement, the Company shall
register or qualify or cooperate with the Holders of the Securities
included therein and their respective counsel in connection with the
registration or qualification of such Securities for offer and sale
under the securities or blue sky laws of such states of the United
States as any such Holders reasonably request in writing and do any and
all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities covered by such
Registration Statement; PROVIDED, HOWEVER, that the Company will not be
required to qualify generally to do business in any jurisdiction where
it is not then so qualified or to take any action which would subject it
to general service of process or to taxation in any such jurisdiction
where it is not then so subject.
9
<PAGE>
(j) The Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates
representing Securities to be sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request prior to sales of
Securities pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraph (c)
above during the period for which the Company is required to maintain an
effective Registration Statement, the Company shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment
or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Company notifies the Initial Purchasers or the Holders in accordance
with paragraphs (i) through (iii) of Section 4(c)(2) above to suspend
the use of the Prospectus until the requisite changes to the Prospectus
have been made, then the Initial Purchasers and the Holders shall
suspend use of such prospectus.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Securities or New Securities, as the case may be, registered under such
Registration Statement, and provide the applicable trustee with printed
certificates for such Securities or New Securities, in a form eligible
for deposit with The Depository Trust Company.
(m) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registration Statement and will make generally available to its security
holders (or otherwise provide in accordance with Section 11(a) of the
Securities Act) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act, no later than 45 days after the end
of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statement shall cover such 12-month period.
(n) The Company shall cause the Indenture or the New Securities
Indenture, as the case may be, to be qualified under the Trust Indenture
Act in a timely manner, containing such changes, if any, as shall be
necessary for such qualification. In the event that such qualification
would require the appointment of a new trustee under the Indenture, the
Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.
(o) The Company may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company
such information regarding the
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<PAGE>
Holder and the distribution of such Securities as the Company may from
time to time reasonably require for inclusion in such Registration
Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information as the Majority Holders
reasonably agree should be included therein and shall make all required
filings of such Prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company
shall enter into such agreements and shall use reasonable commercial
efforts to take all other steps in order to expedite or facilitate the
registration or the disposition of the Securities.
(r) In the case of any Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by the Holders of the
Securities to be registered thereunder, and any attorney, accountant or
other agent retained by the Holders, all relevant financial and other
records, pertinent corporate documents and properties of the Company;
and (ii) cause the Company's officers, directors, employees, accountants
and auditors to supply all relevant information reasonably requested by
the Holders or any such attorney, accountant or agent in connection with
any such Registration Statement, in each case as shall be reasonably
necessary to enable such persons to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided,
however, that any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such
attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality and that the
foregoing inspection and information gathering (i) shall be coordinated
on behalf of the Initial Purchasers by you and on behalf of the other
parties, by one counsel (the "Designated Counsel") designated by the
Holders of a majority in principal amount of the Securities covered by
the Registration Statement and (ii) shall not be available for any such
Holder that is a competitor of the Company.
(s) In the case of any Exchange Offer Registration Statement, the
Company shall (i) make reasonably available for inspection by the
Initial Purchasers, and any attorney, accountant or other agent retained
by the Initial Purchasers, all relevant financial and other records,
pertinent corporate documents and properties of the Company; and (ii)
cause the Company's officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the
Initial Purchasers or any such attorney, accountant or agent in
connection with any such Registration Statement, in each case as shall
be
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<PAGE>
reasonably necessary to enable such persons to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
PROVIDED, HOWEVER, that any information that is designated in writing by
the Company, in good faith, as confidential at the time of delivery of
such information shall be kept confidential by the Initial Purchasers or
any such attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality and that the
foregoing inspection and information gathering (i) shall be coordinated
on behalf of the Initial Purchasers by you and on behalf of the other
parties by one counsel (the "Designated Counsel") designated by the
Holders of a majority in principal amount of the Securities covered by
the Registration Statement and (ii) shall not be available for any such
Holder that is a competitor of the Company.
(t) The Company, if requested by the Designated Counsel, shall cause
(i) its counsel to deliver an opinion and updates thereof relating to
the Securities in customary form addressed to such Holders, and dated,
in the case of the initial opinion, the effective date of such
Registration Statement (it being agreed that the matters to be covered
by such opinion shall include, without limitation, the due incorporation
and good standing in its jurisdiction of incorporation of the Company
and its Significant Subsidiaries (as defined in the Act); the due
authorization, execution, authentication and issuance, and the validity
and enforceability, of the applicable Securities; the absence of
material legal or governmental proceedings involving the Company and its
subsidiaries; the absence of governmental approvals required to be
obtained in connection with the Registration Statement, or the offering
and sale of the applicable Securities; the compliance as to form of such
Registration Statement and any documents incorporated by reference
therein and of the Indenture with the requirements of the Securities Act
and the Trust Indenture Act, respectively; and, as of the date of the
opinion and as of the effective date of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, to
confirm, in customary form and substance of such counsel, the absence
from such Registration Statement and the prospectus included therein (in
each case other than the financial statements and other financial
information contained therein, as to which such counsel need express no
opinion), as then amended or supplemented, and from any documents
incorporated by reference therein, of an untrue statement of a material
fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading (in the case of any such documents, in the light of the
circumstances existing at the time that such documents were filed with
the Commission under the Exchange Act), (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof
requested by the Designated Counsel and (iii) its independent public
accountants and the independent public accountants with respect to any
other entity for which financial information is provided in the
Registration Statement to provide to the selling Holders of the
applicable Securities a comfort letter in customary form and covering
matters of the type customarily covered in comfort letters in connection
with primary underwritten offerings, subject to receipt of
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<PAGE>
appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
(v) The Company will use its best efforts to continue to have the
Securities rated by the rating agencies that rated the Securities in
connection with the sale to the Initial Purchasers and, at the request
of any Holder, confirm to such Holder the current rating of the
Securities at the time of such request.
(w) The Company shall use reasonable commercial efforts to take all
other steps necessary to effect the registration of the Securities
covered by the Registration Statement contemplated hereby.
5. REGISTRATION EXPENSES. The Company shall bear all expenses incurred in
connection with the performance of its obligations under Sections 2, 3 and 4
hereof, whether or not the Shelf Registration Statement is filed or becomes
effective, and shall bear or reimburse the Holders of the Securities covered
by the Shelf Registration Statement for the reasonable fees and disbursements
of the Designated Counsel, if any, and, in the case of any Exchange Offer
Registration Statement, will reimburse the Initial Purchasers for the
reasonable fees and disbursements of the Designated Counsel, if any, acting
in connection therewith.
6. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any
Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of securities covered thereby (including each Initial Purchaser
and, with respect to any Prospectus delivery as contemplated in Section 4(h)
hereof, each Exchanging Dealer), and each person, if any, who controls any
such Holder within the meaning of either the Act or the Exchange Act (each
Holder and such controlling persons are referred to collectively as the
"Indemnified Parties") from and against any and all losses, claims, damages
or liabilities, joint or several, or any actions in respect thereof
(including but not limited to, any losses claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party becomes subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any
preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and subject to
subsection (c), reimburse, as incurred, the Indemnified Parties for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action
in respect thereof; PROVIDED, HOWEVER, that (i) the Company will not be
liable in any such case to the extent that such loss, claim, damage or
liability arises out of or is based upon (x) the use of any prospectus in
violation of the last sentence of Section 4(k), or (y) any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to the Shelf
Registration in reliance upon and in conformity with
13
<PAGE>
written information pertaining to such Holder and furnished to the Company by
or on behalf of such Holder specifically for inclusion therein and (ii) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus relating to the Registration
Statement, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Holder from whom the person asserting any such
losses, claims, damages or liabilities purchased the Securities concerned, to
the extent that a prospectus relating to such Securities was required to be
delivered by such Holder under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a
copy of the final prospectus if the Company had previously furnished copies
thereof in sufficient quantity to such Holder; PROVIDED FURTHER, HOWEVER,
that this indemnity agreement will be in addition to any liability which the
Company may otherwise have to such Indemnified Party.
(b) Each Holder of Securities covered by a Shelf Registration Statement
severally and not jointly, will indemnify and hold harmless the Company and
each person who controls the Company within the meaning of either the Act or
the Exchange Act to the same extent as the foregoing indemnity from the
Company to each such Holder, but only with reference to written information
relating to such Holder furnished to the Company by or on behalf of such
Holder specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party will not,
in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
subsections (a) or (b) above. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party if the representation of both such
parties by the same counsel would constitute a conflict of interest),
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof the indemnifying party
will not be liable to such indemnified party under this Section 6 for
any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless
14
<PAGE>
such settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action.
(d) In the event that the indemnity provided in (a) or (b) of this
Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying
party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsections
(a) or (b) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company from the offering and sale of
the Securities, on the one hand, and a Holder with respect to the sale
by such Holder of Securities or New Securities, on the other hand;
PROVIDED, HOWEVER, that in no case shall any Initial Purchaser or any
subsequent Holder of any Security or New Security be responsible, in the
aggregate, for any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities
pursuant to the Shelf Registration Statement exceeds the amount of
damages which such Holders have otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault
of such indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information provided by the indemnifying party, on the one hand or by
the indemnified party, on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred
to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 6, each person, if any, who controls such Indemnified Party
within the meaning of either the Act or the Exchange Act shall have the
same rights to contribution as such indemnified party, and each person,
if any, who controls the Company within the meaning of either the Act or
the Exchange Act shall have the same rights to contribution as the
Company.
(e) The agreements contained in this Section 6 will survive the sale
by a Holder of Securities covered by a Registration Statement and shall
remain in full force and effect,
15
<PAGE>
regardless of any termination or cancelation of this Agreement or any
investigation made by or on behalf of any indemnified party.
7. RULES 144 AND 144A. The Company shall use its best efforts to file
the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Securities, make publicly available other information so long as necessary to
permit sales of their Securities pursuant to Rules 144 and 144A. The Company
covenants that, if in the event the Company is no longer subject to Sections
13 or 15(d) of the Exchange Act, it will take such further action as any
Holder of Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The
Company will provide a copy of this Agreement to prospective purchasers of
Securities identified to the Company by the Initial Purchasers upon request.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its Securities pursuant to the
Exchange Act.
8. ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES. (a) Interest in
addition to the stated interest (the "Additional Interest") with respect to the
Securities shall be assessed as follows if any of the following events occur
(each such event in clauses (i) through (iii) below being herein called a
"Registration Default"):
(i) by the 150th day following the date of original issuance
of the Securities, the Exchange Offer Registration Statement is not
filed with the Commission;
(ii) by the 180th day following the date of original issuance
of the Securities, neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offer is not
permitted as described above) the Shelf Registration Statement is
filed with the Commission; or
(iii) by the 210th day following the date of original issuance
of the Securities, the Exchange Offer is not consummated or the
Shelf Registration Statement is not declared effective with respect
thereto,
Additional Interest shall accrue on the Securities over and above the
interest set forth in the title of the Securities from and including the date
on which any such Registration Default shall occur, to but excluding the date
on which all such Registration Defaults have been cured, at a rate of 0.25%
per annum of the principal amount of such Securities for each Registration
Default.
(b) The aggregate amount of Additional Interest payable pursuant to the
above provisions will in no event exceed 0.25% per annum of the principal
amount of the Securities which, except as otherwise provided herein, shall be
the sole and exclusive remedy for such
16
<PAGE>
Registration Default. Upon (x) the filing of the Exchange Offer Registration
Statement after the 150-day period described in clause (i) of subsection (a),
(y) the effectiveness of the Exchange Offer Registration Statement or the
filing of the Shelf Registration Statement after the 180-day period described
in clause (ii) of subsection (a) or (z) the consummation of the Exchange
Offer for such Securities or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 210-day period described in clause
(iii) of subsection (a), the Additional Interest payable on such Securities
as a result of the applicable Registration Default will cease to accrue. For
purposes of the preceding sentence, the curing of a Registration Default by
the means described in clause (y) of this subsection shall constitute a cure
of the Registration Defaults described in clauses (i) and (ii) of subsection
(a), and the curing of a Registration Default by the means described in
clause (z) of this subsection shall constitute a cure of the Registration
Defaults described in clauses (i), (ii) and (iii) of subsection (a).
(c) In the event that a Shelf Registration Statement is declared
effective, if the Company fails to keep such Registration Statement
continuously effective (except as permitted under Section 3(b)) for the Shelf
Registration Period, then from such time as the Shelf Registration Statement
is no longer effective until the earlier of
(i) the date that the Shelf Registration Statement is again
deemed effective and
(ii) the date that is the earliest of (x) the second anniversary
of the date of original issuance of the Securities (or until the
first anniversary of the effective date if the Shelf Registration
Statement is filed at the request of the Initial Purchasers), (y)
the time when the Securities registered thereunder can be sold by
non-affiliates pursuant to Rule 144 under the Securities Act
without any limitation under clauses (c), (e), (f) and (h) of Rule
144, or (z) the date as of which all such Securities are sold
pursuant to the Shelf Registration Statement,
Additional Interest shall accrue at a rate per annum equal to 0.25% of the
principal amount of the Securities which, except as otherwise provided herein,
shall be the sole and exclusive remedy for such Registration Default.
(d) Any amounts of Additional Interest due pursuant to clause (a)(i),
(a)(ii), (a)(iii) or (c) of this Section 8 will be payable in cash
semiannually in arrears on the regular interest payment dates with respect to
the Securities. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount
of the Securities, multiplied by a fraction, the numerator of which is the
number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
17
<PAGE>
(e) Notwithstanding anything to the contrary contained in this
Agreement, it is hereby acknowledged and agreed that the Company will
have no other liabilities for monetary damages to the Initial Purchasers
or any Holder for any breaches, failures to comply or violations by it
of Sections 3 and 4 hereof; provided, however, that in the event the
Company breaches, fails to comply with or violates certain provisions of
this Agreement, the holders shall be entitled to, and the Company shall
not oppose the granting of, equitable relief, including injunction and
specific performance.
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof,
enter into, any agreement with respect to its Securities that is
inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the Holders of at least a
majority of the then outstanding aggregate principal amount of
Securities (or, after the consummation of any Exchange Offer in
accordance with Section 2 hereof, of New Securities); PROVIDED that,
with respect to any matter that directly or indirectly affects the
rights of any Initial Purchaser hereunder, the Company shall obtain the
written consent of each such Initial Purchaser against which such
amendment, qualification, supplement, waiver or consent is to be
effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of
Holders whose Securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of
other Holders may be given by the Majority Holders, determined on the
basis of Securities being sold rather than registered under such
Registration Statement.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing
overnight delivery:
(i) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this Section
9(c), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture,
with a copy in like manner to Salomon Smith Barney as follows;
Salomon Smith Barney
388 Greenwich Street
18
<PAGE>
New York, New York, 10013
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Fax No.: (212) 474-3700
Attention: John W. White, Esq.
(ii) if to the Initial Purchasers, initially at the addresses set forth
above; and
(iii) if to the Company, at its address as follows:
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway
Suite 600
Oklahoma City, OK 73134
Fax No: (405) 749-6661
Attention: Chief Financial Officer
with a copy to:
Crowe & Dunlevy
1800 Mid-America Tower
20 N. Broadway
Oklahoma City, OK 73102
Fax. No: (405) 272-5238
Attention: Michael M. Stewart, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered;
three business days after being deposited in the mail, postage prepaid,
if mailed; when receipt is acknowledged by recipient's facsimile machine
operator, if sent by facsimile transmission; and on the day delivered,
if sent by overnight air courier guaranteeing next day delivery.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of
19
<PAGE>
Securities and/or New Securities. The Company hereby agrees to extend
the benefits of this Agreement to any Holder of Securities and/or New
Securities and any such Holder may specifically enforce the provisions
of this Agreement as if an original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(g) GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the internal laws of the State of New York without
regard to principles of conflicts of laws.
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired or affected thereby, it being intended
that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(i) SECURITIES HELD BY THE COMPANY, ETC. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its Affiliates (other
than subsequent Holders of Securities or New Securities if such
subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Securities or New Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of
such required percentage.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the several Initial Purchasers and the Company in accordance
with its terms.
Very truly yours,
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ Jeffrey A. Bonney
------------------------------
Name: Jeffrey A. Bonney
Title: Executive Vice President and
Chief Financial Officer
20
<PAGE>
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES, INC.
NESBITT BURNS SECURITIES INC.
By: SALOMON BROTHERS INC
By: /s/ Daniel J. Ward
---------------------
Name: Daniel J. Ward
Title: Associate
21
<PAGE>
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Securities received in exchange for Securities where such
New Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date (as defined herein) and ending on the
close of business on the 180th day following the Expiration Date, it will
make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
<PAGE>
ANNEX B
Each broker-dealer that receives New Securities for its own account in
exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Securities received
in exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on
the 180th day following the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale. In addition, until __________, 199__, all dealers
effecting transactions in the Exchange Securities may be required to deliver
a prospectus. */
The Company will not receive any proceeds from any sale of New
Securities by broker-dealers. New Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Securities
or a combination of such methods of resale, at market prices prevailing at
the time of resale, at prices related to such prevailing market prices or
negotiated prices. Any such resale may be made directly to purchasers or to
or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers
of any such New Securities. Any broker-dealer that resells New Securities
that were received by it for its own account pursuant to the Exchange Offer
and any broker or dealer that participates in a distribution of such New
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit of any such resale of New Securities and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of
Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one
counsel for the holders of the Securities) other than commissions or
concessions of any brokers or dealers and will indemnify the holders of the
Securities (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
- ---------------
* In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
<PAGE>
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
2
<PAGE>
ANNEX D
RIDER A
- - CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
------------------------------------------------
Address:
------------------------------------------------
------------------------------------------------
RIDER B
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities that were acquired
as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale
of such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
3
<PAGE>
EXHIBIT 5.1
<PAGE>
Exhibit 5.1
CROWE & DUNLEVY
A PROFESSIONAL CORPORATION
1800 MID-AMERICA TOWER
20 NORTH BROADWAY
OKLAHOMA CITY, OK 73102
405 235-7700
FAX: 405 239-6651
February 6, 1998
Louis Dreyfus Natural Gas Corp.
14000 Quail Springs Parkway, Suite 600
Oklahoma City, OK 73134
Ladies and Gentlemen:
We have acted as counsel to Louis Dreyfus Natural Gas Corp., an Oklahoma
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission of the Company's Registration
Statement on Form S-4 (the "Registration Statement") under the Securities Act
of 1933, as amended, relating to $200,000,000 principal amount of the
Company's 6 7/8% Senior Notes due 2007 (the "Exchange Notes").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Registration Statement, the
Indenture dated as of December 11, 1997, between the Company and LaSalle
National Bank, as trustee (the "Trustee"), the form of the Exchange Notes
included within Exhibit 4.1 to the Registration Statement and such corporate
records, agreements, documents and other instruments, and such certificates
or comparable documents of public officials and of officers and
representatives of the Company, and have made such inquiries of such officers
and representatives, as we have deemed relevant and necessary as a basis for
the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all
questions of fact material to this opinion that have not been independently
established, we have relied upon certificates or comparable documents of
officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that the Exchange Notes are duly authorized, and, when
duly executed on behalf of the Company, authenticated by the Trustee and
delivered in accordance with the terms of the Indenture and as contemplated
by the Registration Statement, will constitute legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity).
<PAGE>
Louis Dreyfus Natural Gas Corp.
February 6, 1998
Page 2
The opinion expressed herein is rendered solely for your benefit in
connection with the transactions described herein. This opinion may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency,
quoted, cited or otherwise referred to without our prior written consent,
except that we hereby consent to the use of this letter as an exhibit to the
Registration Statement. We further consent to the reference to our name
under the caption "Legal Matters" in the prospectus which is a part of the
Registration Statement.
Very truly yours,
CROWE & DUNLEVY,
A Professional Corporation
By: /s/ J. Bradford Hammond
----------------------------------
J. Bradford Hammond
<PAGE>
Exhibit 12.1
LOUIS DREYFUS NATURAL GAS CORP.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
For purposes of these computations, earnings consist of income before
income taxes and fixed charges less capitalized interest. Fixed charges consist
of interest expense, including amortization of debt discount and financing
costs, capitalized interest, the portion of rental expense which LDNG believes
is representative of the interest component of rental expense.
<TABLE>
PRO FORMA (1)
------------------
NINE NINE
MONTHS YEAR MONTHS
YEARS ENDED DECEMBER 31, ENDED ENDED ENDED
------------------------------------------------- SEPT. 30, DEC. 31, SEPT. 30,
1992 1993 1994 1995 1996 1997 1996 1997
--------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
EARNINGS:
Income before income taxes ............... $ 2,699 $ 3,631 $ 16,038 $ 15,739 $ 31,500 $ 34,835 $ 8,451 $ 18,740
Interest ................................. 9,939 14,364 16,856 21,736 26,822 19,031 33,976 24,868
Amortization of debt issue costs.......... 452 871 894 1,111 1,073 744 1,073 744
Interest portion of rental expense........ 176 184 293 291 307 244 843 448
--------- -------- -------- -------- -------- -------- -------- --------
$ 13,266 $ 19,050 $ 34,081 $ 38,877 $ 59,702 $ 54,854 $ 44,343 $ 44,800
--------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- --------
FIXED CHARGES:
Interest................................ $ 9,939 $ 14,364 $ 16,856 $ 21,736 $ 26,822 $ 19,031 $ 33,976 $ 24,868
Capitalized interest.................... - - - 266 431 608 967 812
Amortization of debt issue costs........ 452 871 894 1,111 1,073 744 1,073 744
Interest portion of rental expense...... 176 184 293 291 307 244 843 448
PREFERRED DIVIDEND FACTOR................. - - - - - - 2,903 2,177
--------- -------- -------- -------- -------- -------- -------- --------
$ 10,567 $ 15,419 $ 18,043 $ 23,404 $ 28,633 $ 20,627 $ 39,762 $ 29,049
--------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- --------
Ratio of earnings to combined fixed
charges and preferred stock dividends... 1.3:1 1.2:1 1.9:1 1.7:1 2.1:1 2.7:1 1.1:1 1.5:1
--------- -------- -------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- -------- -------- --------
</TABLE>
(1) - See the unaudited pro forma financial statements, including the notes
thereto, incorporated by reference in and made a part of the Registration
Statement.
<PAGE>
EXHIBIT 23.1
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 No. 333-________) and related Prospectus of
Louis Dreyfus Natural Gas Corp. for the registration of $200,000,000
principal amount of 6 7/8% Senior Notes Due 2007 and to the incorporation by
reference therein of our report dated January 31, 1997, except for the second
paragraph of Note 13, as to which the date is March 10, 1997, with respect to
the consolidated financial statements and schedule of Louis Dreyfus Natural
Gas Corp. included in its Annual Report on Form 10-K, as amended on Form
10-K/A dated March 19, 1997, for the year ended December 31, 1996, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Oklahoma City, Oklahoma
February 6, 1998
<PAGE>
EXHIBIT 23.2
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of our report dated
February 25, 1997 on the audited consolidated financial statements of
American Exploration Company and subsidiaries included in the American
Exploration Company Annual Report on Form 10-K for the year ended December 31,
1996, and to all references to our Firm included in this Registration
Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
February 6, 1998
<PAGE>
EXHIBIT 23.3
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the reference in the Registration Statement on Form
S-4 of Louis Dreyfus Natural Gas Corp. and the related Prospectus to our
report dated January 22, 1997 relating to our review of the oil and gas
reserves of Louis Dreyfus Natural Gas Corp. as of December 31, 1996. We also
consent to all references to our firm included in or made a part of such
Registration Statement and Prospectus.
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
February 5, 1998
<PAGE>
EXHIBIT 23.4
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference and use in the
Registration Statement on Form S-4 and related Prospectus of Louis Dreyfus
Natural Gas Corp. of information contained in our reserve report dated
January 29, 1997, relating to the oil and gas reserves and revenue, as of
December 31, 1996, of American Exploration Company set forth in such report.
We also consent to all references to our firm included in or made a part of
such Registration Statement and Prospectus.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By /s/ Clarence M. Netherland
-------------------------------
Clarence M. Netherland
Chairman
Dallas, Texas
February 6, 1998
<PAGE>
EXHIBIT 23.5
<PAGE>
Exhibit 23.5
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference and use in the
Registration Statement on Form S-4 and related Prospectus of Louis Dreyfus
Natural Gas Corp. of information contained in our reserve report dated
January 14, 1997, relating to the oil and gas reserves, as of December 31,
1996, of American Exploration Company set forth in such report. We also
consent to all references to our firm included in or made a part of such
Registration Statement and Prospectus.
WILLIAM M. COBB & ASSOCIATES, INC.
By /s/ Frank J. Marek
-----------------------------
Frank J. Marek, Vice President
Dallas, Texas
February 4, 1998
<PAGE>
EXHIBIT 24.1
<PAGE>
POWER OF ATTORNEY
Exhibit 24.1
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Mark E. Monroe, Kevin R. White and Jeffrey A. Bonney, and each
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign the Registration Statement on Form S-4 under
the Securities Act of 1933 of Louis Dreyfus Natural Gas Corp. relating to the
exchange of unregistered, privately placed 6 7/8% Senior Notes due 2007 for
registered notes, and any and all amendments thereto (including
post-effective amendments), and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Mark E. Monroe President, Chief Executive Officer February 2, 1998
- --------------------------- and Director (principal executive officer)
Mark E. Monroe
/s/ Richard E. Bross Executive Vice President and Director February 2, 1998
- ---------------------------
Richard E. Bross
/s/ Jeffrey A. Bonney Executive Vice President and Chief Financial Officer February 2, 1998
- --------------------------- (principal financial and accounting officer)
Jeffrey A. Bonney
/s/ Simon B. Rich, Jr. Chairman of the Board of Directors February 2, 1998
- ---------------------------
Simon B. Rich, Jr.
/s/ Mark Andrews Vice Chairman of the Board of Directors February 2, 1998
- ---------------------------
Mark Andrews
/s/ Daniel R. Finn Director February 2, 1998
- ---------------------------
Daniel R. Finn
/s/ Peter G. Gerry Director February 2, 1998
- ---------------------------
Peter G. Gerry
/s/ John J. Hogan, Jr. Director February 2, 1998
- ---------------------------
John J. Hogan, Jr.
/s/ Gerard Louis-Dreyfus Director February 2, 1998
- ---------------------------
Gerard Louis-Dreyfus
/s/ Ernest F. Steiner Director February 2, 1998
- ---------------------------
Ernest F. Steiner
</TABLE>
<PAGE>
EXHIBIT 25.1
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------
LASALLE NATIONAL BANK
(Exact name of trustee as specified in its charter)
36-0884183
(I.R.S. Employer Identification No.)
135 South LaSalle Street, Chicago, Illinois 60603
(Address of principal executive offices) (Zip Code)
-----------------------
M. ROBERT K. QUINN
Senior Vice President and General Counsel
Telephone: (312) 904-2010
135 South LaSalle Street
Chicago, Illinois 60603
(Name, address and telephone number of agent for service)
-----------------------
Louis Dreyfus Natural Gas Corp.
(Exact name of obligor as specified in its charter)
Oklahoma 73-1098614
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
14000 Quail Springs Parkway, Suite 600
Oklahoma City, Oklahoma 73134
(Address of Principal Executive Offices) (Zip Code)
-----------------------
6 7/8% Senior Notes due 2007
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
1. Comptroller of the Currency, Washington D.C.
2. Federal Deposit Insurance Corporation, Washington, D.C.
3. The Board of Governors of the Federal Reserve Systems,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the obligor is an
affiliate of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting securities of the
trustee:
Not applicable
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each other indenture.
Not applicable
(b) A brief statement of the facts relied upon as a basis for
the claim that no conflicting interest within the meaning of Section 310(b)(1)
of the Act arises as a result of the trusteeship under such other indenture,
including a statement as to how the indenture securities will rank as compared
with the securities issued under such other indenture.
We have performed our conflict of interest check and found no
conflicts.
<PAGE>
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR
OR UNDERWRITERS.
If the trustee or any of the directors or executive officers of the trustee
is a director, officer, partner, employee, appointee, or representative of
the obligor or of any underwriter for the obligor, identify each such person
having any such connection and state the nature of each such connection.
Not applicable
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner and executive
officer of the obligor.
Not applicable
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter.
Not applicable
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable
ITEM 9. SECURITIES OF THE UNDERWRITER OWNED OR HELD BY THE TRUSTEE.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor,
furnish the following information as to each class of securities of such
underwriter any of which are so owned or held by the trustee.
Not applicable
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the trustee (1) owns 10 percent or more of the voting securities of the
obligor or (2) is an affiliate, other than a subsidiary, of the obligor,
furnish the following information as to the voting securities of such person.
Not applicable
<PAGE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of
the trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such
person any of which are so owned or held by the trustee.
Not applicable
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
If the obligor is indebted to the trustee, furnish the following information.
$35,000,000 5 year revolver, in addition to OBSI and LC commitments
ITEM 13. DEFAULTS BY THE OBLIGOR.
a) State whether there is or has been a default with respect to the securities
under this indenture. Explain the nature of any such default.
Not applicable
b) If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
Not applicable
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is authorized
to act as sole trustee under indentures qualified or to be qualified.
Not applicable
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility and
qualification.
1. A copy of the Articles of Association of LaSalle National Bank
now in effect.
2. A copy of the certificate of authority to commence business.
3. A copy of the authorization to exercise corporate trust powers.
<PAGE>
4. A copy of the existing By-Laws of LaSalle National Bank.
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
8. Not applicable.
9. Not applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
LaSalle National Bank, a corporation organized and existing under the laws of
the United States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Chicago, State of Illinois, on the 27th day of
January 1998.
LASALLE NATIONAL BANK
By: /s/ D. Swanson
-------------------------------
Diane Swanson
Assistant Vice President
<PAGE>
EXHIBIT 1
ARTICLES OF ASSOCIATION
<PAGE>
ARTICLES
OF
ASSOCIATION
LA SALLE NATIONAL BANK (LOGO)
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
<PAGE>
(LOGO)
LaSalle National Bank
ARTICLES OF ASSOCIATION
FIRST. The title of this association, which shall carry on the business
of banking under the laws of the United States shall be "LaSalle National
Bank."
SECOND. The place where the main banking house or office of this
association shall be located, its operations of discount and deposit carried
on, and its general business conducted, shall be Chicago, County of Cook,
State of Illinois.
THIRD. The Board of Directors of this association shall consist of such
number of its shareholders, not less than five nor more than twenty-five, as
from time to time shall be determined by a majority of the votes to which all
of its shareholders are at the time entitled. A majority of the Board of
Directors shall be necessary to constitute a quorum for the transaction of
business. The Board of Directors, by vote of a majority of the full board,
may, between annual meetings of shareholders increase the membership of the
Board where the number of directors last elected by shareholders was 15 or
less, by not more than two members, and where the number of directors last
elected by shareholders was 16 or more, by not more than four members and by
a like vote appoint qualified persons to fill the vacancies created thereby;
provided that the number of Directors shall at no time exceed twenty-five.
FOURTH. The regular annual meeting of the shareholders of this
association shall be held at its main banking house, or other convenient
place duly authorized by the board of directors on such day of each year as
is specified therefor in the bylaws.
FIFTH. The amount of capital stock which this association is authorized
to issue shall be Twenty Million Dollars ($20,000,000.00) divided into
2,000,000 shares of common capital stock of the par value of $10.00 each; but
said capital stock may be increased or decreased from time to time, in
accordance with the provisions of the laws of the United States.
If the capital stock is increased by the sale of additional shares
thereof, other than to key officers and employees of the association upon the
exercise of options granted pursuant to the terms of a stock option plan then
in effect, as to which sales all pre-emptive rights are waived, each
shareholder shall be entitled to subscribe for such additional shares in
proportion to the number of shares of said capital stock owned by him at the
time the increase is authorized by the shareholders, unless another time
subsequent to the date of the shareholders' meeting is specified in a
resolution adopted by the shareholders at the time the increase is
authorized. The board of directors shall have the power to prescribe a
reasonable period of time within which the pre-emptive rights to subscribe to
the new shares of capital stock may be exercised.
The association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of
the shareholders.
SIXTH. The board of directors shall appoint one of its members president
of this association, who shall be chairman of the board, but the board of
directors may appoint a director in lieu of the president to be chairman of
the board, who shall perform such duties as may be designated by the board of
directors. The board of directors shall have the power to appoint one or more
vice presidents, a cashier and such other officers as may be required to
transact the business of this association; to fix the salaries to be paid to
all officers of this association; and to dismiss such officers, or any of
them.
<PAGE>
The board of directors shall have the power to define the duties of
officers and employees of this association, to require bonds from them, and
to fix the penalty thereof; to regulate the manner in which directors shall
be elected or appointed, and to appoint judges of the election; to make all
bylaws that it may be lawful for them to make for the general regulation of
the business of this association and the management of its affairs; and
generally to do and perform all acts that it may be lawful for a board of
directors to do and perform.
SEVENTH. This association shall have succession from the date of its
organization certificate until such time as it be dissolved by act of its
shareholders in accordance with the provisions of the banking laws of the
United States, or until its franchise becomes forfeited by reason of
violation of law, or until terminated by either a general or a special act of
Congress, or until its affairs be placed in the hands of a receiver and
finally wound up by him.
EIGHTH. The board of directors of this association, or any three or more
shareholders owning, in the aggregate, not less than ten per centum of the
stock of this association, may call a special meeting of shareholders at any
time: Provided, however, that, unless otherwise provided by law, not less
than ten days prior to the date fixed for any such meeting, a notice of the
time, place, and purpose of the meeting shall be given by first-class mail,
postage prepaid, to all shareholders of record of this association at their
respective addresses as shown upon the books of the association. These
articles of association may be amended at any regular or special meeting of
the shareholders by the affirmative vote of the shareholders owning at least
a majority of the stock of this association, subject to the provisions of the
banking laws of the United States. The notice of any shareholders' meeting,
at which an amendment to the articles of association of this association is
to be considered, shall be given as herein-above set forth.
NINTH. Any person, his heirs, executors, or administrators, may be
indemnified or reimbursed by the association for reasonable expenses actually
incurred in connection with any action, suit, or proceeding, civil or
criminal, to which he or they shall be made a party by reason of his being or
having been a director, officer, or employee of the association or of any
firm, corporation, or organization which he served in any such capacity at
the request of the association: Provided, however, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding as to which he shall finally be adjudged to have been guilty of or
liable for negligence or wilful misconduct in the performance of his duties
to the association: And, provided further, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit, or
proceeding which has been made the subject of a compromise settlement except
with the approval of a court of competent jurisdiction, or the holders of
record of a majority of the outstanding shares of the association, or the
board of directors, acting by vote of directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a majority
of the whole number of the directors. The foregoing right of indemnification
or reimbursement shall not be exclusive of other rights to which such person,
his heirs, executors, or administrators, may be entitled as a matter of law.
********
May 17, 1982
Form No. 181, Rev 5/17/82 GW
<PAGE>
EXHIBIT 2
CERTIFICATE OF AUTHORITY
TO COMMENCE BUSINESS
<PAGE>
STATE OF ILLINOIS
AUDITOR'S OFFICE
NO. 333 (LOGO)
NATIONAL BANK TRUST CERTIFICATE
Springfield, FEBRUARY 15th 1928
I, OSCAR NELSON, Auditor of Public Accounts of the State of Illinois, do
hereby certify that the NATIONAL BUILDERS BANK OF CHICAGO located at CHICAGO,
County of COOK and State of Illinois, a corporation organized under and by
authority of the statutes of the United States governing National Banks and
authority granted by the Federal Reserve Act for the purpose of accepting and
executing trusts, has this day deposited in this office, securities in the
sum of TWO HUNDRED THOUSAND Dollars, $200,000.00 of the character designated
by Section 6 of the Act of the Legislature of the State of Illinois entitled
"An Act to provide for and regulate the administration of trusts by trust
companies,"
The said deposit is made for the benefit of the creditors of said
NATIONAL BUILDERS BANK OF CHICAGO under and by virtue of the provisions of
the Act above referred to and the said securities are now held by me in this
office in my official capacity as such Auditor of Public Accounts, for the
uses and purposes aforesaid.
I further certify that by virtue of the Acts aforesaid, the NATIONAL
BUILDERS BANK OF CHICAGO is hereby authorized to accept and execute trusts
and receive deposits of trust funds under the provisions and limitations of
"An Act to provide for and regulate the administration of trusts in Illinois.
IN TESTIMONY WHEREOF, I hereunto subscribe my name
(SEAL) and affix the seal of my office, the day and year
first above written.
/s/ Oscar Nelson
-----------------------------------
AUDITOR OF PUBLIC ACCOUNTS.
STATE OF ILLINOIS.
<PAGE>
NO. 13146.
TREASURY DEPARTMENT (LOGO)
OFFICE OF COMPTROLLER OF THE CURRENCY
Washington, D.C., NOVEMBER 29, 1927.
WHEREAS, by satisfactory evidence presented to the undersigned, it has
been made to appear that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of
CHICAGO in the County of COOK and State of ILLINOIS has complied with all the
provisions of the Statutes of the United States, required to be complied with
before an association shall be authorized to commence the business of Banking;
NOW THEREFORE I, J.W. MCINTOSH, Comptroller of the Currency, do hereby
certify that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of CHICAGO in
the County of COOK and State of ILLINOIS is authorized to commence the
business of Banking as provided in Section Fifty one hundred and sixty nine
of the Revised Statutes of the United States.
IN TESTIMONY WHEREOF witness my hand and Seal of
(SEAL) office this TWENTY-NINTH day of NOVEMBER, 1927.
/s/ J.W. McIntosh
------------------------------------
Comptroller of the Currency
<PAGE>
CERTIFICATE OF CHANGE OF CORPORATE TITLE
(LOGO)
NO. 13146.
TREASURY DEPARTMENT
OFFICE OF THE COMPTROLLER OF THE CURRENCY
WASHINGTON, D.C., MAY 1, 1940.
WHEREAS, by satisfactory evidence presented to me, it appears that under
authority of sections 2, 3, and 4, of the Act of Congress approved May 1,
1886, entitled "An Act to enable national banking associations to increase
their capital stock and to change their names or location," shareholders
owning two-thirds of the stock of the national banking association heretofore
known as-- "NATIONAL BUILDERS BANK OF CHICAGO," located in CHICAGO, County of
COOK, State of ILLINOIS, have voted to change the name of said association
to-- "LASALLE NATIONAL BANK," and have complied with all the provisions of
the said Act relative to national banking associations changing their name.
NOW, THEREFORE, IT IS HEREBY CERTIFIED, that the name of the said
association has been changed to-- "LASALLE NATIONAL BANK," and that such
change of name is hereby approved under authority conferred by said Act.
(SEAL) IN TESTIMONY WHEREOF, witness my hand and seal of
office this FIRST day of MAY, 1940.
/s/
--------------------------------
ACTING Comptroller of the Currency.
<PAGE>
EXHIBIT 3
AUTHORIZATION TO EXERCISE
CORPORATE TRUST POWERS
<PAGE>
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM [LETTERHEAD]
WASHINGTON
May 9, 1940
LaSalle National Bank,
Chicago, Illinois.
Gentlemen:
The Board of Governors of the Federal Reserve System has been officially
advised by the Comptroller of the Currency that on May 1, 1940, National
Builders Bank of Chicago, Chicago, Illinois, changed its title to LaSalle
National Bank, and accordingly there is enclosed herewith a certificate
showing that LaSalle National Bank has authority to exercise the fiduciary
powers enumerated therein.
Kindly acknowledge receipt of this certificate.
Very truly yours,
/s/ S. R. Carpenter
------------------------------
S. R. Carpenter,
Assistant Secretary.
Enclosure
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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
I, S. R. Carpenter, Assistant Secretary of the Board of Governors of the
Federal Reserve System (formerly known as the Federal Reserve Board), do
hereby certify that it appears from the records of the Board of Governors of
the Federal Reserve System that:
(1) Pursuant to the authority vested in the Federal Reserve Board by an
Act of Congress approved December 23, 1913, known as the Federal Reserve Act,
as amended, the Federal Reserve Board on December 8, 1927, granted to
National Builders Bank of Chicago, Chicago, Illinois, the right to act, when
not in contravention of State or local law, as trustee, executor,
administrator, registrar of stocks and bonds, guardian of estates, assignee,
receiver, committee of estates of lunatics, or in any other fiduciary
capacity in which State banks, trust companies or other corporations which
come into competition with national banks are permitted to act under the laws
of the State of Illinois;
(2) Under the provisions of an Act of Congress approved May 1, 1886,
National Builders Bank of Chicago, Chicago, Illinois, on May 1, 1940, changed
its title to LaSalle National Bank; and
(3) By virtue of the foregoing, LaSalle National Bank, Chicago,
Illinois, has authority to act, when not in contravention of State or local
law, as trustee, executor, administrator, registrar of stocks and bonds,
guardian of estates, assignee, receiver, committee of estates of lunatics, or
in any other fiduciary capacity in which State banks, trust companies or
other corporations which come into competition with national banks are
permitted to act under the laws of the State of Illinois, subject to
regulations prescribed by the Board of Governors of the Federal Reserve
System.
IN WITNESS WHEREOF, I have hereunto subscribed my name and caused the
seal of the Board of Governors of the Federal Reserve System to be affixed at
the City of Washington in the District of Columbia.
/s/ S. R. Carpenter
------------------------------
Assistant Secretary.
Dated May 9, 1940
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EXHIBIT 4
BY-LAWS OF LA SALLE NATIONAL BANK
<PAGE>
BYLAWS
OF
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
LA SALLE NATIONAL BANK (LOGO)
Organized Under the National Banking Laws
of the United States
<PAGE>
BYLAWS
of the
LA SALLE NATIONAL BANK
(a National Banking Association which association
is herein referred to as the "bank")
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.1. ANNUAL MEETING. The regular annual meeting of the
shareholders for the election of directors and the transaction of whatever
other business may properly come before the meeting, shall be held at the
main office of the Bank, 135 South LaSalle Street, Chicago, Illinois, or such
other place as the Board of Directors may designate, at 9:00 A.M., on the
third Wednesday of March of each year. Notice of such meeting shall be
mailed, postage prepaid, at least ten days prior to the date thereof,
addressed to each shareholder at his address appearing on the books of the
Bank. If for any cause, an election of directors is not made on the said day,
the Board of Directors shall order the election to be held on some subsequent
day as soon thereafter as practicable, according to the provisions of law;
and notice thereof shall be given in the manner herein provided for the
annual meeting.
SECTION 1.2. SPECIAL MEETINGS. Except as otherwise specifically
provided by statute, special meetings of the shareholders may be called for
any purpose at anytime by the board of directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock
of the bank. Every such special meeting, unless otherwise provided by law,
shall be called by mailing, postage pre-paid, not less than ten days prior to
the date fixed for such meeting, to each shareholder at his address appearing
on the books of the bank, a notice stating the purpose of the meeting.
SECTION 1.3. NOMINATIONS FOR DIRECTOR. Nominations for election to the
board of directors may be made by the board of directors or by any
shareholder of any outstanding class of capital stock of the bank entitled to
vote for the election of directors. Nominations, other than those made by or
on behalf of the existing management of the bank, shall be made in writing
and shall be delivered or mailed to the president of the bank and to the
Comptroller of the Currency, Washington, D.C., not less than 14 days nor more
than 50 days prior to any meeting of shareholders called for the election of
directors, provided, however, that if less than 21 days' notice of the
meeting is given to the shareholders, such nomination shall be mailed or
delivered to the president of the bank and to the Comptroller of the Currency
not later than the close of business on the seventh day following the day on
which the notice of meeting was mailed. Such notification shall contain the
following information to the extent known to the notifying shareholder: (a)
the name and address of each proposed nominee; (b) the principal occupation
of each proposed nominee; (c) the total number of shares of capital stock of
each proposed nominee; (d) the name and address of the notifying
shareholder; and (e) the number of shares of capital stock of the bank owned
by the notifying shareholder. Nominations not made in accordance herewith,
may, in his discretion, be disregarded by the chairman of the meeting, and
upon his instructions, the vote tellers may disregard all votes cast for each
such nominee.
SECTION 1.4. JUDGES OF ELECTION. Every election of directors shall be
managed by three judges, who shall be appointed by the board of directors
prior to the time of said election. The judges of election shall hold and
conduct the election at which they are appointed to serve; and after the
election, they shall file with the cashier a certificate under their hands,
certifying the result thereof and the names of the directors elected. The
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judges of election. at the request of the chairman of the meeting, shall act
as tellers of any other vote by ballot taken at such meeting, and shall
certify the result thereof.
SECTION 1.5. PROXIES. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or
employee of this bank shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting.
Proxies shall be dated and shall be filed with the records of the meeting.
SECTION 1.6. QUORUM. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting
of shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the articles of association.
ARTICLE II
DIRECTORS
SECTION 2.1. BOARD OF DIRECTORS. The board of directors (hereinafter
referred to as the "board"), shall have power to manage and administer the
business affairs of the bank. Except as expressly limited by law, all
corporate powers of the bank shall be vested in and may be exercised by said
board.
SECTION 2.2. NUMBER. The board shall consist of not less than five or
more than twenty-five shareholders, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of
a majority of the full board or by resolution of the shareholders at any
meeting thereof; provided, however, that a majority of the full board may not
increase the number of directors by more than two if the number of directors
last elected by shareholders was fifteen or less and by not more than four
where the number of directors last elected by shareholders was sixteen or
more, provided that in no event shall the number of directors exceed
twenty-five.
SECTION 2.3. ORGANIZATION MEETING. The cashier, upon receiving the
certificate of the judges, of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required
to meet at the main office of the bank for the purpose of organizing the new
board and electing and appointing officers of the bank for the succeeding
year. Such meeting shall be appointed to be held on the day of election or as
soon thereafter as practicable, and, in any event, within thirty days
thereof. If, at the time fixed for such meeting, there shall not be a quorum
present the directors present may adjourn the meeting, from time to time,
until a quorum is obtained.
SECTION 2.4 REGULAR MEETINGS. The regular meetings of the board shall
be held, without notice, on the third Wednesday of each month at the main
office. When any regular meeting of the board falls upon a holiday, the
meeting shall be held on the next banking business day unless the board shall
designate some other day.
SECTION 2.5 SPECIAL MEETINGS. Special meetings of the board may be
called by the chairman of the board, the president, or at the request of
three or more directors. Each member of the board shall be given notice
stating the time and place, by telegram, letter or in person, of each such
special meeting.
SECTION 2.6. QUORUM. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less
number may adjourn any meeting from time to time, and the meeting may be
held, as adjourned, without further notice.
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SECTION 2.7. VACANCIES. When any vacancy occurs among the directors, the
remaining members of the board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the board, or at a special meeting called for that purpose.
SECTION 2.8. RETIREMENT POLICY. A retirement policy adopted by the
board of directors shall be applicable to directors who are not active
officers of the bank.
ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1. EXECUTIVE COMMITTEE. There shall be an executive committee
of the board. The members of the executive committee shall be chosen by the
board from time to time, shall hold office during its pleasure, and shall
consist of the chairman of the board, the chairman of the executive committee
selected by the board, who may but need not be the same person designated to
be president, and the president, ex officio, and not less than seven
additional members of the board who shall not be active officers of the bank.
It shall be the duty of this committee to exercise such powers and perform
such duties in respect to the making of loans and discounts as shall from
time to time be specified by resolution of the board. During such periods as
the board shall not be in session, the executive committee shall have and may
exercise all the powers of the board except such as are by law or by these
bylaws required to be exercised only by the board. The executive committee
may make rules for holding and conducting its meetings and keep in the minute
book of the bank a report of all action taken which shall be submitted for
approval at each regular meeting of the board and the action of the board
shall be recorded in the minutes of that meeting. A quorum of the executive
committee shall consist of not less than five of its members, at least three
of whom shall not be active officers of the bank. The chairman of the board,
or in his absence in the order named if present, the chairman of the
executive committee or the president, may designate any director who is not
an active officer of the bank, or a designated member, to serve as a member
of the executive committee at any specified meeting. Vacancies in the
executive committee at any time existing may be filled by appointment by the
board. The board may at anytime revise or change the membership and
chairmanship of the executive committee and make new or additional
appointments thereto. The chairman of the executive committee shall be ex
officio a member of all committees except the examining committee and the
trust audit committee, and shall have such other duties as may from time to
time be assigned him by the board.
SECTION 3.2. OFFICERS' COMPENSATION COMMITTEE. There shall be an
officers' compensation committee of the board. The members of the officers'
compensation committee shall consist of the members ex officio provided for
in other sections of these bylaws and not less than three additional
non-officer members of the board who shall be appointed by the board each
year at its first meeting after the directors have been elected and
qualified. It shall be the duty of this committee to study the compensation
of all officers of the bank and from time to time report their
recommendations to the board; and such other duties, if any, as may from time
to time be assigned to it by the board. A majority of the committee,
including at least two non-officer members, shall be necessary for the
committee to keep records of its action.
SECTION 3.3. EXAMINING COMMITTEE. There shall be an examining committee of
the board. The members of the examining committee shall consist of the
members ex officio provided for in other sections of these bylaws, but
exclusive of any active officer of the bank and not less than three
additional non-officer members of the board who shall be appointed by the
board each year at its first meeting after the directors have been elected
and qualified. It shall be the duty of this committee to make an examination
at least twice each year into the affairs of the bank or to cause the
examinations to be made by accountants (who may be the bank's own
accountants) responsible only to the board in such examinations, and to
report the result of such examinations in writing to the board at the next
regular meeting thereafter, or it may, at its sole discretion, submit the
reports of the national bank examiner or of the Chicago Clearing House
Association examination, with or without additional comments by the committee
itself, for, and in lieu of its personal examinations. Such reports shall
state whether
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the bank is in sound condition, whether adequate internal audit controls and
procedures are being maintained and shall recommend to the board such changes
in the manner of doing business or conducting the affairs of the bank as
shall be deemed advisable.
SECTION 3.4. OTHER COMMITTEES. The board may appoint, from time to
time, from its own members, other committees of one or more persons, for such
purposes and with such powers as the board may determine.
ARTICLE IV
OFFICERS AND EMPLOYEES
SECTION 4.1. CHAIRMAN OF THE BOARD. The board shall appoint one of its
members to be chairman of the board. The chairman of the board shall
supervise the carrying out of the policies adopted or approved by the board.
He shall have general executive powers, as well as the specific powers
conferred by these bylaws. He shall be ex officio a member of all committees,
except the examining committee and the trust audit committee. He shall have
general supervision and direction of the business, affairs and personnel of
the bank. He shall also have and may exercise such further powers and duties
as from time to time may be conferred upon, or assigned to him by the board.
SECTION 4.2. VICE CHAIRMAN OF THE BOARD. The board may appoint one of
its members to be vice chairman of the board. He shall perform such duties as
may from time to time be assigned to him by the board.
SECTION 4.3. PRESIDENT. The board shall appoint one of its members to
be president of the bank. He shall be the chief executive officer and the
chief administrative officer of the bank and in the absence of the chairman
of the board, he shall preside at any meeting of the board at which he is
present. The president shall have general executive powers, and shall have
and may exercise any and all other powers and duties pertaining by law,
regulation, or practice to the office of president, or imposed by these
bylaws. He shall be ex officio a member of all committees, except the
examining committee and trust audit committee. He shall have general
supervision of the business, affairs and personnel of the bank and in the
absence of the chairman of the board, shall exercise the powers and perform
the duties of the chairman of the board. He shall also have and may exercise
such further powers and duties as from time to time may be conferred upon or
assigned to him by the board.
SECTION 4.4. SENIOR OFFICERS. The board may appoint one or more
executive vice presidents and one or more senior vice presidents. Each such
senior officer shall have such powers and duties as may be assigned to him by
the board, the chairman of the board, or the president.
SECTION 4.5. VICE PRESIDENT. The board may appoint one or more vice
presidents. Each vice president shall have such powers and duties as may be
assigned to him by the board, the chairman of the board, or the president.
SECTION 4.6. CASHIER. The board shall appoint a cashier who shall have
such powers and duties as may be assigned to him by the board, the chairman
of the board, or the president. The cashier shall be custodian of the
corporate seal, records, documents and papers of the bank. He shall provide
for keeping of proper records of all transactions of the bank.
SECTION 4.7. SECRETARY. The board shall appoint a secretary who shall
be secretary of the bank. He shall also perform such duties as may be
assigned to him from time to time by the board. The board may
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appoint a secretary of the board who shall keep accurate minutes of all
meetings. He shall attend to the giving of all notices; he shall also perform
such other duties as may be assigned to him from time to time by the board.
SECTION 4.8. OTHER OFFICERS. The board may appoint one or more
assistant vice presidents, one or more trust officers, one or more assistant
secretaries, one or more assistant cashiers, and such other officers and
attorneys-in-fact as from time to time may appear to the board to be required
or desirable to transact the business of the bank. Such officers,
respectively, shall exercise such powers and perform such duties as pertain
to their several offices or as may be conferred upon or assigned to them by
the board the chairman of the board or the president.
SECTION 4.9. CLERKS AND AGENTS. The chairman of the board, the
president, or any other active officer of the bank authorized by the chairman
of the board, or the president, may appoint and dismiss all or any paying
tellers receiving tellers note tellers, vault custodians, bookkeepers and
other clerks, agents and employees as they may deem advisable for the prompt
and orderly transaction of the business of the bank, define their duties, fix
the salaries to be paid them and the conditions of their employment.
SECTION 4.10. RESPONSIBILITY FOR MONEYS, ETC. Each of the active
officers and clerks of this bank shall be responsible for all moneys, funds
valuables and property of every kind and description that may from time to
time be entrusted to his care or placed in his hands by the board or others,
or that otherwise may come into his possession as an active officer or clerk
of this bank.
SECTION 4.11. SURETY BONDS. All the active officers and clerks of this
bank may be covered by one of the blanket form bonds customarily written by
the surety companies, drawn for such an amount, and executed by such surety
company, as the board may from time to time require, and duly approve; or at
the discretion of the board, all such active officers and clerks shall, each
for himself, give such bond, with such security, and in such denominations as
the board may from time to time require and direct. All bonds approved by the
board shall assure the faithful and honest discharge of the respective duties
of such active officer or clerk and shall provide that such active officer or
clerk shall faithfully apply and account for all moneys, funds, valuables and
property of every kind and description that may from time to time come into
his hands or be entrusted to his care, and pay over and deliver the same to
the order of the board or to such other person or persons as may be
authorized to demand and receive the same.
SECTION 4.12. TERM OF OFFICE - OFFICER DIRECTOR. The chairman of the
board, the vice chairman of the board and the president, together with any
other active officers who may be duly elected members of the board, shall
hold their respective offices for the current year for which the board (of
which they shall be members) was elected and until their successors are
appointed, unless they shall resign, be disqualified, or be removed; and any
vacancy occurring in the office of the chairman of the board, the vice
chairman of the board, the president, or in the board, shall, if required by
these bylaws, be filled by the remaining members.
SECTION 4.13. TERM OF OFFICE - OFFICER. The executive vice presidents,
the senior vice presidents, the vice presidents, the assistant vice
presidents, the cashier, the secretary, the trust officers and all other
officers and attorneys-in-fact who are not duly elected members of the board,
shall be appointed to hold their offices, respectively, during the pleasure
of the board.
ARTICLE V
TRUST DEPARTMENT
SECTION 5.1. TRUST DEPARTMENT. There shall be a department of the bank
known as the trust department which shall perform the fiduciary
responsibilities of the bank.
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SECTION 5.2. TRUST OFFICER. There shall be a senior vice president and
trust officer, or vice president and trust officer of this bank, who shall be
designated as the managing officer of the trust department and whose duties
shall be to manage, supervise and direct all the activities of the trust
department. He shall do, or cause to be done, all things necessary or proper
in carrying on the business of the trust department in accordance with
provisions of law and regulations. He shall act pursuant to opinion of
counsel where such opinion is deemed necessary. Opinions of counsel shall be
retained on file in connection with all important matters pertaining to
fiduciary activities. The trust officer shall be responsible for all assets
and documents held by the bank in connection with fiduciary matters.
The board may appoint such other officers of the trust department as it may
deem necessary, with such duties as may be assigned to them by the board, the
chairman of the board, or the president.
SECTION 5.3. TRUST INVESTMENT COMMITTEE. There shall be appointed by
the board a trust investment committee of this bank composed of not less than
four members, including members ex officio provided for in other sections of
these bylaws, who shall be capable and experienced officers or directors of
the bank. All investments of funds held in a fiduciary capacity shall be
made, retained or disposed of only with the approval of the trust investment
committee; and the committee shall keep minutes of all its meetings, showing
the disposition of all matters considered and passed upon by it. The
committee shall, promptly after the acceptance of an account for which the
bank has investment responsibilities, review the assets thereof, to determine
the advisability of retaining or disposing of such assets. The committee
shall conduct a similar review at least once during each calendar year
thereafter and within fifteen months of the last such review. A report of all
such reviews, together with the action taken as a result thereof, shall be
noted in the minutes of the committee. Three members of the trust investment
committee shall constitute a quorum, and any action approved by a majority of
those present shall constitute the action of the committee.
SECTION 5.4. TRUST AUDIT COMMITTEE. The board shall appoint a committee
of not less than three directors, including members ex officio provided for
in other sections of these bylaws, exclusive of any active officers of the
bank, which shall at least once during each calendar year and within fifteen
months of the last such audit make suitable audits of the trust department,
or cause suitable audits to be made, by auditors responsible only to the
board, and at such time shall ascertain whether the department has been
administered in accordance with law, Regulation 9, and sound fiduciary
principles. Notwithstanding the provisions of this Section, the board at any
time may assign to the Examining Committee, in addition to the duties of the
Examining Committee set forth in Section 3.3 of these bylaws, all of the
duties of the Trust Audit Committee and during such time as the Examining
Committee is performing the duties of both committees, the Trust Audit
Committee shall cease to function as a committee of this board. The board at
any time may reassign the duties provided for in this Section to the Trust
Audit Committee.
SECTION 5.5. TRUST DEPARTMENT FILES. There shall be maintained in the
trust department, files containing all fiduciary records necessary to assure
that its fiduciary responsibilities have been properly undertaken and
discharged.
SECTION 5.6. TRUST INVESTMENTS. Funds held in a fiduciary capacity
shall be invested in accordance with the instrument establishing the
fiduciary relationship and local law. Where such instrument does not specify
the character and class of investments to be made and does not vest in the
bank a discretion in the matter, fund shield pursuant to such instrument
shall be invested in investments in which corporate fiduciaries may invest
under local law.
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ARTICLE VI
STOCK AND STOCK CERTIFICATES
SECTION 6.1. TRANSFERS. Shares of capital stock shall be transferable on
the books of the bank and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder be
such transfer shall in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
SECTION 6.2. STOCK CERTIFICATES. Certificates of capital stock shall bear
the signature of any one of, the chairman of the board, or the president
(which may be engraved, printed or impressed) and shall be signed manually or
by facsimile process by the secretary, assistant secretary, cashier,
assistant cashier, or any other officer appointed by the board for that
purpose, to be known as an authorized officer and the seal of the bank shall
be engraven thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable, properly endorsed, only on the
books of the bank.
ARTICLE VII
CORPORATE SEAL
SECTION 7.1. CORPORATE SEAL. The chairman of the board, the president,
the cashier, the secretary or any assistant cashier or assistant secretary,
or other officer thereunto designated by the board, shall have authority to
affix the corporate seal to any document requiring such seal, and to attest
the same. Such seal shall be substantially in the form set forth herein.
ARTICLE VIII
INDEMNIFYING OFFICERS AND DIRECTORS
SECTION 8.1. INDEMNIFYING OFFICERS AND DIRECTORS. Any person, his heirs,
executors or administrators, may be indemnified or reimbursed by the bank for
reasonable expenses actually incurred in connection with any action, suit or
proceeding, civil or criminal, to which he or they shall be made a party by
reason of his being or having been a director, officer or employee of the
bank or of any firm, corporation or organization which he served in any such
capacity at the request of the bank; provided, however, that no person shall
be so indemnified or reimbursed in relation to any matter in such action,
suit or proceeding as to which he shall finally be adjudged to have been
guilty of or liable for negligence or willful misconduct in the performance
of his duties to the bank; and, provided further, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit or
proceeding which has been made the subject of a compromise settlement except
with the approval of a court of competent jurisdiction, or the holders of
record of a majority of the outstanding shares of the bank, or the board,
acting by vote of directors not parties to the same or substantially the same
action suit or proceeding, constituting a majority of the whole number of the
directors. The foregoing right of indemnification or reimbursement shall not
be exclusive of other rights to which such person, his heirs, executors or
administrators, may be entitled as a matter of law.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. FISCAL YEAR. The fiscal year of the bank shall be the
calendar year.
SECTION 9.2. EXECUTION OF INSTRUMENTS. All agreements, indentures
mortgages, deeds, conveyances transfers certificates declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies and other instruments or
documents may be signed,
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executed, acknowledged, verified, delivered or accepted for the bank by the
chairman of the board, or the vice chairman of the board, or the president,
or any executive vice president, or any senior vice president, or any vice
president, or the secretary or the cashier, or, if in connection with the
exercise of fiduciary powers of the bank by any of said officers or by any
officer in the trust department. Any such instruments may also be signed,
executed, acknowledged, verified, delivered or accepted for the bank in such
other manner and by such other officers as the board may from time to time
direct. The provisions of this Section 9.2 are supplementary to any other
provisions of these bylaws.
SECTION 9.3. RECORDS. The articles of association, the bylaws, and the
proceedings of all meetings of the shareholders and of the board shall be
recorded in appropriate minute books provided for the purpose; where these
bylaws so provide, the proceedings of standing committees of the board shall
be recorded in appropriate minute books provided for the purpose.
ARTICLE X
EMERGENCIES
SECTION 10.1. CONTINUATION OF BUSINESS. In the event of a state of
emergency of sufficient severity to interfere with the conduct and management
of the affairs of this bank, the officers and employees will continue to
conduct the affairs of the bank under such guidance from the directors as may
be available except as to matters which by statute require specific approval
of the board of directors and subject to conformance with any governmental
directives during the emergency.
SECTION 10.2. DESIGNATION OF PLACE OF BUSINESS. The offices of the bank
at which its business shall be conducted shall be the main office thereof
located at 135 South LaSalle Street, Chicago, Illinois, and any other legally
authorized location which may be leased or acquired by this bank to carry on
its business. During an emergency resulting in any authorized place of
business of this bank being unable to function, the business ordinarily
conducted at such location shall be relocated elsewhere in suitable quarters,
in addition to or in lieu of the locations heretofore mentioned, as may be
designated by the board of directors or by the executive committee or by such
persons as are then, in accordance with resolutions adopted from time to time
by the board of directors dealing with the exercise of authority in the time
of such emergency, conducting the affairs of this bank. Any temporarily
relocated place of business of this bank shall be returned to its legally
authorized location as soon as practicable and such temporary place of
business shall then be discontinued.
ARTICLE XI
BYLAWS
SECTION 11.1 INSPECTION. A copy of the bylaws with all amendments
thereto, shall at all times be kept in a convenient place at the main office
of the bank and shall be open for inspection to all shareholders, during
banking hours.
SECTION 11.2 AMENDMENTS. The bylaws may be amended, altered or repealed,
at any regular meeting of the board, by a vote of a majority of the whole
number of the directors.
***
I........................................... hereby certify that I am
the................................ Cashier/Secretary of LaSalle National Bank,
Chicago, Illinois and that the foregoing is a true and correct copy of
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the bylaws of this bank as amended and that the same are in full force and
effect ............. day of...................19........
...............................
Cashier/Secretary.
December 15, 1982
(SEAL)
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EXHIBIT 5
NOT APPLICABLE
<PAGE>
EXHIBIT 6
LaSalle National Bank hereby consents in accordance with the provisions of
Section 321(b) of the Trust Indenture Act of 1939, that reports of
examinations by Federal, State, Territorial and District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
LaSalle National Bank
By: /s/ D. Swanson
-------------------------------
Diane Swanson
Assistant Vice President
<PAGE>
EXHIBIT 7
Latest Report of Condition of
Trustee published pursuant to
law or the requirement of its
surviving or examining authority
<PAGE>
LaSalle National Bank
136 South LaSalle Street
Chicago, IL 60603
Transit Number: 71000505
Consolidated Report of Condition for Insured Commercial and
State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin (1) 0081 804,023 1.a
b. Interest-bearing balances (2) 0071 634 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 962,382 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 3,463,261 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 86,026 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCFD
----
(from Schedule RC-C) 2122 10,093,581 4.a
b. LESS: Allowance for loan and lease losses 3123 191,670 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 9,901,911 4.d
5. Trading assets (from Schedule RC-D) 3545 153,080 5.
6. Premises and fixed assets (including capitalized leases) 2145 50,587 6.
7. Other real estate owned (from Schedule RC-M) 2150 3,148 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 10,561 9.
10. Intangible assets (from Schedule RC-M) 2143 20,508 10.
11. Other assets (from Schedule RC-F) 2160 265,509 11.
12. Total assets (sum of items 1 through 11) 2170 15,721,630 12.
</TABLE>
- --------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
LaSalle National Bank
136 South LaSalle Street
Chicago, IL 60603
Transit Number: 71000505
Schedule RC - Continued
<TABLE>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
RCON
a. In domestic offices (sum of totals of columns A and C from ----
Schedule RC-E, part I) 2200 7,963,782 13.a
RCON
----
(1) Noninterest-bearing(1) 6631 1,938,866 13.a.1
(2) Interest-bearing 6636 6,024,916 13.a.2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs ----
(from Schedule RC-E, part II) 2200 2,064,214 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 2,064,214 13.b.2
RCFD
14. Federal funds purchased and securities sold under agreements to ----
repurchase 2800 1,629,735 14.
RCON
----
15. a. Demand notes issued to the U.S. Treasury 2840 639,397 15.a
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548 58,051 15.b
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332 1,562,441 16.a
b. With a remaining maturity of more than one year through three A547 12,481 16.b
years
c. With a remaining maturity of more than three years A548 15,687 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 10,561 18.
19. Subordinated notes and debentures(2) 3200 396,250 19.
20. Other liabilities (from Schedule RC-G) 2930 333,248 20.
21. Total liabilities (sum of items 13 through 20) 2948 14,685,847 21.
22. Not applicable.
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 81,417 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 275,636 25.
26. a. Undivided profits and capital reserves 3632 705,611 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities 8434 36,119 26.b
27. Cumulative foreign currency translation adjustments 3284 0 27.
28. Total equity capital (sum of items 23 through 27) 3210 1,035,783 28.
29. Total liabilities and equity capital (sum of items 21 and 28) 3300 15,721,630 29.
</TABLE>
<PAGE>
MEMORANDUM
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the
number of the statement below that best
describes the most comprehensive level
of auditing work performed for the bank RCFD Number
by independent external auditors as of ---- ------
any date during 1996 6724 N/A M.1
1= Independent audit of the bank
conducted in accordance with
generally accepted auditing
standards by a certified public
accounting firm which submits a
report on the bank
2= Independent audit of the bank's
parent holding company conducted
in accordance with generally
accepted auditing standards by a
certified public accounting firm
which submits a report on the
consolidated holding company (but
not on the bank separately)
3= Directors' examination of the
bank conducted in accordance with
generally accepted auditing
standards by a certified public
accounting firm (may be required
by state chartering authority
4= Directors' examination
of bank performed by other
external auditors (may be
required by state chartering
authority)
5= Review of the bank's
financial statements by
external auditors
6= Compilation of the
bank's financial statements
by external auditors
7= Other audit procedures
(excluding tax preparation
work)
8= No external audit work
- --------------------
(1) Includes total demand deposits and
noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock
and related surplus.
<PAGE>
EXHIBIT 8
Not Applicable
<PAGE>
EXHIBIT 9
Not Applicable
<PAGE>
EXHIBIT 99.1
<PAGE>
LETTER OF TRANSMITTAL
LOUIS DREYFUS NATURAL GAS CORP.
OFFER TO EXCHANGE ITS 6-7/8% SENIOR NOTES DUE 2007, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("EXCHANGE NOTES"), FOR ANY AND
ALL OF ITS OUTSTANDING 6-7/8% SENIOR NOTES DUE 2007, WHICH HAVE NOT BEEN SO
REGISTERED ("EXISTING NOTES"), PURSUANT TO THE PROSPECTUS DATED ________, 1998.
--------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
________________, 1998 OR SUCH LATER DATE AND TIME TO WHICH THE
EXCHANGE OFFER MAY BE EXTENDED (THE "EXPIRATION DATE").
--------------
TENDERS MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE.
To:
LaSalle National Bank, Exchange Agent
BY FACSIMILE TRANSMISSION: CONFIRM BY TELEPHONE TO:
(312) 904-2236 (312) 904-2936
(For Eligible Institutions Only)
BY MAIL OR OVERNIGHT DELIVERY: BY HAND DELIVERY:
LaSalle National Bank LaSalle National Bank
Corporate Trust Division c/o IBJ Schroder Bank and Trust Company
135 South LaSalle Street One State Street - Floor SC1
Suite 1825 Securities Processing Window
Chicago, Illinois 60603 New York, New York 10004
Attention: Diane Swanson
FOR INFORMATION CALL:
(312) 904-2936
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Please read this entire Letter of Transmittal carefully before
completing any box below.
<PAGE>
List below the Existing Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate number(s)
and aggregate principal of Existing Notes should be listed on a separate
signed schedule affixed thereto.
<TABLE>
- -----------------------------------------------------------------------------------------------
DESCRIPTION OF EXISTING NOTES TENDERED
- -----------------------------------------------------------------------------------------------
(1) (2) (3) (4)
<S> <C> <C> <C> <C>
Aggregate
Principal
Amount of
Existing
Notes
Aggregate Tendered
Certificate Principal in
Name(s) and Address(es) of Number(s) Amount Aggregate Exchange for
Registered Holder(s), Exactly as of Represented Principal Certificated
Name(s) Appear(s) on Existing Notes Existing by Amount Exchange
Certificate (Please fill in if blank.) Notes* Certificate(s) Tendered** Notes***
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if Existing Notes are being tendered by
book-entry transfer in accordance with DTC's (as defined) ATOP (as
defined) procedures for transfer.
** Unless otherwise indicated in this column, the aggregate principal
amount represented by ALL Existing Notes Certificates identified in
Column (1) or delivered to the Exchange Agent shall be deemed
tendered.
*** Unless otherwise indicated, the holder will be deemed to have
tendered Existing Notes in exchange for a beneficial interest in one
or more fully registered global certificates, which will be deposited
with, or on behalf of, Depository Trust Company ("DTC") and
registered in the name of Cede & Co., its nominee.
The undersigned acknowledges that he, she or it has received and
reviewed the Prospectus, dated _____________, 1998 (the "Prospectus"), of
Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"), and
this Letter of Transmittal (the"Letter of Transmittal"), which together
constitute the Company's offer (the "Exchange Offer") to exchange its 6-7/8%
Senior Notes due 2007, which have been registered under the Securities Act
(the "Exchange Notes") for an equal principal amount of its 6-7/8% Senior Notes
due 2007 which have not been so registered (the "Existing Notes"). The
Exchange Notes and the Existing Notes are collectively referred to as the
"Notes." Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
2
<PAGE>
The undersigned has completed the appropriate boxes above and below and
signed this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer.
This Letter of Transmittal is to be used by holders of Existing Notes to
accept the Exchange Offer if: (i) tender of Existing Notes is to be made
according to the Automated Tender Offer Program ("ATOP") of Depository Trust
Company ("DTC"), for which the transaction is eligible, pursuant to the
procedures set forth in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering--Existing Notes Held Through DTC"; (ii)
certificates representing Existing Notes are to be physically delivered to
the Exchange Agent herewith by such holders, pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer--Procedures for
Tendering--Existing Notes Held by Holders"; or (iii) tender of Existing Notes
is to be made according to the guaranteed delivery procedures set forth in
the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures."
NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE
EXCHANGE OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A "DTC PARTICIPANT")
TENDERING EXISTING NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN
AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE.
ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE
TO DTC THROUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE,
EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND
AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING
THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS
LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE COMPANY WILL
BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
DTC Participants who wish to cause their Existing Notes to be tendered,
but who cannot transmit their acceptances through ATOP prior to the
Expiration Date, may effect a tender in accordance with the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Guaranteed Delivery Procedures--Existing Notes Held Through
DTC." Holders who wish to tender their Existing Notes but (i) whose Existing
Notes are not immediately available and will not be available for tendering
prior to the Expiration Date, or (ii) who cannot deliver their Existing
Notes, the Letter of Transmittal, or any other required documents to the
Exchange Agent prior to the Expiration Date, may effect a tender in
accordance with the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures--Existing Notes Held by Holders."
The undersigned must complete the appropriate boxes above and below and
sign this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer.
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED TO THE EXCHANGE
AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE NOTES.
Unless the undersigned (i) has completed Item (4) in the box
entitled"Description of Existing Notes Tendered" and (ii) has checked the box
above, the undersigned will be deemed to have tendered Existing Notes in
exchange for a beneficial interest in one or more fully registered global
certificates, which will be deposited with, or on behalf of, DTC and
registered in the name of Cede & Co., its nominee. Beneficial interests in
such registered global certificates will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its
participants. See "Description of Exchange Notes--Book-Entry; Delivery and
Form" as set forth in the Prospectus.
3
<PAGE>
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
-------------------------------------------------
The Depository Trust Company Account Number
-------------------------------------------------
Transaction Code Number
-------------------------------------------------
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED EXISTING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s):
-------------------------------------------------
Window Ticket Number (if any):
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
Name of Eligible Institution that Guaranteed Delivery:
----------------------------
If delivered by book-entry transfer:
Account Number Transaction Code Number
-------------------- --------------------
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
----------------------------------------------------------------------
Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the Existing Notes indicated above.
Subject to, and effective upon, the acceptance for exchange of the Existing
Notes tendered hereby, the undersigned hereby sells, assigns and transfers
to, or upon the order of, the Exchange Agent, as agent of the Company, all
right, title and interest in and to such Existing Notes as are being tendered
hereby, and irrevocably constitutes and appoints the Exchange Agent as the
agent and attorney-in-fact of the undersigned to cause the Existing Notes
tendered hereby to be transferred and exchanged.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the
Existing Notes tendered hereby and to acquire the Exchange Notes issuable
upon the Exchange of such tendered Existing Notes, and that the Exchange
Agent, as agent of the Company, will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim when the same are accepted by the
Exchange Agent, as agent of the Company. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Company or the
Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment and transfer of the Existing Notes tendered hereby.
The undersigned also acknowledges that this Exchange Offer is being made
in reliance on the interpretation of the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in "Exxon Capital Holdings Corporation"
(available May 13, 1988) and similar no-action letters issued to third
parties. Based on such interpretation of the staff of the SEC set forth in
such no-action letters, the Company believes that the Exchange Notes issued
in exchange for the Existing Notes pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by a holder thereof
(other than (i) a broker-dealer who purchases such Exchange Notes from the
Company to resell pursuant to Rule144A or any other available exemption under
the Securities Act, or (ii) a person that is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act of 1933, as amended
(the "Securities Act")) without compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that (i)
such Exchange Notes are acquired in the ordinary course of such holder's
business, (ii) at the time of the commencement of the Exchange Offer such
holder has no arrangement with any person to participate in a distribution of
the Exchange Notes, and (iii) such holder is not engaged in, and does not
intend to engage in, a distribution of the Exchange Notes. However, the SEC
has not considered the Exchange Offer in the context of a no-action letter
and there can be no assurance that the Staff of the SEC would make a similar
determination with respect to the Exchange Offer as in other circumstances.
By tendering Existing Notes in exchange for Exchange Notes, each holder will
represent to the Company that: (i) it is not such an affiliate of the
Company,(ii) any Exchange Notes to be received by it will be acquired in the
ordinary course of business, and (iii) at the time of the commencement of the
Exchange Offer it had no arrangement with any person to participate in a
distribution of the Exchange Notes.
If the undersigned is not a broker-dealer or is a broker-dealer but will
not receive Exchange Notes for its own account in exchange for Existing
Notes, the undersigned represents that it is not engaged in, and does not
intend to engage in, a distribution of Exchange Notes. If the undersigned is
a broker-dealer that will receive Exchange Notes for its own account in
exchange for Existing Notes, where such Existing Notes were acquired as a
result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an"underwriter" within the meaning of
the Securities Act. Nevertheless, a broker-dealer may be deemed to be an
"underwriter" under the Securities Act notwithstanding such disclaimer. The
SEC has taken the position that such broker-dealers may fulfill their
prospectus delivery requirements with respect to the Exchange Notes (other
than a resale of Exchange Notes received in exchange for an unsold allotment
from the original sale of the Existing Notes) with the Prospectus. The
Prospectus, as it may be amended or supplemented from time to time, may be
used by such broker-dealers for a period of time, starting on the Expiration
Date and ending on the close of business 180 days after the Expiration Date.
The Company has agreed that for such period of time, it will make the
Prospectus (as it maybe amended or supplemented) available to each
broker-dealer which exchanges Existing
5
<PAGE>
Notes acquired for its own account as a result of market-making activities
or other trading activities for Exchange Notes pursuant to the Exchange Offer
(each a "Participating Broker-Dealer") for use in connection with any resale
of such Exchange Notes. By acceptance of the Exchange Offer, each
broker-dealer that receives Exchange Notes pursuant to the Exchange Offer
hereby acknowledges and agrees to notify the Company prior to using the
Prospectus in connection with the sale or transfer of Exchange Notes and
that, upon receipt of notice from the Company of the happening of any event
which makes any statement in the Prospectus untrue in any material respect or
which requires the making of any changes in the Prospectus in order to make
the statements therein not misleading, such broker-dealer will suspend use of
the Prospectus until (i) the Company has amended or supplemented the
Prospectus to correct such misstatement or omission and (ii) either the
Company has furnished copies of the amended or supplemented Prospectus to
such broker-dealer or, if the Company has not otherwise agreed to furnish
such copies and declines to do so after such broker-dealer so requests, such
broker-dealer has obtained a copy of such amended or supplemented Prospectus
as filed with the SEC. The Company agrees to deliver such notice and such
amended or supplemented Prospectus promptly to any Participating
Broker-Dealer that has so notified the Company. Except as described above,
the Prospectus may not be used for or in connection with an offer to resell,
a resale or any other retransfer of Exchange Notes.
The undersigned represents that (i) the Exchange Notes acquired pursuant
to the Exchange Offer are being obtained in the ordinary course of such
holder's business, (ii) such holder is not participating and has no
arrangements with any person to participate in the distribution of such
Exchange Notes or, if such holder intends to participate in the Exchange
Offer for the purpose of distributing the Exchange Notes, such holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, and (iii) (x) such holder is not (a)
a broker-dealer that will receive Exchange Notes for its own account in
exchange for Existing Notes that were acquired as a result of market-making
activities or other trading activities, or (b) an "affiliate," as defined in
Rule 405 under the Securities Act, of the Company or (y) if such holder is
such a broker-dealer or an affiliate, such holder will comply with the
registration and prospectus delivery requirements of the Securities Act to
the extent applicable.
All authority conferred or agreed to be conferred in this Letter of
Transmittal and every obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators,
trustees in bankruptcy and legal representatives of the undersigned and shall
not be affected by, and shall survive, the death or incapacity of the
undersigned. This tender may be withdrawn only in accordance with the
procedures set forth in the instructions contained in this Letter of
Transmittal.
The undersigned understands that tenders of the Existing Notes pursuant
to any one of the procedures described under "The Exchange Offer--Procedures
for Tendering" in the Prospectus and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company in
accordance with the terms and subject to the conditions of the Exchange Offer.
The undersigned understands that if its Existing Notes are accepted for
exchange, interest on the Exchange Notes will accumulate from the last
interest payment date on which interest was paid on the Existing Notes
surrendered in exchange therefor, or if no interest has been paid, from the
original date of issuance of the Existing Notes.
The undersigned recognizes that unless the holder of Existing Notes (i)
completes Item (4) of the box entitled "Description of Existing Notes
Tendered"above and (ii) checks the box entitled "Check Here If Tendered
Shares of Existing Notes Are Being Delivered to the Exchange Agent in
Exchange for Certificated Exchange Notes" above, such holder, when tendering
such Existing Notes, will be deemed to have tendered such Existing Notes in
exchange for a beneficial interest in one or more fully registered global
certificates, which will be deposited with, or on behalf of, DTC and
registered in the name of Cede & Co., its nominee. Beneficial interests in
such registered global certificates will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its
participants. See "Description of Exchange Notes--Book-Entry; Delivery and
Form" in the Prospectus. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus under "The Exchange
Offer--Conditions," the Company may not be required to accept for exchange
any of the Existing Notes tendered. Existing Notes not accepted for exchange
or withdrawn will be returned to the undersigned at the address set forth
below unless otherwise indicated under "Special Delivery Instructions" below.
All questions as to the validity, form, eligibility (including time of
6
<PAGE>
receipt) and acceptability of any tender will be determined by the Company,
in its sole discretion, and such determination will be final and binding.
Unless waived by the Company, irregularities and defects must be cured by the
Expiration Date. The Company shall not be obligated to give notice of any
defects or irregularities in tenders and shall not incur any liability for
failure to give any such notice.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby requests that the Exchange Notes
(and, if applicable, substitute certificates representing Existing Notes for
any Existing Notes not exchanged) be issued in the name of the undersigned.
Similarly, unless otherwise indicated under the box entitled "Special
Delivery Instructions" below, the undersigned hereby requests that the
Exchange Notes (and, if applicable, substitute certificates representing
Existing Notes for any Existing Notes not exchanged) be sent to the
undersigned at the address shown above in the box entitled "Description of
Existing Notes Tendered."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF EXISTING
NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE EXISTING NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE.
7
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
X Date:
--------------------------------- ---------------------------------
X Date:
--------------------------------- ---------------------------------
Signature(s) of Owner(s)
Area Code and Telephone Number:
---------------------------------------------
If a holder is tendering any Existing Notes, this Letter of Transmittal must
be signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Existing Notes or by any person(s) authorized to
become registered holder(s) by endorsements and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
officer or other person acting in a fiduciary or representative capacity,
please set forth full title below. See Instruction 3.
Name(s):
-------------------------------------------------------------------
(Please Type or Print)
Capacity:
-------------------------------------------------------------------
Address:
-------------------------------------------------------------------
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution:
-----------------------------------------------------
(Authorized Signature)
- ----------------------------------------------------------------------------
(Title)
- ----------------------------------------------------------------------------
(Name of Firm)
Dated:
----------------------------------------------------------------------
8
<PAGE>
- ---------------------------------------------------------
- ---------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if Exchange Notes (and, if
applicable, substitute certificates representing Existing
Notes for any Existing Notes not exchanged) are to be
issued in the name of and sent to someone other than the
person or persons whose signature(s) appear on this
Letter of Transmittal above.
ISSUE EXCHANGE NOTES TO:
Name(s):
------------------------------------------
(Please print or type)
------------------------------------------
(Please print or type)
Address:
------------------------------------------
(street and number)
------------------------------------------
(city, state and zip code)
------------------------------------------
(Tax Identification Number)
(Also complete Substitute Form W-9)
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Exchange Notes
(and, if applicable, substitute certificates
representing Existing Notes for any Existing Notes not
exchanged) are to be sent to someone other than the
person or persons whose signature(s) appear(s) on this
Letter of Letter of Transmittal above or to such person
or persons at an address other than shown in the box
entitled Description of Existing Notes Tendered on this
Letter of Transmittal above.
MAIL EXCHANGE NOTES TO:
Name(s):
------------------------------------------
(Please print or type)
------------------------------------------
(Please print or type)
Address:
------------------------------------------
(street and number)
------------------------------------------
(city, state and zip code)
- ---------------------------------------------------------
- ---------------------------------------------------------
IMPORTANT:EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A
FACSIMILE HEREOF) TOGETHER WITH CERTIFICATES REPRESENTING
EXISTING NOTES OR (B) A BOOK-ENTRY CONFIRMATION,
INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE TOGETHER WITH ALL
OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING HOLDER
MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET
FORTH HEREIN. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS
WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF
TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE
ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST
SUCH DTC PARTICIPANTS.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
9
<PAGE>
- -------------------------------------------------------------------------------
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: LOUIS DREYFUS NATURAL GAS CORP.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
Department of the Treasury
Internal Revenue Service
- -------------------------------------------------------------------------------
PART I --TAXPAYER IDENTIFICATION NUMBER
Enter your taxpayer identification number at right and certify by signing and
dating below. For most individuals, this is your social security number. If
you do not have a number, see how to obtain a "TIN" in the enclosed guidelines.
- ---------------------------------------
Social Security Number
or
- ---------------------------------------
Employer Identification No.
(If awaiting TIN write
Applied For)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PAYOR'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN") AND
CERTIFICATION
- -------------------------------------------------------------------------------
Part II --FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See enclosed guidelines)
CERTIFICATION --Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because either (a) I am exempt from
backup withholding or (b) I have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of under reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out item (2).
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION
OF THIS DOCUMENT OTHER THAN THE CERTIFICATES REQUIRED TO AVOID BACKUP
WITHHOLDING.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SIGNATURE: Date:
------------------------------ ------------------------------
- -------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE
EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER THE PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED
AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR
(B) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE
PAYER, 31% OF ALL PAYMENTS MADE TO ME ON ACCOUNT OF THE EXCHANGE NOTES SHALL
BE RETAINED UNTIL I PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE PAYER AND
THAT, IF I DO NOT PROVIDE MY TAXPAYER IDENTIFICATION NUMBER WITHIN SIXTY (60)
DAYS, SUCH RETAINED AMOUNTS SHALL BE REMITTED TO THE INTERNAL REVENUE SERVICE
AS BACKUP WITHHOLDING AND 31% OF ALL REPORTABLE PAYMENTS MADE TO ME
THEREAFTER WILL BE WITHHELD AND REMITTED TO THE INTERNAL REVENUE SERVICE
UNTIL I PROVIDE A TAXPAYER IDENTIFICATION NUMBER.
SIGNATURE: Date:
------------------------------ ------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND EXISTING NOTES;
GUARANTEED DELIVERY PROCEDURE. This Letter of Transmittal is to be completed
by holders of Existing Notes to accept the Exchange Offer if: (i) tendering
holders are not ATOP members; (ii) tendering holders are ATOP members but
choose not to use ATOP; (iii) certificates representing Existing Notes are to
be physically delivered to the Exchange Agent herewith by such holders,
pursuant to the procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering--Existing Notes Held by Holders"; or
(iv) tender of Existing Notes is to be made according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer--Guaranteed delivery Procedures." Existing Notes tendered must
be in denominations of principal amount at maturity of $1,000 or any integral
multiples thereof. NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE
TERMS OF THE EXCHANGE OFFER MAY BE EFFECTED BY A DTC PARTICIPANT TENDERING
EXISTING NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S
MESSAGE PRIOR TO THE EXPIRATION DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST
ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO DTC THROUGH ATOP, AND THEN DTC WILL
EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE
AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR
ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY
ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY
ITS TERMS AND THE COMPANY WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH
DTC PARTICIPANTS.
In order to validly tender Existing Notes pursuant to the Exchange
Offer, either (i) (A) this Letter of Transmittal, or a facsimile hereof,
together with certificates representing Existing Notes or (B) a Book-Entry
Confirmation (as defined in the Prospectus), including by means of an Agent's
Message, of the transfer into the Exchange Agent's account at DTC of all
Existing Notes delivered electronically must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time,
on the Expiration Date, together with all other required documents, or (ii)
the tendering holder must comply with the guaranteed delivery procedures set
forth below. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
If a holder or DTC Participant desires to tender Existing Notes pursuant
to the Exchange Offer and time will not permit this Letter of Transmittal,
certificates representing such Existing Notes and all other required
documents to reach the Exchange Agent, or the procedures for book-entry
transfer, including those with respect to tenders through ATOP, cannot be
completed, prior to the Expiration Date, such holder or DTC Participant, as
the case may be, must tender such Existing Notes pursuant to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The
Exchange Offer-- Procedures for Tendering--Guaranteed Delivery Procedures."
Pursuant to such procedures (i) such tender must be made by or through an
Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Company, must
be received by the Exchange Agent either by hand delivery, mail, facsimile
transmission or overnight courier, prior to the Expiration Date; and (iii)
within three NYSE trading days after the date of the execution of the Notice
of Guaranteed Delivery, (A) holders must deliver to the Exchange Agent a
properly completed and duly executed Letter of Transmittal as well as the
certificate(s) representing all tendered Existing Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal or
(B) DTC Participants must effect a Book-Entry Confirmation, including through
ATOP by means of an Agent's Message, of the transfer of such Existing Notes
into the Exchange Agent's account at DTC as set forth in the Prospectus.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE EXISTING NOTES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY
ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND
RISK OF THE TENDERING HOLDER. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed for such documents to reach the Exchange
Agent prior to the Expiration Date. Except as otherwise provided in this
Instruction 1, delivery will be deemed made only when actually received by
the Exchange Agent.
11
<PAGE>
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of this Letter of Transmittal (or a facsimile
hereof), waive any right to receive any notice of the acceptance of their
Existing Notes for exchange.
See "The Exchange Offer" in the Prospectus.
2. WITHDRAWALS. Tenders of Existing Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date. For a
withdrawal of a tender of Existing Notes to be effective, a letter, telex,
telegram or facsimile transmission notice of withdrawal must be received by
the Exchange Agent at its address set forth above prior to 5:00 p.m., New
York City time, on the Expiration Date. Any such notice of withdrawal by a
DTC Participant must contain the name and number of the DTC Participant, the
principal amount due at the stated maturity of Existing Notes to which such
withdrawal relates and the signature of the DTC Participant. Any such notice
of withdrawal by a holder of Existing Notes must (i) specify the name of the
person who tendered the Existing Notes to be withdrawn, (ii) contain a
description of the Existing Notes to be withdrawn (including the certificate
number or numbers and principal amount due at the stated maturity of such
Existing Notes) and (iii) be signed by the holder of such Existing Notes in
the same manner as the original signature on this Letter of Transmittal
(including any required signature guaranties), or be accompanied by (x)
documents of transfer in a form acceptable to the Company, in its sole
discretion and (y) a properly completed irrevocable proxy that authorized
such person to effect such revocation on behalf of such holder. Any Existing
Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Existing Notes which have
been tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender, or termination of the
Exchange Offer. Properly withdrawn Existing Notes may be retendered by
following the procedures described above at any time on or prior to 5:00
p.m., New York City time, on the Expiration Date.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is
signed by the registered holder of the Existing Notes tendered hereby, the
signature must correspond exactly with the name as written on the face of the
certificates without any change whatsoever.
If any tendered Existing Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Existing Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any Existing Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should indicate such capacity when
signing, and unless waived by the Company, proper evidence satisfactory to
the Company of their authority so to act must be submitted. The signatures
on this Letter of Transmittal or a notice of withdrawal, as the case may be,
must be guaranteed unless the Existing Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered holder of the Existing
Notes who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" in this Letter of Transmittal or (ii) for
the account of an Eligible Institution. In the event that the signatures in
this Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a
member of a registered national securities exchange or a member of the
national Association of Securities Dealers, Inc., or by a commercial bank or
trust company having an office or correspondent in the United States, or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 of the
Securities Exchange Act of 1934, as amended (each an "Eligible Institution").
If Existing Notes are registered in the name of a person other than the
signer of this Letter of Transmittal, the Existing Notes surrendered for
exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by
the Company in its sole discretion, duly executed by the registered holder
with the signature thereon guaranteed by an Eligible Institution.
12
<PAGE>
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of
Existing Notes should indicate in the applicable box the name and address to
which Exchange Notes issued pursuant to the Exchange Offer are to be issued
or sent, if different from the name or address of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the
employer identification or social security number of the person named must
also be indicated. If no such instructions are given, any Exchange Notes will
be issued in the name of, and delivered to, the name or address of the person
signing this Letter of Transmittal and any Existing Notes not accepted for
exchange will be returned to the name or address of the person signing this
Letter of Transmittal.
5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under
the federal income tax laws, payments that may be made by the Company on
account of Exchange Notes issued pursuant to the Exchange Offer may be
subject to backup withholding at the rate of 31%. In order to avoid such
backup withholding, each tendering holder should complete and sign the
Substitute Form W-9 included in this Letter of Transmittal and either (a)
provide the correct Taxpayer Identification number ("TIN") and certify, under
penalties of perjury, that the TIN provided is correct and that (i) the
holder has not been notified by the Internal Revenue Service (the "IRS") that
the holder is subject to backup withholding as a result of failure to report
all interest or dividends or (ii) the IRS has notified the holder that the
holder is no longer subject to backup withholding; or (b) provide an adequate
basis for exemption. If the tendering holder has not been issued a TIN and
has applied for one, or intends to apply for one in the near future, such
holder should write "Applied For" in the space provided for the TIN in Part I
of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign
the Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied
For" is written in Part I, the Company (or the Transfer Agent with respect to
the Exchange Notes or a broker or custodian)may still withhold 31% of the
amount of any payments made on account of the Exchange Notes until the holder
furnishes the Company or the Transfer Agent with respect to the Exchange
Notes, broker or custodian with its TIN. In general, if a holder is an
individual, the taxpayer identification number is the Social Security number
of such individual. If the Exchange Agent or the Company is not provided with
the correct TIN, the holder may be subject to a $50 penalty imposed by the
IRS. Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such holder must submit a statement (generally, IRS Form
W-8), signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Exchange Agent. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
Substitute Form W-9 if Existing Notes are registered in more than one name),
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9. Failure to complete the Substitute Form
W-9 will not, by itself, cause the Existing Notes to be deemed invalidly
tendered, but may require the Company or the Transfer Agent with respect to
the Exchange Notes, broker or custodian to withhold 31% of the amount of any
payments made on account of the Exchange Notes. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of a
person subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the transfer of Existing Notes to it or its order pursuant to
the Exchange Offer. If, however, Exchange Notes and/or substitute Existing
Notes not exchanged are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Existing
Notes tendered hereby, or if tendered Existing Notes are registered in the
name of any person other than the person signing this Letter of Transmittal,
or if a transfer tax is imposed for any reason other than the transfer of
Existing Notes to the Company or its order pursuant to the Exchange Offer,
the amount of any such transfer taxes (whether imposed on the registered
holder or any other person) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly
to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Existing Notes specified in this
Letter of Transmittal.
13
<PAGE>
7. WAIVER OF CONDITIONS. The Company reserves the absolute right to
waive satisfaction of any or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Existing Notes,
by execution of this Letter of Transmittal, shall waive any right to receive
notice of the acceptance of their Existing Notes for exchange. Neither the
Company nor any other person is obligated to give notice of defects or
irregularities in any tender, nor shall any of them incur any liability for
failure to give any such notice.
9. INADEQUATE SPACE. If the space provided herein is inadequate, the
aggregate principal amount of Existing Notes being tendered and the
certificate number or numbers (if available) should be listed on a separate
schedule attached hereto and separately signed by all parties required to
sign this Letter of Transmittal.
10. MUTILATED, LOST, STOLEN OR DESTROYED EXISTING NOTES. Any holder
whose Existing Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to
the procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent at the address and telephone number indicated above.
14
<PAGE>
LOUIS DREYFUS NATURAL GAS CORP.
All tendered Existing Notes, executed Letters of Transmittal and other
related documents should be directed to the Exchange Agent. Requests for
assistance and additional copies of the Prospectus, the Letter of Transmittal
and and other related documents should be directed to the Exchange Agent.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
LASALLE NATIONAL BANK
BY FACSIMILE:
(312) 904-2236
(For Eligible Institutions Only)
BY TELEPHONE:
(312) 904-2936
BY MAIL AND OVERNIGHT DELIVERY:
LaSalle National Bank
Corporate Trust Division
135 South LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Diane Swanson
BY HAND DELIVERY:
LaSalle National Bank
c/o IBJ Schroder Bank and Trust Company
One State Street - Floor SC1
Securities Processing Window
New York, New York 10004
15
<PAGE>
EXHIBIT 99.2
<PAGE>
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
6-7/8% SENIOR NOTES DUE 2007
OF
LOUIS DREYFUS NATURAL GAS CORP.
This form or a form substantially similar hereto must be used by a
holder of 6-7/8% Senior Notes Due 2007 (the "Existing Notes") of Louis Dreyfus
Natural Gas Corp., an Oklahoma corporation (the "Company"), that wishes to
tender Existing Notes to the Exchange Agent pursuant to the guaranteed
delivery procedures described in "The Exchange Offer--Guaranteed Delivery
Procedures" of the Prospectus dated ____________, 1998 (the "Prospectus") and
in Instruction 1 to the accompanying Letter of Transmittal. Any holder that
wishes to tender Existing Notes pursuant to such guaranteed delivery
procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration
Date of the Exchange Offer. Capitalized terms not defined herein have the
meaning ascribed to them in the Prospectus or the Letter of Transmittal.
TO: LaSalle National Bank, Exchange Agent
BY FACSIMILE TRANSMISSION: CONFIRM BY TELEPHONE TO:
(312) 904-2236 (312) 904-2936
(For Eligible Institutions Only)
BY MAIL OR OVERNIGHT DELIVERY: BY HAND DELIVERY:
LaSalle National Bank LaSalle National Bank
Corporate Trust Division c/o IBJ Schroder Bank and Trust Company
135 South LaSalle Street One State Street - Floor SC1
Suite 1825 Securities Processing Window
Chicago, Illinois 60603 New York, New York 10004
Attention: Diane Swanson
FOR INFORMATION CALL:
(312) 904-2936
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Please read the accompanying instructions carefully.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and
subject to the conditions set forth in the Prospectus and the related Letter
of Transmittal, receipt of which is hereby acknowledged, the aggregate
principal amount of Existing Notes specified below pursuant to the guaranteed
delivery procedures set forth in the Prospectus and in Instruction 1 of the
Letter of Transmittal. The undersigned hereby tenders the Existing Notes
listed below:
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------
CERTIFICATE NUMBER(S) (IF KNOWN) AGGREGATE PRINCIPAL AMOUNT
OF EXISTING NOTES OR ACCOUNT NUMBER OF EXISTING NOTES REPRESENTED AGGREGATE PRINCIPAL AMOUNT OF
AT THE BOOK-ENTRY FACILITY BY CERTIFICATE EXISTING NOTES TENDERED
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
</TABLE>
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned.
SIGN HERE
Name of Registered or Acting Holder:
-------------------------------------------
Signature(s):
------------------------------------------------------------------
Name(s) (PLEASE PRINT):
--------------------------------------------------------
Address:
-----------------------------------------------------------------------
Telephone Number:
--------------------------------------------------------------
Date:
--------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended, guarantees deposit with the Exchange Agent of the
Letter of Transmittal (or facsimile thereof), together with the Existing
Notes tendered hereby in proper form for transfer (or confirmation of the
book-entry transfers of such Existing Notes into the Exchange Agent's account
at the book-entry transfer facility described in the Prospectus under the
caption "The Exchange offer--Procedures for Tendering" and in the Letter of
Transmittal) and any other required documents, within three New York Stock
Exchange trading days after the date of execution of the Notice of Guaranteed
Delivery.
SIGN HERE
Name of Firm:
------------------------------------------------------------------
Authorized Signature:
-----------------------------------------------------------
Name (PLEASE PRINT):
-----------------------------------------------------------
- -------------------------------------------------------------------------------
Telephone Number:
---------------------------------------------------------------
Date:
--------------------------------------------------------------------------
2
<PAGE>
DO NOT SEND NOTES WITH THIS FORM. ACTUAL SURRENDER OF NOTES MUST BE MADE
(A) PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL
OR (B) IN ACCORDANCE WITH THE AUTOMATED TENDER OFFER PROGRAM OF
DEPOSITORY TRUST COMPANY.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by
the Exchange Agent at its address set forth herein prior to 5:00 p.m., New
York City time, on the Expiration Date. The method of delivery of this Notice
of Guaranteed Delivery and any other required documents to the Exchange Agent
is at the election and risk of the holder and the delivery will be deemed
made only when actually received by the Exchange Agent. If delivery is by
mail, registered or certified mail properly insured, with return receipt
requested, is recommended. In all cases sufficient time should be allowed to
assure timely delivery. For a description of the guaranteed delivery
procedure, see Instruction 1 of the Letter of Transmittal.
2. SIGNATURES ON THIS NOTICE OF GUARANTEED DELIVERY. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Existing
Notes referred to herein, the signature must correspond with the name(s)
written on the face of the Existing Notes without alteration, enlargement, or
any change whatsoever. If this Notice of Guaranteed Delivery is signed by a
participant of the book-entry transfer facility whose name appears on a
security position listing as the owner of the Existing Notes, the signature
must correspond with the name shown on the security position listing as the
owner of the Existing Notes.
If this Notice of Guaranteed Delivery is signed by a person other than
the registered holder(s) of any Existing Notes or a participant of the
book-entry transfer facility whose name appears on the Existing Notes or is
shown on the book-entry transfer facility's security position listing, as
applicable, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s)
appears on the Existing Notes or signed as the name of the participant shown
on the book-entry transfer facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should
so indicate when signing.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust
company, or other nominee for assistance concerning the Exchange Offer.
3
