<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
UNION PACIFIC RESOURCES GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
UTAH 13-2647483
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
------------------------
UPRG CAPITAL TRUST I
UPRG CAPITAL TRUST II
UPRG CAPITAL TRUST III
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
------------------------
801 CHERRY STREET
FORT WORTH, TEXAS 76102
(817) 877-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<TABLE>
<S> <C>
UNION PACIFIC RESOURCES INC. UPR CAPITAL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ALBERTA, CANADA NOVA SCOTIA, CANADA
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
98-0186874 NOT APPLICABLE
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
400, 425-1ST FIRST STREET S.W. 400, 425-1ST FIRST STREET S.W.
CALGARY, ALBERTA, CANADA T2P 4V4 CALGARY, ALBERTA, CANADA T2P 4V4
(403) 231-0111 (403) 231-0111
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES) OFFICES)
</TABLE>
------------------------
JOSEPH A. LASALA, JR.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
UNION PACIFIC RESOURCES GROUP INC.
801 CHERRY STREET
FORT WORTH, TEXAS 76102
(817) 877-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
JOHN T. GAFFNEY
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement. If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the 'Securities Act'), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box: /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /x/
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS AMOUNT TO BE MAXIMUM OFFERING OFFERING
OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(1)(2)
<S> <C> <C> <C>
Debt Securities(5)(8).......................................
Preferred Stock (without par value) of the Company(6)(8)....
Common Stock (without par value) of the Company(7)(8).......
Warrants of the Company(9)..................................
Stock Purchase Contracts(10)................................ (4) (4) (4)
Stock Purchase Units(11)....................................
Preferred Securities of UPRG Capital Trust I, UPRG Capital
Trust II and UPRG Capital Trust III (collectively, the
'UPRG Trusts')(12).........................................
Guarantees by the Company(13)...............................
Total................................................ $1,000,000,000(14) 100% $1,000,000,000(14)
<CAPTION>
AMOUNT OF
TITLE OF EACH CLASS REGISTRATION
OF SECURITIES TO BE REGISTERED FEE(3)
<S> <C>
Debt Securities(5)(8).......................................
Preferred Stock (without par value) of the Company(6)(8)....
Common Stock (without par value) of the Company(7)(8).......
Warrants of the Company(9)..................................
Stock Purchase Contracts(10)................................ (4)
Stock Purchase Units(11)....................................
Preferred Securities of UPRG Capital Trust I, UPRG Capital
Trust II and UPRG Capital Trust III (collectively, the
'UPRG Trusts')(12).........................................
Guarantees by the Company(13)...............................
Total................................................ $278,775(3)
</TABLE>
<PAGE>
(footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(footnotes from previous page)
- ------------------
(1) The proposed maximum offering price per unit will be determined from time
to time by the Registrants in connection with the issuance by the
Registrants of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457 under
the Securities Act.
(3) A filing fee aggregating $16,225 was previously paid by Union Pacific
Resources Group Inc. in connection with the Registration Statement
(Registration No. 333-52605) filed earlier relating to the registration of
in the aggregate $55,000,000 of securities of the Company, none of which
has been issued or sold. Pursuant to Rule 429, Union Pacific Resources
Group Inc. is hereby applying these previously paid fees toward the payment
of the registration fees due under this Registration Statement on Form S-3.
(4) Not applicable pursuant to General Instruction II.D. of Form S-3.
(5) Subject to note (14) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities of the Company and
non-convertible Debt Securities of the Subsidiary Issuers (as defined
herein) as may be sold, from time to time. If any Debt Securities are
issued at an original issue discount, then the offering price shall be in
such greater principal amount as shall result in an aggregate initial
offering price not to exceed $1,000,000,000.
(6) Subject to note (14) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock of the Company as may be
sold, from time to time.
(7) Subject to note (14) below, there is being registered hereunder an
indeterminate number of shares of Common Stock of the Company as may be
sold from time to time.
(8) Subject to note (14) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities, number of shares of
Preferred Stock and number of shares of Common Stock of the Company, as
shall be issuable upon conversion or redemption, or upon the exercise of
Warrants of the Company registered hereunder.
(9) Subject to note (14) below, there is being registered hereunder an
indeterminate amount and number of Warrants of the Company, representing
rights to purchase certain of the Debt Securities, Preferred Stock or
Common Stock of the Company registered hereunder.
(10) Subject to note (14) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts, representing
rights (and obligations) to purchase Common Stock or Preferred Stock of the
Company.
(11) Subject to note (14) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Units, representing
ownership of Stock Purchase Contracts and Debt Securities, debt obligations
of the United States of America or agencies or instrumentalities thereof or
Trust Preferred Securities (as defined herein).
(12) Subject to note (14) below, there is being registered hereunder an
indeterminate amount and number of Preferred Securities of the UPRG Trusts
(the 'Trust Preferred Securities') as may be sold from time to time.
(13) No separate consideration will be received for the Guarantees.
(14) In no event will the aggregate offering price of all securities issued from
time to time pursuant to this Registration Statement exceed $1,000,000,000
or the equivalent thereof in one or more foreign currencies, foreign
currency units or composite currencies. The aggregate amount of Common
Stock of the Company registered hereunder is further limited to that which
is permissible under Rule 415(a)(4) under the Securities Act. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
<PAGE>
SUBJECT TO COMPLETION DATED AUGUST 25, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED, , 1998)
[LOGO] UNION PACIFIC RESOURCES GROUP INC.
UNION PACIFIC RESOURCES INC.
GUARANTEED BY
UNION PACIFIC RESOURCES GROUP INC.
UPR CAPITAL COMPANY
GUARANTEED BY
UNION PACIFIC RESOURCES GROUP INC.
$700,000,000 MEDIUM-TERM NOTES
------------------------
Any of Union Pacific Resources Group Inc. (the 'Company'), Union Pacific
Resources Inc. ('UPRI') and UPR Capital Company ('UPR Capital Company') may
offer from time to time its Medium-Term Notes, Series A (the 'Notes'), in an
aggregate principal face amount of up to $700,000,000 (or (i) the equivalent
thereof in other currencies or currency units or (ii) such greater amount if
Notes are issued at an original issue discount, as shall result in aggregate
proceeds of $700,000,000), subject to reduction under certain circumstances as a
result of the sale of other Offered Securities (as defined in the accompanying
Prospectus). UPRI and UPR Capital Company are collectively referred to herein as
the 'Subsidiary Issuers' and the Company, in its capacity as an issuer, and the
Subsidiary Issuers are collectively referred to herein as the 'Issuers.' The
Notes will be offered at varying maturities of nine months or more from the date
of issue as selected by the purchaser and agreed to by the applicable Issuer,
and may be subject to redemption at the option of the applicable Issuer or
repayment at the option of the holder thereof prior to the Stated Maturity
thereof (as defined below). The Notes issued by the Company and the Company
Guarantees will be unsecured obligations of the Company, and will rank pari
passu with all other unsecured and unsubordinated debt of the Company. The Notes
issued by a Subsidiary Issuer will be unsecured obligations of such Subsidiary
Issuer, and will rank pari passu with all other unsecured and unsubordinated
debt of such Subsidiary Issuer. Each Note will be denominated in U.S. dollars or
in other currencies or currency units (the 'Specified Currency'), including
European Currency Units ('ECU'), as set forth in a pricing supplement (the
'Pricing Supplement') to this Prospectus Supplement. See 'Important Currency
Exchange Information' and 'Foreign Currency Risks.'
(Continued on following page)
------------------------
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 SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENT'S COMMISSION PROCEEDS TO
PUBLIC(1)(2) OR DISCOUNT(2)(3) COMPANY(1)(4)
<S> <C> <C> <C>
Per Note........................... 100% .125%-.750% 99.875%-99.250%
Total.............................. $700,000,000 $1,250,000-$7,500,000 $998,750,000-$992,500,000
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued at 100% of the principal amount thereof.
(2) Or the equivalent thereof in the Specified Currency.
(3) The applicable Issuer will pay a commission to Chase Securities Inc., Credit
Suisse First Boston Corporation, Goldman, Sachs & Co., and Salomon Smith
Barney (the 'Agents'), in the form of a discount, ranging from 0.125% to
0.750% of the principal amount of a Note, depending on its Stated Maturity,
sold through the Agents. The applicable Issuer may also sell Notes to the
Agents for resale to investors or other purchasers at varying prices related
to prevailing market prices at the time of resale to be determined by the
Agents or, if so agreed, at a fixed public offering price. Unless otherwise
specified in the applicable Pricing Supplement, any Note sold to an Agent as
principal will be purchased by such Agent at a price equal to 100% of the
principal amount thereof less a percentage equal to the commission
applicable to an agency sale of a Note of identical maturity, and may be
resold by such Agent. The applicable Issuer may also sell Notes directly to
investors on its own behalf, in which case no commission will be payable.
The applicable Issuer has agreed to indemnify the Agents against certain
civil liabilities, including liabilities under the Securities Act of 1933,
as amended.
(4) Before deducting expenses payable by the applicable Issuer estimated at
, including fees and disbursements of counsel for the Agents.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 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 PRELIMINARY PROSPECTUS SUPPLEMENT AND ACCOMPANYING PRELIMINARY
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>
(Continued from previous page)
Each Note will bear interest (i) at a fixed rate (a 'Fixed Rate Note'),
which may be zero in the case of certain Notes issued at a price representing a
substantial discount from the principal amount payable at Stated Maturity, (ii)
at a floating rate (a 'Floating Rate Note') or (iii) at a combination of fixed
and floating rates. A Fixed Rate Note may pay both interest and principal
amortized over the life of the Note (an 'Amortizing Note'). See 'Description of
Notes--Fixed Rate Notes,' 'Description of Notes--Floating Rate Notes' and
'Description of Notes--Floating/Fixed Rate Notes.' The principal amount payable
at Maturity (as defined below) and/or the interest (or premium, if any) on each
Note may be determined by reference to the relationship between two or more
currencies, to the price of one or more specified securities or commodities or
to one or more securities or commodities exchange indices or other indices or by
other similar methods (an 'Indexed Note'), as described in the applicable
Pricing Supplement. An Indexed Note whose principal amount payable at Maturity
and/or the interest rate of which is determined by reference to the relationship
between two currencies, two composite currencies or a currency and a composite
currency is referred to herein as a 'Currency Indexed Note.' See 'Description of
Notes--Currency Indexed Notes' and 'Description of Notes--Other Indexed Notes
and Certain Terms Applicable to All Indexed Notes.'
Unless otherwise specified in the applicable Pricing Supplement, the dates,
if any, on which interest will be payable for each Fixed Rate Note (other than
an Amortizing Note) will be February 15 and August 15 of each year and at
Maturity. The dates on which interest will be payable for each Floating Rate
Note will be established on the date of issue of such Note and will be set forth
in the applicable Pricing Supplement. Amortizing Notes will pay principal and
interest semi-annually each February 15 and August 15, or quarterly each
February 15, May 15, August 15 and November 15, and at Maturity, or otherwise,
as specified in the applicable Pricing Supplement. See 'Description of
Notes--Payment of Principal and Interest.' Interest rates and interest rate
formulae are subject to change by the applicable Issuer, but no change will
affect any Note already issued or as to which an offer to purchase has been
accepted by the applicable Issuer.
Each Note will be issued in fully registered form and will be represented
by either a global security (a 'Global Security') registered in the name of a
nominee of The Depository Trust Company ('DTC') or other depositary (DTC or such
other depositary as is specified in the applicable Pricing Supplement is herein
referred to as the 'Depositary'), or a certificate issued in definitive form, as
specified in the applicable Pricing Supplement. An interest in a Global Security
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary or its participants. A beneficial interest in a
Global Security will be exchanged for Notes in definitive form only under the
limited circumstances described herein. See 'Description of Notes--Book-Entry
Notes.' Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued only in registered form in minimum denominations of $1,000 and
any amount in excess thereof that is an integral multiple of $1,000 or, in the
case of Notes denominated in a Specified Currency other than U.S. dollars, the
authorized denominations set forth in the applicable Pricing Supplement. See
'Description of Notes--General.'
The Specified Currency, any applicable interest rate or formula, the Issue
Price (as defined below), the Stated Maturity, any Interest Payment Dates (as
defined below), any principal payment dates, any redemption or repayment
provisions, the extent to which such Note is a Fixed Rate Note, a Floating Rate
Note, an Amortizing Note or an Indexed Note, whether such Note will be
represented by a Global Security and any other terms applicable to each Note and
established at the time of offering will be set forth in the applicable Pricing
Supplement.
The Notes are being offered on a continuing basis by the Issuers through
the Agents, which have agreed to use reasonable efforts to solicit offers to
purchase the Notes. Each Issuer reserves the right to sell Notes directly on its
own behalf or to the Agents acting as principal for resale to investors and
other purchasers or through other agents (provided that any other agent will
execute an agreement with the applicable Issuer which contains substantially the
same terms and conditions as its agreement with the Agents). Unless otherwise
specified in an applicable Pricing Supplement, the Notes will not be listed on
any securities exchange, and there can be no assurance that the Notes offered by
this Prospectus Supplement will be sold or that there will be a secondary market
for the Notes. Each Issuer reserves the right to withdraw, cancel or modify the
offer made hereby without notice. Any Issuer or any Agent may reject any offer
in whole or in part. See 'Plan of Distribution.'
This Prospectus Supplement and the accompanying Prospectus, together with
an appropriate Pricing Supplement, may be used by the Agents, in connection with
offers and sales of the Notes in market-making transactions at negotiated prices
related to prevailing market prices at the time of sale. The Agents may act as
principal or agent in such transactions.
S-2
<PAGE>
DESCRIPTION OF NOTES
The following description of the terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the 'Debt Securities')
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth under the
heading 'Description of Debt Securities and Company Guarantees' in the
accompanying Prospectus, to which description reference is hereby made. The
following summary of the Notes is qualified in its entirety by reference thereto
and to the Indenture referred to therein. Capitalized terms not otherwise
defined in this Prospectus Supplement or the accompanying Prospectus shall have
the meanings given to them in the Indenture. The provisions of the Notes
summarized herein apply to the Notes unless otherwise specified in the
applicable Pricing Supplement and the applicable Note.
GENERAL
The Notes offered by this Prospectus Supplement are limited to $700,000,000
aggregate principal face amount (or (i) the equivalent thereof in one or more
currencies or (ii) such greater amount if Notes are issued at an original issue
discount, as shall result in aggregate proceeds of $700,000,000), subject to
reduction under certain circumstances as a result of the sale of other Offered
Securities covered by the Registration Statement of which the Prospectus
accompanying this Prospectus Supplement is a part. The Notes will be issued
under the Indenture which is described under the heading 'Description of Debt
Securities and Company Guarantees' in the accompanying Prospectus. The U.S.
dollar equivalent of Notes denominated in a currency or currency unit other than
U.S. dollars will be determined upon issuance by the Exchange Rate Agent (as
defined below), on the basis of the Market Exchange Rate (as defined below) for
such other currency on the applicable trade dates. The Notes will be subject to
defeasance and covenant defeasance as described in the accompanying Prospectus
under the heading 'Description of Debt Securities and Company
Guarantees--Defeasance.' The statements herein concerning the Notes and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, the Indenture, including the definitions therein
of certain terms. Whenever particular defined terms not otherwise defined herein
are referred to, such defined terms are incorporated herein by reference.
The Company will irrevocably and unconditionally guarantee payments of
principal, premium, if any, and interest, if any, with respect to Notes issued
by the Subsidiary Issuers.
The Notes are a series of Securities (as defined in the Indenture),
unlimited as to principal amount, established pursuant to the Indenture.
Notes will be offered on a continuing basis and will mature nine months or
more from the date of issue, as selected by the purchaser and agreed to by the
applicable Issuer, and may be subject to redemption at the option of the
applicable Issuer or repayment at the option of the holder prior to Stated
Maturity as set forth below under 'Redemption and Repayment.' Each Note will
bear interest from the Issue Date (as defined below) or from such other date as
may be specified in the applicable Pricing Supplement at (i) a fixed rate, which
may be zero in the case of a Note issued at an Issue Price representing a
substantial discount from the principal amount payable at Stated Maturity (a
'Zero-Coupon Note'), (ii) a floating rate or rates determined by reference to a
Base Rate, which may be adjusted by a Spread and/or a Spread Multiplier (each as
defined below), or (iii) a combination of fixed and floating rates.
Each Note will be issued in fully registered form without coupons and will
be represented by either a Global Security registered in the name of a nominee
of the Depositary or a certificate issued in definitive form, in each case as
specified in the applicable Pricing Supplement. All Notes issued on the same day
and having the same terms, including, but not limited to, the same designation,
Specified Currency, Interest Payment Dates, rate of interest, Stated Maturity
and redemption or repayment provisions may be represented by a single Global
Security. An interest in a Global Security will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary or
its participants. Payments of principal and interest on Notes represented by a
Global Security will be made by the applicable Issuer or its paying agent to the
Depositary or its nominee. See 'Description of Notes--Book-Entry Notes.'
S-3
<PAGE>
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes (other than Global Securities) denominated in
U.S. dollars will be $1,000 and any amount in excess thereof that is an integral
multiple of $1,000. The authorized denominations of Notes denominated in a
Specified Currency other than U.S. dollars will be as set forth in the
applicable Pricing Supplement.
The Notes issued by the Company and the Company Guarantees will be
unsecured obligations of the Company, and will rank pari passu with all other
unsecured and unsubordinated debt of the Company. The Notes issued by a
Subsidiary Issuer will be unsecured obligations of such Subsidiary Issuer, and
will rank pari passu with all other unsecured and unsubordinated debt of such
Subsidiary Issuer. The Pricing Supplement will indicate whether the Notes will
be redeemable at the option of the Issuer thereof, or repayable at the option of
the holder, or both, on or after a specified date prior to their Stated
Maturity. Unless otherwise specified in the applicable Pricing Supplement, the
Notes, other than Amortizing Notes, will not be subject to any sinking fund. See
'Description of Notes--Redemption and Repayment.'
The amount of any Discount Note (as defined below) payable in the event of
redemption by the Issuer thereof, repayment at the option of the holder or
acceleration of its Stated Maturity, in lieu of the stated principal amount due
at the Stated Maturity, shall be the Amortized Face Amount (as defined below) of
such Discount Note as of the date of such redemption, repayment or acceleration.
For the purpose of determining whether holders of the requisite amount of
Securities outstanding under the Indenture have made a demand or given a notice
or waiver or taken any other action, the outstanding principal amount will be
deemed to be the amount of the principal thereof that would be due and payable
as of the date of the taking of such action upon a declaration of the
acceleration of the Maturity thereof. A 'Discount Note' means a Note, including
any Zero-Coupon Note, issued with more than a de minimis amount of original
issue discount (as determined under United States Federal income tax rules
applicable to original issue discount instruments). The 'Amortized Face Amount'
of a Discount Note shall be the amount equal to (i) the Issue Price of such
Discount Note set forth in the applicable Pricing Supplement plus (ii) the
portion of the difference between the Issue Price and the principal amount of
such Discount Note that has accrued at the yield to maturity set forth in the
Pricing Supplement (computed in accordance with generally accepted United States
bond yield computation principles) at the date as of which the Amortized Face
Amount is calculated, but in no event shall the Amortized Face Amount of such
Discount Note exceed its stated principal amount. See 'Certain Federal Tax
Consequences--U.S. Holders--Discount Notes.'
The Pricing Supplement relating to each Note will identify the Issuer of
such Note and describe the following terms, as applicable: (1) the Specified
Currency with respect to such Note (and, if such Specified Currency is other
than U.S. dollars, certain other terms relating to such Note); (2) the extent to
which such Note is a Fixed Rate Note, an Amortizing Note, a Floating Rate Note,
a Discount Note or a Zero-Coupon Note; (3) whether such Note is a Currency
Indexed Note or other Indexed Note and, if so, the specific terms thereof; (4)
the price (expressed as a percentage of the aggregate principal amount thereof)
at which such Note will be issued (the 'Issue Price'); (5) the date on which
such Note will be issued (the 'Issue Date') and the date from which interest
shall accrue (if different from the Issue Date); (6) the date on which such Note
will mature (the 'Stated Maturity') and whether the Stated Maturity may be
extended by the Issuer thereof and, if so, the Extension Periods and the Final
Maturity Date (each as defined below); (7) if such Note is a Fixed Rate Note,
the rate per annum at which such Note will bear interest, if any (the 'Interest
Rate'), the Interest Payment Date or Dates and, if so specified in the
applicable Pricing Supplement, that such rate may be changed by the Issuer
thereof prior to the Stated Maturity and, if so, the basis or formula for such
change, if any; (8) if such Note is a Floating Rate Note, the Base Rate, the
Initial Interest Rate or formula for determining such, the Interest Reset
Period, the Interest Reset Date or Dates, the Interest Payment Date or Dates,
the Index Maturity, the Maximum Interest Rate and/or the Minimum Interest Rate,
if any, and the Spread and/or Spread Multiplier, if any (all as defined below),
and any other terms relating to the particular method of calculating the
Interest Rate for such Note and, if so specified in the applicable Pricing
Supplement, that any such Spread and/or Spread Multiplier may be changed by the
Issuer thereof prior to the Stated Maturity and, if so, the basis or formula for
such change, if any; (9) if such Note is an Amortizing Note, whether payments of
principal thereof and interest thereon will be made quarterly or semi-annually,
and the repayment information in respect thereof; (10) whether the interest rate
on such Note may be reset upon the occurrence of certain events or at the option
of the Issuer thereof; (11) whether such Note may be redeemed at the option of
the Issuer thereof, or repaid at the option of the holder, prior to the Stated
Maturity, and, if so, the provisions relating to such redemption or repayment;
(12) whether
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such Note will be represented by a Global Security or a certificate issued in
definitive form; (13) certain special Federal income tax consequences of the
purchase, ownership and disposition of certain Notes, if any; (14) whether such
Note is a Renewable Note (as defined below), and, if so, the specific terms
thereof; (15) the use of proceeds, if such use materially differs from that
disclosed in the accompanying Prospectus; and (16) any other terms of such Note
not inconsistent with the provisions of the Indenture.
PAYMENT CURRENCY
Unless otherwise specified in the applicable Pricing Supplement, and except
as otherwise described herein with respect to Currency Indexed Notes, principal
(and premium, if any) and interest, if any, on each Note will be paid by the
Issuer thereof in U.S. dollars in the manner described in the following
paragraphs, even if such Note is denominated in a Specified Currency other than
U.S. dollars; provided that, if the applicable Pricing Supplement and the Note
so indicate, the holder of a Note denominated in a Specified Currency other than
U.S. dollars may elect to receive all such payments in respect of such Note in
such Specified Currency, subject to certain conditions described in the
following paragraphs, by delivery of a written election to the applicable
Issuer's paying agent (the 'Paying Agent') in The City of New York. Except as
otherwise provided herein with respect to Global Securities, any such election
must be received by the Paying Agent on or prior to the applicable Regular
Record Date (as defined below) or at least 15 calendar days prior to Maturity,
as the case may be, and no such change of election may be made with respect to
payments on any Note with respect to which (i) an Event of Default has occurred,
(ii) the Issuer thereof has exercised any of its defeasance or covenant
defeasance options, or (iii) the Issuer thereof has given notice of redemption.
Such election shall remain in effect unless and until changed by written notice
to the Paying Agent, received on or prior to the applicable Regular Record Date
or at least 15 calendar days prior to Maturity, as the case may be. Until the
Notes are paid or payment thereof is provided for, the Issuer thereof will, at
all times, maintain a Paying Agent in The City of New York capable of performing
the duties described herein to be performed by the Paying Agent and, to the
extent permitted by the Indenture, the Issuer thereof may be the Paying Agent.
Issuers have initially appointed The Bank of New York as Paying Agent under the
Indenture. Each Issuer will notify the holders of the Notes in accordance with
the Indenture of any change in the Paying Agent or its address. Except as may
otherwise be provided in a Pricing Supplement with respect to Currency Indexed
Notes, all currency exchange costs related to a Note, if any, will be borne by
the holder of such Note by deductions from payments otherwise due such holder.
For the purpose of determining whether the holders of the requisite amount of
Securities outstanding under the Indenture have made a demand or given a notice
or waiver or taken any other action, the outstanding principal amount will be
deemed to be that amount of U.S. dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into U.S. dollars for
the Specified Currency as of the date the taking of such action by the holders
of such requisite principal amount is evidenced to the Trustee in accordance
with the Indenture.
Unless otherwise specified in the applicable Pricing Supplement, in the
case of a Note denominated in a Specified Currency other than U.S. dollars, the
amount of U.S. dollar payments in respect of such Note will be determined by an
agent for the Issuer of such Note specified in the applicable Pricing Supplement
(the 'Exchange Rate Agent'), based on the indicative quotation in The City of
New York selected by such Exchange Rate Agent at approximately 11:00 a.m., New
York City time, on the second Business Day preceding the applicable payment
date, that yields the largest number of U.S. dollars upon conversion of the
Specified Currency. Except with respect to LIBOR Notes and LIBID Notes (each as
defined below), 'Business Day' means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close and, with
respect to Notes denominated in or indexed to a Specified Currency other than
U.S. dollars or ECU, each Monday, Tuesday, Wednesday, Thursday or Friday which
is not a day on which banking institutions in the principal financial center of
the country issuing the Specified Currency are authorized or required by law or
regulation to close and a day on which banking institutions in such principal
financial center are carrying out transactions in such Specified Currency and,
with respect to Notes denominated in or indexed to ECU, each day which is not a
day that banking institutions in Luxembourg are authorized or required by law or
regulation to close and which is an ECU clearing day, as determined by the ECU
Banking Association in Paris. If the Notes are LIBOR Notes or LIBID Notes,
'Business Day' shall mean each day as determined pursuant to the preceding
sentence which is also a London business day (as defined below). Unless
otherwise specified in the applicable Pricing Supplement, such selection shall
be made from among the quotations of at least three banks agreed to by
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such Issuer and the Exchange Rate Agent appearing on the bank composite or
multi-contributor pages of the Reuters Monitor Foreign Exchange Service, or if
not available, the Telerate Monitor Foreign Exchange Service (the 'Exchange
Rate'). If such quotations are unavailable from either such foreign exchange
service, such selection shall be made as specified in the applicable Pricing
Supplement. If a payment is to be made in a Specified Currency and such
Specified Currency is unavailable due to the imposition of exchange controls or
to other circumstances beyond such Issuer's control, or is no longer used by the
government of the country issuing such Specified Currency or for the settlement
of transactions by public institutions of or within the international banking
community, the Issuer will be entitled to make payments in U.S. dollars on the
basis of the noon buying rate in The City of New York for cable transfers in the
Specified Currency as certified for customs purposes by the Federal Reserve Bank
of New York (the 'Market Exchange Rate') for such Specified Currency on the
second Business Day prior to such payment date, or on such other basis as shall
be specified in the applicable Pricing Supplement. In the event such Market
Exchange Rate is not then available, such Issuer will be entitled to make
payments in U.S. dollars (i) if such Specified Currency is not a composite
currency, on the basis of the most recently available Market Exchange Rate for
such Specified Currency or (ii) if such Specified Currency is a composite
currency, including, without limitation, ECU, in an amount determined by the
Exchange Rate Agent to be the sum of the results obtained by multiplying the
number of units of each component currency of such composite currency, as of the
most recent date on which such composite currency was used, by the Market
Exchange Rate for such component currency on the second Business Day prior to
such payment date (or if such Market Exchange Rate is not then available, by the
most recently available Market Exchange Rate for such component currency, or as
otherwise specified in the applicable Pricing Supplement). Unless otherwise
provided in the applicable Pricing Supplement, the Trustee will be the Exchange
Rate Agent with respect to the Notes.
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in a Specified Currency other than U.S. dollars or
ECU shall have elected to receive payments of principal (and premium, if any)
and interest, if any, on such Note in such Specified Currency as described
above, or if the Denominated Currency (as defined herein) of a Currency Indexed
Note is a foreign currency (other than ECU), and such Specified Currency or
Denominated Currency is unavailable as of the due date for any payment thereon
because of the imposition of exchange controls or other circumstances beyond the
Issuer's control, or is no longer used by the government of the country issuing
such Specified Currency or Denominated Currency or for the settlement of
transactions by public institutions of or within the international banking
community, then all payments due on such due date with respect to such Note
shall be made in U.S. dollars. The amount so payable on any date in such
Specified Currency or Denominated Currency shall be converted into U.S. dollars
at a rate determined by the Exchange Rate Agent on the basis of the most
recently available Market Exchange Rate, or as otherwise specified in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in ECU shall have elected to receive payments of
principal (and premium, if any) and interest, if any, on such Note in ECU as
described above, or if the Denominated Currency of a Currency Indexed Note is
ECU, and ECU are unavailable as of the due date for any payment thereon because
of the imposition of exchange controls or other circumstances beyond the
Issuer's control, or are no longer used in the European Monetary System, all
payments due on that due date with respect to such Note shall be made in U.S.
dollars. The amount so payable on any date in ECU shall be converted into U.S.
dollars at a rate determined by the Exchange Rate Agent as of the second
Business Day prior to the date on which such payment is due on the following
basis: The component currencies of ECU for this purpose shall be the currency
amounts that were components of the ECU as of the last date on which ECU were
used in the European Monetary System. The equivalent of ECU in U.S. dollars
shall be calculated by aggregating the U.S. dollar equivalents of such component
currencies. The U.S. dollar equivalent of each of such component currencies
shall be determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate, or as otherwise specified in the applicable
Pricing Supplement.
If the official unit of any component currency of a composite currency is
altered by way of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the same proportion.
If two or more component currencies are consolidated into a single currency, the
amounts of those currencies as components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a component
shall be replaced by amounts of
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such two or more currencies having an aggregate value on the date of division
equal to the amount of the former component currency immediately before such
division.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and, in the absence of manifest error, shall be
conclusive for all purposes and binding on holders of the Notes, and the
Exchange Rate Agent shall have no liability therefor.
Each Note will provide that, in the event of an official redenomination of
the Specified Currency thereof (including, without limitation, an official
redenomination of any such Specified Currency that is a composite currency), the
obligations of the applicable Issuer with respect to payments on Notes
denominated in such Specified Currency shall, in all cases, be deemed
immediately following such redenomination to provide for the payment of that
amount of redenominated currency representing the amount of such obligations
immediately before such redenomination. Except to the extent Currency Indexed
Notes provide for the adjustment of the principal amount payable at Maturity
thereof pursuant to application of the formulae described under 'Description of
Notes--Currency Indexed Notes--Payments of Principal and Interest,' or any other
formulae provided for in the applicable Pricing Supplement, Notes will not
provide for any adjustment to any amount payable under such Notes as a result of
(i) any change in the value of the Specified Currency thereof relative to any
other currency due solely to fluctuations in exchange rates or (ii) any
redenomination of any component currency of any composite currency (unless such
composite currency is itself officially redenominated).
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not generally offer non-U.S. dollar-denominated checking or savings account
facilities in the United States. Accordingly, payments on Notes made in a
currency other than U.S. dollars will be made from an account at a bank located
outside the United States unless otherwise specified in the applicable Pricing
Supplement.
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement, interest
on certificated Notes, and principal of Amortizing Notes (in each case other
than interest or, in the case of Amortizing Notes, principal, payable at
Maturity), will be paid by mailing a check (unless otherwise specified in the
applicable Pricing Supplement, from an account at a bank located outside the
United States if such check is payable in a currency other than U.S. dollars) to
the holder at the address of such holder appearing on the security register of
the applicable Issuer on the applicable Regular Record Date (which in the case
of a Global Security, will be the Depositary or its nominee); provided that in
the case of a Note issued between a Regular Record Date and the Interest Payment
Date relating to such Regular Record Date, interest for the period beginning on
the Issue Date or the date on which such Note otherwise begins to accrue
interest (if different from the Issue Date) and ending on such Interest Payment
Date shall be paid on the Interest Payment Date following the succeeding Regular
Record Date to the registered holder on such succeeding Regular Record Date.
Notwithstanding the foregoing, a holder of U.S. $10,000,000 or more in aggregate
principal amount of certificated Notes of like tenor and term (or a holder of
the equivalent thereof in a Specified Currency other than U.S. dollars) shall be
entitled to receive such interest and, in the case of Amortizing Notes,
principal payments in immediately available funds, but only if complete and
appropriate instructions have been received in writing by the Paying Agent on or
prior to the applicable Regular Record Date. Owners of beneficial interests in a
Global Security will be paid in accordance with the Depositary's and the
participant's procedures in effect from time to time as described under
'Description of Notes--Book-Entry Notes.' Simultaneously with the election by
any holder of a Note to receive payments in a Specified Currency other than U.S.
dollars (as provided above), such holder may, if so entitled as described above,
elect to receive such payments in immediately available funds by providing
complete and appropriate instructions to the Paying Agent, and all payments in
respect of principal or premium, if any, of, or interest, if any, on, such Note
will be made in immediately available funds to an account maintained by the
payee with a bank located outside the United States or as otherwise provided in
the applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, payments of principal (and premium, if any) and interest at
Maturity will be made in immediately available funds (unless otherwise specified
in the applicable Pricing Supplement, payable to an account maintained by the
payee with a bank located outside the United States if payable in a Specified
Currency other than U.S. dollars) upon surrender of the Note at the office of
the Paying Agent, provided that the Note is presented to the Paying Agent in
time for the Paying Agent to make such payments in such funds in
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accordance with its normal procedures. See 'Important Currency Exchange
Information.' Unless otherwise specified in the applicable Pricing Supplement,
principal, premium, if any, and interest, if any, payable at Maturity of a
Global Security will be paid by the Paying Agent by wire transfer in immediately
available funds to an account specified by the Depositary. Unless otherwise
specified in the applicable Pricing Supplement, payments of interest on a Global
Security, and principal of Amortizing Notes in global form (in each case, other
than at Maturity), will be made in same-day funds in accordance with existing
arrangements between the Paying Agent and the Depositary. The applicable Issuer
will pay any administrative costs imposed by banks in connection with making
payments in immediately available funds, but any tax, assessment or governmental
charge imposed upon payments, including, without limitation, any withholding
tax, will be borne by the holders of the Notes in respect of which such payments
are made.
INTEREST AND INTEREST RATES
Each Note other than a Zero-Coupon Note will bear interest from its Issue
Date (or such other date on which such Note otherwise begins to accrue interest
if different from the Issue Date) or from the most recent Interest Payment Date
to which interest on such Note has been paid or duly provided for at a fixed
rate or rates per annum, or at a rate or rates per annum determined pursuant to
a Base Rate stated therein and in the applicable Pricing Supplement that may be
adjusted by a Spread and/or Spread Multiplier, until the principal thereof is
paid or made available for payment. Interest will be payable on each Interest
Payment Date and at Maturity. 'Maturity' means the date on which the principal
of a Note or an installment of principal becomes due and payable in full in
accordance with its terms and the terms of the Indenture, whether at Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
Interest will be payable to the holder at the close of business on the Regular
Record Date next preceding such Interest Payment Date; provided, however, that
interest payable at Maturity will be payable to the person to whom principal
shall be payable. The first payment of interest on any Note originally issued
between a Regular Record Date for such Note and the succeeding Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date for such Note to the Holder on such next Regular Record
Date.
Interest rates and interest rate formulae are subject to change by an
Issuer, but no such change will affect any Note already issued or as to which an
offer to purchase has been accepted by such Issuer. The Interest Payment Dates
and the Regular Record Dates for each Fixed Rate Note shall be as described
below under 'Fixed Rate Notes.' The Interest Payment Dates for each Floating
Rate Note shall be as described below under 'Floating Rate Notes' and in the
applicable Pricing Supplement, and the Regular Record Dates for a Floating Rate
Note will be the fifteenth day (whether or not a Business Day) next preceding
each Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Issue Date or such other
date on which such Note otherwise begins to accrue interest (if different from
the Issue Date) at the rate per annum set forth thereon and in the applicable
Pricing Supplement until the principal amount thereof is paid, or made available
for payment, in full, except as described below under 'Description of
Notes--Subsequent Interest Periods' and 'Description of Notes--Extension of
Maturity.' Unless otherwise specified in the applicable Pricing Supplement,
interest on each Fixed Rate Note (other than a Zero-Coupon Note or an Amortizing
Note) will be payable semi-annually each February 15 and August 15 and the
Regular Record Dates will be each January 31 and July 31. Unless otherwise
specified in the applicable Pricing Supplement, principal of and interest on
each Amortizing Note will be payable either quarterly on each February 15, May
15, August 15 and November 15, or semi-annually on each February 15 and August
15 as set forth in the applicable Pricing Supplement, and at Maturity. Unless
otherwise specified in the applicable Pricing Supplement, the Regular Record
Dates will be each January 31, April 30, July 31 and October 31 for each
Amortizing Note that is payable quarterly and each January 31 and July 31 for
each Amortizing Note that is payable semi-annually. Payments with respect to
Amortizing Notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof. A table setting
forth repayment information in respect of each Amortizing Note will be included
in the applicable Pricing Supplement and set forth on such Notes. Each payment
of interest on a Fixed Rate Note shall include interest accrued through the day
before the Interest Payment Date or date of Maturity, as the case may be. Any
payment of principal (and premium, if any) or interest required to be made on a
Fixed Rate Note on a day that is not a
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Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such day,
and no additional interest shall accrue as a result of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes, if any, will be computed on the basis of a 360-day year of
twelve 30-day months.
FLOATING RATE NOTES
Except for the period from the Issue Date (or the date on which such Note
otherwise begins to accrue interest (if different from the Issue Date)) to the
first Interest Reset Date set forth in the applicable Pricing Supplement, each
Floating Rate Note will bear interest at a rate determined by reference to an
interest rate base (the 'Base Rate'), which may be adjusted by a Spread and/or a
Spread Multiplier. The applicable Pricing Supplement will designate one or more
of the following Base Rates as applicable to a Floating Rate Note: (a) the CD
Rate (a 'CD Rate Note'), (b) the Commercial Paper Rate (a 'Commercial Paper Rate
Note'), (c) LIBID (a 'LIBID Note'), (d) LIBOR (a 'LIBOR Note'), (e) the Treasury
Rate (a 'Treasury Rate Note'), (f) the Federal Funds Rate (a 'Federal Funds Rate
Note'), (g) the Prime Rate (a 'Prime Rate Note'), (h) the J.J. Kenny Rate (a
'J.J. Kenny Rate Note'), (i) the Eleventh District Cost of Funds Rate (an
'Eleventh District Cost of Funds Rate Note'), (j) the CMT Rate (a 'CMT Rate
Note') or (k) such other Base Rate or formula as is set forth in such Pricing
Supplement and in such Floating Rate Note. The 'Index Maturity' for any Floating
Rate Note is the period to maturity (as specified in the applicable Pricing
Supplement) of the instrument or obligation from which the Base Rate is
calculated.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following: (i) a maximum limitation, or ceiling,
on the rate at which interest may accrue during any interest period ('Maximum
Interest Rate'); and/or (ii) a minimum limitation, or floor, on the rate at
which interest may accrue during any interest period ('Minimum Interest Rate').
In addition to any Maximum Interest Rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on a Floating Rate
Note will in no event be higher than the maximum rate permitted by applicable
law (including, without limitation, New York law, which is stated to govern the
Notes and the Indenture), as the same may be modified by United States law of
general application. Under present New York law, the maximum rate of interest,
with certain exceptions, is 25% per annum on a simple interest basis. This limit
may not apply to Notes in which $2,500,000 or more has been invested, including
Notes purchased by the Agent in such aggregate principal amount or more for
resale to investors.
Unless otherwise specified herein or in the applicable Pricing Supplement,
all percentages resulting from any calculation of the rate of interest on a
Floating Rate Note will be rounded upward, if necessary, to the nearest one
hundred-thousandth of a percent (.0000001), with five one-millionths of a
percentage point being rounded upward, and all currency amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest one-hundredth of a unit (with five one-thousandths of a unit being
rounded upwards).
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (the 'Interest Reset
Period'), as or unless otherwise specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the date or
dates on which interest will be reset (each an 'Interest Reset Date') will be,
in the case of Floating Rate Notes that reset daily, each Business Day; in the
case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly,
the Wednesday of each week; in the case of Treasury Rate Notes that reset
weekly, the Tuesday of each week (except as provided below); in the case of
Floating Rate Notes that reset monthly, the third Wednesday of each month (with
the exception of monthly reset Eleventh District Cost of Funds Rate Notes, which
reset on the first calendar day of each month); in the case of Floating Rate
Notes that reset quarterly, the third Wednesday of each March, June, September
and December; in the case of Floating Rate Notes that reset semi-annually, the
third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and in the case of Floating Rate Notes that reset annually,
the third Wednesday of the month of each year specified in the applicable
Pricing Supplement; provided that (i) the interest rate in effect from the Issue
Date (or the date on which such Notes otherwise begin to accrue interest (if
different from the Issue Date)) to the first Interest Reset Date will be the
Initial Interest Rate (as defined below) and (ii) the interest rate in effect
for the 10 days immediately prior to Maturity will be that in effect on the
tenth day preceding such Maturity. If any Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be the
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succeeding Business Day, except that, in the case of a LIBID Note or a LIBOR
Note, if such Business Day is in the succeeding calendar month, such Interest
Reset Date shall be the next preceding Business Day. If an auction of direct
obligations of the United States ('Treasury bills') falls on a day that is an
Interest Reset Date for Treasury Rate Notes, the Interest Reset Date shall be
the next succeeding Business Day. The interest rate or the formula for
establishing the interest rate in effect with respect to a Floating Rate Note
from the Issue Date (or the date on which such Note otherwise begins to accrue
interest (if different from the Issue Date)) to the first Interest Reset Date
(the 'Initial Interest Rate') will be specified in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate on each Floating Rate Note will be calculated by reference to the
specified Base Rate (i) plus or minus the Spread, if any, and/or (ii) multiplied
by the Spread Multiplier, if any. The 'Spread' is the number of basis points
(one basis point equals one-hundredth of a percentage point) to be added to or
subtracted from the related Base Rate applicable to such Floating Rate Note, and
the 'Spread Multiplier' is the percentage of the related Base Rate applicable to
such Floating Rate Note by which said Base Rate is to be multiplied to determine
the applicable interest rate on such Floating Rate Note. Each Floating Rate Note
and the applicable Pricing Supplement will specify the Spread and/or Spread
Multiplier, if any, applicable to each such Floating Rate Note.
Unless otherwise specified in the applicable Pricing Supplement, the
interest payable on each Interest Payment Date or at Maturity for Floating Rate
Notes will be the amount of interest accrued from and including the Issue Date
(or the date on which such Notes otherwise begin to accrue interest (if
different from the Issue Date)) or from and including the last Interest Payment
Date to which interest has been paid to, but excluding, such Interest Payment
Date or date of Maturity, as the case may be (an 'Interest Period'); provided
that in the case of a Floating Rate Note on which interest is reset daily or
weekly, interest payable on each Interest Payment Date will be the amount of
interest accrued from and including the Issue Date (or the date on which such
Notes otherwise begin to accrue interest (if different from the Issue Date)) or
from and excluding the last date to which interest has been paid, as the case
may be, to, and including, the Regular Record Date immediately preceding such
Interest Payment Date, except that at Maturity the interest payable will include
interest accrued to, but excluding, the date of Maturity.
With respect to a Floating Rate Note, unless otherwise specified in the
applicable Pricing Supplement, accrued interest will be calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Unless otherwise specified in the applicable Pricing
Supplement, such accrued interest factor will be computed by adding the interest
factors calculated for each day in the Interest Period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
Pricing Supplement, the interest factor for each such day is computed by
dividing the interest rate applicable on such day by 360, in the cases of CD
Rate Notes, Commercial Paper Rate Notes, LIBID Notes, LIBOR Notes, Federal Funds
Rate Notes, Prime Rate Notes, J.J. Kenny Rate Notes or Eleventh District Cost of
Funds Rate Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes and CMT Rate Notes. The interest rate applicable to any day
that is an Interest Reset Date is the interest rate as determined, in accordance
with the procedures hereinafter set forth, with respect to the Interest
Determination Date (as defined below) pertaining to such Interest Reset Date.
The interest rate applicable to any other day is the interest rate for the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes that reset daily or weekly
or monthly (other than Eleventh District Cost of Funds Rate Notes), on the third
Wednesday of each month or on the third Wednesday of March, June, September and
December of each year, as specified in the applicable Pricing Supplement, or, in
the case of Eleventh District Cost of Funds Rate Notes, on the first calendar
day of each month or the first calendar day of each March, June, September and
December, as specified in the applicable Pricing Supplement; in the case of
Floating Rate Notes that reset quarterly, on the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate Notes that
reset semi-annually, on the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and in the case of Floating Rate
Notes that reset annually, on the third Wednesday of the month of each year
specified in the applicable Pricing Supplement, and in each case at Maturity
(each such day being an 'Interest Payment Date'). Unless otherwise specified in
the applicable Pricing Supplement, if an Interest Payment Date (other than at
Maturity) with respect to any Floating Rate Note would otherwise be a day that
is not a Business Day, such Interest Payment Date shall be the succeeding
Business Day,
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except, in the case of a LIBID Note or a LIBOR Note, if such day would fall in
the succeeding calendar month, such Interest Payment Date will be the preceding
Business Day. Any payment of principal (and premium, if any) and interest
required to be made on a Floating Rate Note on a date of Maturity that is not a
Business Day will be made on the succeeding Business Day, except, in the case of
a LIBID Note or a LIBOR Note, if such Business Day would fall in the succeeding
calendar month, such payment will be made on the preceding Business Day (in each
case with the same force and effect as if made on such date of Maturity and no
additional interest shall accrue as a result of any such delayed payment).
Unless otherwise specified in the applicable Pricing Supplement, the
'Interest Determination Date' pertaining to an Interest Reset Date for CD Rate
Notes (the 'CD Interest Determination Date'), Commercial Paper Rate Notes (the
'Commercial Paper Interest Determination Date'), Federal Funds Rate Notes (the
'Federal Funds Interest Determination Date'), Prime Rate Notes (the 'Prime Rate
Interest Determination Date'), J.J. Kenny Rate Notes (the 'J.J. Kenny Interest
Determination Date') and CMT Rate Notes (the 'CMT Interest Determination Date')
will be the second Business Day preceding such Interest Reset Date. Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to an Interest Reset Date for LIBID Notes (the
'LIBID Interest Determination Date') and LIBOR Notes (the 'LIBOR Interest
Determination Date') will be the second London Business Day (as defined below)
preceding such Interest Reset Date. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Determination Date pertaining to an Interest
Reset Date for a Treasury Rate Note (the 'Treasury Interest Determination Date')
will be the day of the week in which such Interest Reset Date falls on which
Treasury bills of the applicable Index Maturity are auctioned. Treasury bills
are normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Treasury Interest Determination Date pertaining to the Interest
Reset Date occurring in the succeeding week. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Determination Date pertaining to an
Interest Reset Date for an Eleventh District Cost of Funds Rate Note (the
'Eleventh District Cost of Funds Interest Determination Date') will be the last
working day of the month immediately preceding such Interest Reset Date on which
the Federal Home Loan Bank of San Francisco (the 'FHLB of San Francisco')
publishes the monthly Eleventh District Cost of Funds Index (as defined below).
Unless otherwise specified in the applicable Pricing Supplement, the
'Calculation Date,' where applicable, pertaining to an Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or date of Maturity, as the case may be.
The applicable Issuer will appoint, and enter into an agreement with, an
agent (the 'Calculation Agent') to calculate interest on the Floating Rate
Notes. Unless otherwise specified in the applicable Pricing Supplement, The Bank
of New York will be the calculation agent with respect to Floating Rate Notes.
Upon the request of the holder of any Floating Rate Note, the Calculation Agent
will advise such holder of the interest rate then in effect and, if determined,
the interest rate that will become effective on the next Interest Reset Date
with respect to such Floating Rate Note. All determinations to be made by the
Calculation Agent shall be at its sole discretion and, in the absence of
manifest error, shall be conclusive for all purposes and binding on holders of
the Notes, and the Calculation Agent shall have no liability therefor.
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in the CD Rate Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, 'CD Rate'
means, with respect to any CD Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity designated in
the applicable Pricing Supplement as made available and subsequently published
by the Board of Governors of the Federal Reserve System in 'Statistical Release
H.15(519), Selected Interest Rates' or any successor publication of the Board of
Governors of the Federal Reserve System ('H.15(519)') under the heading 'CDs
(Secondary Market).' In the event that such rate is not made available prior to
3:00 P.M., New
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York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, then the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit having the specified
Index Maturity as made available and subsequently published by the Federal
Reserve Bank of New York in its daily statistical release 'Composite 3:30 P.M.
Quotations for U.S. Government Securities' or any successor publication
('Composite Quotations') under the heading 'Certificates of Deposit.' If by 3:00
P.M., New York City time, on the Calculation Date pertaining to such CD Interest
Determination Date the rate for such CD Interest Determination Date has not yet
been made available in either H.15(519) or Composite Quotations, then the CD
Rate for such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks of the highest credit standing (in the market for negotiable certificates
of deposit) having a remaining maturity closest to the specified Index Maturity
in a denomination of $5,000,000; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate with respect to such CD Interest Determination Date will
be the CD Rate in effect on such CD Interest Determination Date.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the Commercial Paper Rate Notes and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
'Commercial Paper Rate' means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) on
such date of the rate for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement as made available and subsequently
published in H.15(519) under the heading 'Commercial Paper.' In the event that
such rate is not made available by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate
on that Commercial Paper Interest Determination Date for commercial paper having
the Index Maturity designated in the applicable Pricing Supplement as made
available and subsequently published in Composite Quotations under the heading
'Commercial Paper.' If by 3:00 P.M., New York City time, on such Calculation
Date such rate has not yet been made available in either H.15(519) or Composite
Quotations, the Commercial Paper Rate for such Commercial Paper Interest
Determination Date shall be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.,
New York City time, on such Commercial Paper Interest Determination Date of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement placed for an industrial issuer whose
senior unsecured bond rating is 'AA,' or the equivalent, from a nationally
recognized securities rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
'Money Market Yield' shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
----------------
Money Market Yield = 360 - (D x M) x 100
where 'D' refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and 'M' refers to the actual
number of days in the interest period for which interest is being calculated.
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LIBID NOTES
LIBID Notes will bear interest at the interest rates (calculated by
reference to LIBID and the Spread and/or Spread Multiplier, if any) specified in
the LIBID Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBID will
be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to a LIBID Interest Determination Date, LIBID will be
as specified in the applicable Pricing Supplement, either LIBID Reuters (as
defined below) or LIBID Telerate (as defined below), subject to the last
sentence of this paragraph. 'LIBID Reuters' means the arithmetic mean of
the bid rates for deposits in the Designated Deposit Currency (as defined
below) having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second day on which dealings in deposits in
the Designated Deposit Currency are transacted in the London interbank
market ('London Business Day') immediately following such LIBID Interest
Determination Date, that appear on the display designated as page 'LIBO' on
the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on that service for the purpose of displaying London
interbank bid and offered rates of major banks) (the 'Reuters Screen LIBO
Page') as of 11:00 A.M., London time, on such LIBID Interest Determination
Date, if at least two such bid rates appear on the Reuters Screen LIBO
Page. 'LIBID Telerate' means the rate for deposits in the Designated
Deposit Currency having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following that LIBID Interest Determination Date, that appears
on the display designated as page '3750' on the Telerate Service (or such
other page as may replace the 3750 page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank bid and offered rates for
deposits in the Designated Deposit Currency) (the 'Telerate Page 3750') as
of 11:00 A.M., London time, on such LIBID Interest Determination Date. If
neither LIBID Reuters nor LIBID Telerate is specified in the applicable
Pricing Supplement, LIBID will be determined as if LIBID Telerate had been
specified. If fewer than two bid rates appear on the Reuters Screen LIBO
Page, or if no rate appears on the Telerate Page 3750, as applicable, LIBID
in respect of such LIBID Interest Determination Date will be determined as
if the parties had specified the rate described in (ii) below.
(ii) With respect to a LIBID Interest Determination Date on which
fewer than two bid rates appear on the Reuters Screen LIBO Page, or on
which no rate appears on Telerate Page 3750, as applicable, LIBID will be
determined on the basis of the bid rates at which deposits in the
Designated Deposit Currency, having the Index Maturity designated in the
applicable Pricing Supplement, are quoted at approximately 11:00 A.M.,
London time, on such LIBID Interest Determination Date to prime banks in
the London interbank market by four major banks in the London interbank
market selected by the Calculation Agent (the 'LIBID Reference Banks')
commencing on the second London Business Day immediately following such
LIBID Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 (or the equivalent in the
Designated Deposit Currency) that is representative for a single
transaction in such market at such time. The Calculation Agent will request
the principal London office of each of such LIBID Reference Banks to
provide a quotation of its rate. If at least two such quotations are
provided, LIBID in respect of such LIBID Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBID in respect of such LIBID Interest Determination Date will
be the arithmetic mean of the rates quoted in the applicable Principal
Financial Center (as defined below), on such LIBID Interest Determination
Date by three major banks in such Principal Financial Center selected by
the Calculation Agent for loans in the Designated Deposit Currency to
leading banks, having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following the LIBID Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000 (or
the equivalent in the Designated Deposit Currency) that is representative
for a single transaction in such market at such time; provided, however,
that if the banks selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBID with respect to such LIBID
Interest Determination Date will be LIBID in effect on such LIBID Interest
Determination Date.
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LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be
as specified in the applicable Pricing Supplement, either LIBOR Reuters (as
defined below) or LIBOR Telerate (as defined below), subject to the last
sentence of this paragraph. 'LIBOR Reuters' means the arithmetic mean of
the offered rates for deposits in the Designated Deposit Currency having
the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second London Business Day immediately following such
LIBOR Interest Determination Date, that appear on the Reuters Screen LIBO
Page as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page. 'LIBOR Telerate' means the rate for deposits in the Designated
Deposit Currency having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, that appears
on Telerate Page 3750 as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date. If neither LIBOR Reuters nor LIBOR Telerate is
specified in the applicable Pricing Supplement, LIBOR will be determined as
if LIBOR Telerate had been specified. If fewer than two offered rates
appear on the Reuters Screen LIBO Page, or if no rate appears on the
Telerate Page 3750, as applicable, LIBOR in respect of such LIBOR Interest
Determination Date will be determined as if the parties had specified the
rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen LIBO Page, or on
which no rate appears on Telerate Page 3750, as applicable, LIBOR will be
determined on the basis of the rates at which deposits in the Designated
Deposit Currency, having the Index Maturity designated in the applicable
Pricing Supplement, are offered at approximately 11:00 A.M., London time,
on such LIBOR Interest Determination Date by four major banks in the London
interbank market selected by the Calculation Agent (the 'LIBOR Reference
Banks') to prime banks in the London interbank market commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date and in a principal amount equal to an amount of not less
than U.S. $1,000,000 (or the equivalent in the Designated Deposit Currency)
that is representative for a single transaction in such market at such
time. The Calculation Agent will request the principal London office of
each of such LIBOR Reference Banks to provide a quotation of its rate. If
at least two such quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of the rates quoted
in the applicable Principal Financial Center, on such LIBOR Interest
Determination Date by three major banks in such Principal Financial Center
selected by the Calculation Agent for loans in the Designated Deposit
Currency to leading banks, having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Business Day
immediately following the LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000 (or
the equivalent in the Designated Deposit Currency) that is representative
for a single transaction in such market at such time; provided, however,
that if the banks selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR with respect to such LIBOR
Interest Determination Date will be LIBOR in effect on such LIBOR Interest
Determination Date.
'Designated Deposit Currency' means, with respect to any LIBID Note or
LIBOR Note, the currency (including a composite currency), if any, designated in
the applicable LIBID Note or LIBOR Note as the Designated Deposit Currency. If
no such currency is designated in the applicable LIBID Note or LIBOR Note, the
Designated Deposit Currency shall be U.S. dollars. 'Principal Financial Center'
means, with respect to any LIBID Note or LIBOR Note, unless otherwise specified
in the applicable Pricing Supplement, the capital city of the country that
issues as its legal tender the Designated Deposit Currency of such LIBID Note or
LIBOR Note, except that with respect to U.S. dollars, Deutsche marks and ECUs,
the Principal Financial Center shall be the City of New York, Frankfurt and
Luxembourg, respectively.
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TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in the Treasury Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, 'Treasury
Rate' means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of Treasury bills having the Index Maturity
designated in the applicable Pricing Supplement as made available and
subsequently published in H.15(519) under the heading 'U.S. Government
Securities--Treasury bills-auction average (investment)' or, if not so made
available by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Treasury Interest Determination Date, the auction average rate
(expressed as a bond equivalent, rounded to the nearest one hundredth of a
percent, with five one thousandths of a percent rounded upward, on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) for such
auction or as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury bills having
the Index Maturity designated in the applicable Pricing Supplement are not
otherwise made available or published or reported as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no such auction is
held in a particular week, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with five one-
thousandths of a percent rounded upward, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Treasury Interest Determination Date of three leading primary United
States government securities dealers selected by the Calculation Agent for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate with respect to such Treasury
Interest Determination Date will be the Treasury Rate in effect on such Treasury
Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in the Federal Funds Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, 'Federal
Funds Rate' means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds as made available and subsequently
published in H.15(519) under the heading 'Federal Funds (Effective).' In the
event that such rate has not been made available by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Federal Funds Interest
Determination Date, the Federal Funds Rate will be the rate on such Federal
Funds Interest Determination Date as made available and subsequently published
in Composite Quotations under the heading 'Federal Funds/Effective Rate.' If
such rate is not made available in H.15(519) or in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, then the Federal Funds Rate
for such Federal Funds Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates as of 9:00 A.M.,
New York City time, on such Federal Funds Interest Determination Date for the
last transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the Federal Funds Rate in effect on such Federal Funds Interest Determination
Date.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any)
specified in the Prime Rate Notes and in the applicable Pricing Supplement.
S-15
<PAGE>
Unless otherwise indicated in the applicable Pricing Supplement, 'Prime
Rate' means, with respect to any Prime Interest Determination Date, the rate
made available and subsequently published on such date in H.15(519) under the
heading 'Bank Prime Loan.' In the event that such rate has not been made
available prior to 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Prime Interest Determination Date, the Prime Rate will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
of interest publicly announced by each bank that appears on the Reuters Screen
USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate
as in effect for such Prime Interest Determination Date. If fewer than four such
rates but more than one such rate appear on the Reuters Screen USPRIME1 Page for
the Prime Interest Determination Date, the rate shall be the arithmetic mean of
the prime rates quoted on the basis of the actual number of days in the year
divided by 360 as of the close of business on such Prime Interest Determination
Date by four major money center banks in The City of New York selected by the
Calculation Agent. If fewer than two such rates appear on the Reuters Screen
USPRIME1 Page, the Prime Rate will be calculated by the Calculation Agent and
will be the arithmetic mean of the prime rates quoted in The City of New York on
such Prime Interest Determination Date by at least three substitute banks or
trust companies organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of at least U.S.
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or rates;
provided, however, that if the banks or trust companies selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the Prime
Rate with respect to such Prime Interest Determination Date will be the Prime
Rate in effect on such Prime Interest Determination Date. 'Reuters Screen
USPRIME1 Page' means the display designated as page 'USPRIME1' on the Reuters
Monitor Money Rates Service (or such other page as may replace the USPRIME1 page
on that service for the purpose of displaying prime rates or base lending rates
of major United States banks).
J.J. KENNY RATE NOTES
J.J. Kenny Rate Notes will bear interest at the interest rates (calculated
by reference to the J.J. Kenny Rate and the Spread and/or Spread Multiplier, if
any) specified in the J.J. Kenny Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise indicated in an applicable Pricing Supplement, 'J.J. Kenny
Rate' means, with respect to any J.J. Kenny Interest Determination Date, the per
annum rate on such date equal to the index made available and subsequently
published by Kenny Information Systems or its successor, based upon 30-day yield
evaluations at par of bonds, the interest on which is excludable from gross
income for Federal income tax purposes under the Internal Revenue Code of 1986,
as amended (the 'Code'), of not less than five 'high grade' component issuers
selected from time to time by Kenny Information Systems, including without
limitation, issuers of general obligation bonds; provided, however, that the
bonds on which the index is based shall not include any bonds the interest on
which is subject to an 'alternate minimum tax' or similar tax under the Code,
unless all tax-exempt bonds are subject to such tax. If such rate is not made
available by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such J.J. Kenny Interest Determination Date, the J.J. Kenny Rate shall be the
rate quoted by a successor indexing agent selected by the applicable Issuer
equaling the prevailing rate for bonds rated in the highest short-term rating
category by Moody's Investors Service, Inc. and Standard & Poor's Corporation in
respect of issuers selected by such successor indexing agent most closely
resembling the 'high grade' component issuers selected by Kenny Information
Systems that are subject to tender by the holders thereof for purchase on not
more than seven days notice and the interest on which is (A) variable on a
weekly basis, (B) excludable from gross income for Federal income tax purposes
under the Code, and (C) not subject to an 'alternate minimum tax' or similar tax
under the Code, unless all tax-exempt bonds are subject to such tax; provided,
however, that if a successor indexing agent is not available, the J.J. Kenny
Rate with respect to such J.J. Kenny Interest Determination Date will be the
J.J. Kenny Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the Initial Interest Rate).
ELEVENTH DISTRICT COST OF FUNDS RATE NOTES
Eleventh District Cost of Funds Rate Notes will bear interest at the
interest rates (calculated by reference to the Eleventh District Cost of Funds
Rate and the Spread and/or Spread Multiplier, if any) specified in the Eleventh
District Cost of Funds Rate Notes and in the applicable Pricing Supplement.
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<PAGE>
Unless otherwise indicated in an applicable Pricing Supplement, 'Eleventh
District Cost of Funds Rate' means, with respect to any Eleventh District Cost
of Funds Interest Determination Date, the rate equal to the monthly weighted
average cost of funds for the calendar month preceding such Eleventh District
Cost of Funds Interest Determination Date as set forth under the caption
'Eleventh District' on Telerate Page 7058 as of 11:00 A.M., San Francisco time,
on such Eleventh District Cost of Funds Interest Determination Date. If such
rate does not appear on Telerate Page 7058 on any related Eleventh District Cost
of Funds Interest Determination Date, the Eleventh District Cost of Funds Rate
for such Eleventh District Cost of Funds Interest Determination Date shall be
the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
'Eleventh District Cost of Funds Rate Index') by the FHLB of San Francisco as
such cost of funds for the calendar month preceding the date of such
announcement. If the FHLB of San Francisco fails to announce such rate for the
calendar month next preceding such Eleventh District Cost of Funds Interest
Determination Date, then the Eleventh District Cost of Funds Rate for such
Eleventh District Cost of Funds Interest Determination Date will be the Eleventh
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds
Interest Determination Date.
CMT RATE NOTES
CMT Rate Notes will bear interest at the interest rates (calculated by
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in the CMT Rate Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in an applicable Pricing Supplement, 'CMT Rate'
means, with respect to any CMT Interest Determination Date, the CMT Rate for
Treasury bills on such date having the Index Maturity designated in the
applicable Pricing Supplement as made available and subsequently published in
H.15(519) under the heading 'Treasury constant maturities' or, if not so made
available by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such CMT Interest Determination Date, as displayed on Telerate Screen Page
7052 under the heading 'Treasury Constant Maturities.' If by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such CMT Interest Determination
Date the rate has not yet been made available in H.15(519) or displayed on
Telerate Screen Page 7052, then the CMT Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with five one
thousandths of a percent rounded upward, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such CMT Interest Determination Date of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the CMT Rate with respect to such CMT Interest
Determination Date will be the CMT Rate in effect immediately prior to such CMT
Interest Determination Date.
INVERSE FLOATING RATE NOTES
Any Floating Rate Note may be designated in the applicable Pricing
Supplement as an 'Inverse Floating Rate Note,' in which event, unless otherwise
specified in the applicable Pricing Supplement, the interest rate on such
Floating Rate Note will be equal to (i) in the case of the period, if any,
commencing on the Issue Date (or the date on which such Note otherwise begins to
accrue interest (if different from the Issue Date)) up to the first Interest
Reset Date, a fixed rate of interest established by the applicable Issuer as
described in the applicable Pricing Supplement and (ii) in the case of each
period commencing on an Interest Reset Date, a fixed rate of interest specified
in the Pricing Supplement minus the interest rate determined by reference to the
Base Rate as adjusted by the Spread and/or Spread Multiplier, if any; provided,
however, that (x) the interest rate thereon will not be less than zero and (y)
the interest rate in effect for the ten days immediately prior to the date of
Maturity of such Inverse Floating Rate Note will be that in effect on the tenth
day preceding such date.
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FLOATING RATE/FIXED RATE NOTES
The applicable Pricing Supplement may provide that a Note will be a
Floating Rate Note for a specified portion of its term and a Fixed Rate Note for
the remainder of its term, in which event the interest rate on such Note will be
determined as herein provided as if it were a Floating Rate Note and a Fixed
Rate Note hereunder for each such respective period, all as specified in such
applicable Pricing Supplement.
CURRENCY INDEXED NOTES
General
The Issuers may from time to time offer Notes, the principal amount payable
at Maturity and/or the interest rate of which is determined by reference to the
rate of exchange between the currency or composite currency in which such Notes
are denominated (the 'Denominated Currency') and the other currency or composite
currency specified as the Indexed Currency (the 'Indexed Currency') in the
applicable Pricing Supplement, or as determined in such other manner as may be
specified in the applicable Pricing Supplement ('Currency Indexed Notes').
Unless otherwise specified in the applicable Pricing Supplement, holders of
Currency Indexed Notes will be entitled to receive (i) an amount in respect of
such Currency Indexed Notes exceeding the amount designated as the face amount
of the principal (the 'Face Amount') of, and/or interest calculated at the
designated rate of interest on, such Currency Indexed Notes in the applicable
Pricing Supplement if, on the date of Maturity or upon the relevant Interest
Payment Date, as the case may be, the rate at which the Denominated Currency can
be exchanged for the Indexed Currency is greater than the rate of such exchange
designated as the Base Exchange Rate, expressed in units of the Indexed Currency
per one unit of the Denominated Currency, in the applicable Pricing Supplement
(the 'Base Exchange Rate'), or (ii) an amount in respect of such Currency
Indexed Notes less than the Face Amount and/or interest calculated at such
designated interest rate of such Currency Indexed Notes if, at Maturity or upon
the relevant Interest Payment Date, as the case may be, the rate at which the
Denominated Currency can be exchanged for the Indexed Currency is less than such
Base Exchange Rate, in each case determined as described below under 'Payment of
Principal and Interest.' Information as to the relative historical value (which
information is not necessarily indicative of relative future value) of the
applicable Denominated Currency against the applicable Indexed Currency, any
exchange controls applicable to such Denominated Currency or Indexed Currency
and the United States Federal income tax consequences of the purchase, ownership
and disposition of Currency Indexed Notes will be set forth in the applicable
Pricing Supplement. See 'Foreign Currency Risks.'
Unless otherwise specified in the applicable Pricing Supplement, the term
'Exchange Rate Day' shall mean any day which is a Business Day in The City of
New York, and if the Denominated Currency or Indexed Currency is any currency or
composite currency other than the U.S. dollar, in the principal financial center
of the country of such Denominated Currency or Indexed Currency.
Payment of Principal and Interest
Unless otherwise specified in the applicable Pricing Supplement, the
payment of principal at Maturity and interest on Currency Indexed Notes on each
Interest Payment Date (until principal thereof is paid or made available for
payment) will be payable in the Denominated Currency (except in the
circumstances of the unavailability of such currency, as otherwise described
under 'Payment Currency' above) in amounts calculated in the manner described
below.
Unless otherwise specified in the applicable Pricing Supplement, principal
at Maturity, if indexed, will be payable in an amount equal to the Face Amount
of the Currency Indexed Note, plus or minus an amount of the Denominated
Currency determined by the determination agent specified in the applicable
Pricing Supplement (the 'Determination Agent') by reference to the difference
between the Base Exchange Rate and the rate at which the Denominated Currency
can be exchanged for the Indexed Currency on the second Exchange Rate Day (the
'Determination Date') prior to the date of Maturity of such Currency Indexed
Note. Such rate of exchange shall be the highest bid of the open market spot
offer quotations for the Indexed Currency (spot bid quotations for the
Denominated Currency) obtained by the Determination Agent from the Reference
Dealers (as defined below) in The City of New York at 11:00 A.M., New York City
time, on the Determination Date, for an amount of
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Indexed Currency equal to the Face Amount of such Currency Indexed Note
multiplied by the Base Exchange Rate, with settlement on the date of Maturity to
be in the Denominated Currency (such rate of exchange, as so determined and
expressed in units of the Indexed Currency per one unit of the Denominated
Currency, is hereafter referred to as the 'Spot Rate'). If such quotations from
the Reference Dealers are not available on the Determination Date due to
circumstances beyond the control of such Issuer or the Determination Agent, the
Spot Rate will be determined on the basis of the most recently available
quotations from the Reference Dealers. As used herein, the term 'Reference
Dealers' shall mean the three banks or firms specified as such in the applicable
Pricing Supplement, or if any of them shall be unwilling or unable to provide
the requested quotations, such other major money center bank or banks in The
City of New York selected by the Determination Agent to act as Reference Dealer
or Dealers in replacement therefor. In the absence of manifest error, the
determination by the Determination Agent of the Spot Rate and the principal
amount of and interest on the Currency Indexed Notes payable at Maturity thereof
shall be final and binding on such Issuer and the holders of such Currency
Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the
basis of the aforesaid determination by the Determination Agent and the formulae
and limitations set forth below, (i) if the Base Exchange Rate equals the Spot
Rate for any Currency Indexed Note, then the principal amount of such Currency
Indexed Note payable at Maturity would be equal to the Face Amount of such
Currency Indexed Note; (ii) if the Spot Rate exceeds the Base Exchange Rate
(i.e., the Denominated Currency has appreciated against the Indexed Currency
during the term of the Currency Indexed Note), then the principal amount so
payable would be greater than the Face Amount of such Currency Indexed Note up
to an amount equal to twice the Face Amount of such Currency Indexed Note; (iii)
if the Spot Rate is less than the Base Exchange Rate (i.e., the Denominated
Currency has depreciated against the Indexed Currency during the term of the
Currency Indexed Note) but is greater than one-half of the Base Exchange Rate,
then the principal amount so payable would be less than the Face Amount of such
Currency Indexed Note; and (iv) if the Spot Rate is less than or equal to
one-half of the Base Exchange Rate, then the Spot Rate will be deemed to be
one-half of the Base Exchange Rate and no principal amount of the Currency
Indexed Note would be payable at Maturity.
With respect to the payment of interest on each Interest Payment Date, if
indexed, the amount will be the Face Amount multiplied by the relevant interest
rate, indexed as specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
formulae to be used by the Determination Agent to determine the principal amount
of a Currency Indexed Note payable at Maturity will be as follows:
As to principal, if the Spot Rate exceeds or equals the Base Exchange Rate,
the principal amount of a Currency Indexed Note payable at Maturity shall equal:
Face Amount + (Face Amount x Spot Rate--Base Exchange Rate)
------------------------------
Spot Rate
and if the Base Exchange Rate exceeds the Spot Rate, the principal amount of a
Currency Indexed Note payable at Maturity (which shall, in no event, be less
than zero) shall equal:
Face Amount + (Face Amount x Base Exchange Rate - Spot Rate)
-------------------------------
Spot Rate
Unless otherwise specified in the applicable Pricing Supplement, if the
formulae set forth above are applicable to a Currency Indexed Note, the maximum
principal amount payable at Maturity in respect of such a Currency Indexed Note
would be an amount equal to twice the Face Amount and the minimum principal
amount payable would be zero.
OTHER INDEXED NOTES AND CERTAIN TERMS APPLICABLE TO ALL INDEXED NOTES
The Notes may be issued as Indexed Notes, other than Currency Indexed
Notes, the principal amount of which payable at Maturity or the interest (or
premium, if any) thereon, or both, may be determined by reference to the
relationship between two or more currencies, to the price of one or more
specified securities or commodities, to one or more securities or commodities
exchange indices or other indices or by other similar
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methods or formulae. The Pricing Supplement relating to such an Indexed Note
will describe, as applicable, the method by which the amount of interest payable
on any Interest Payment Date and the amount of principal payable at Maturity in
respect of such Indexed Note will be determined, the U.S. Federal income tax
consequences of the purchase, ownership and disposition of such Notes, certain
risks associated with an investment in such Notes and other information relating
to such Notes. See 'Foreign Currency Risks.'
Unless otherwise specified in the applicable Pricing Supplement, the
maximum principal amount payable at Maturity in respect of any Indexed Note will
be an amount equal to twice the Face Amount of such Note and the minimum
principal amount so payable will be zero.
Unless otherwise specified in the applicable Pricing Supplement, (i) for
the purpose of determining whether holders of the requisite principal amount of
Securities outstanding under the Indenture have made a demand or given a notice
or waiver or taken any other action, the outstanding principal amount of Indexed
Notes will be deemed to be the Face Amount thereof, and (ii) in the event of an
acceleration of the Stated Maturity of an Indexed Note, the principal amount
payable to the holder of such Note upon acceleration will be the principal
amount determined by reference to the formula by which the principal amount of
such Note would be determined on the Stated Maturity thereof, as if the date of
acceleration were the Stated Maturity.
An investment in Indexed Notes entails significant risks, including wide
fluctuations in market value as well as in the amounts of payments due
thereunder, that are not associated with a similar investment in a conventional
debt security. Such risks depend on a number of factors including supply and
demand for the particular commodity and economic and political events over which
the Issuers have no control. Fluctuations in the price of any particular
security or commodity, in the rates of exchange between particular currencies or
in particular indices that have occurred in the past are not necessarily
indicative, however, of fluctuations in the price or rates of exchange that may
occur during the term of any Indexed Notes. Accordingly, prospective investors
should consult their own financial and legal advisors as to the risks entailed
by an investment in Indexed Notes. Indexed Notes are not an appropriate
investment for investors who are unsophisticated with respect to securities,
commodities and/or foreign currency transactions.
DUAL CURRENCY NOTES
Each Issuer may from time to time offer Notes (the 'Dual Currency Notes')
as to which such Issuer has a one time option, exercisable on any one of the
dates specified in the applicable Pricing Supplement (each an 'Option Election
Date') in whole, but not in part, with respect to all Dual Currency Notes issued
on the same day and having the same terms (a 'Tranche'), of thereafter making
all payments of principal, premium, if any, and interest (which payments would
otherwise be made in the Specified Currency of such Notes) in the optional
currency specified in the applicable Pricing Supplement (the 'Optional Payment
Currency'). Information as to the relative value of the Specified Currency
compared to the Optional Payment Currency will be set forth in the applicable
Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the Specified Currency and Optional Payment
Currency of such issuance and the Designated Exchange Rate for such issuance,
which will be a fixed exchange rate used for converting amounts denominated in
the Specified Currency into amounts denominated in the Optional Payment Currency
(the 'Designated Exchange Rate'). The Pricing Supplement will also specify the
Option Election Dates and Interest Payment Dates for the related issuance of
Dual Currency Notes. Each Option Election Date will be a certain number of days
before an Interest Payment Date or the Maturity Date, as set forth in the
applicable Pricing Supplement, and will be the date on which such Issuer may
select whether to make all scheduled payments due thereafter in the Optional
Payment Currency rather than in the Specified Currency.
If such Issuer makes such an election, the amount payable in the Optional
Payment Currency shall be determined using the Designated Exchange Rate
specified in the applicable Pricing Supplement. If such election is made, notice
of such election shall be mailed in accordance with the terms of the applicable
Tranche of Dual Currency Notes within two Business Days of the Option Election
Date and shall state (i) the first date, whether an Interest Payment Date and/or
the Maturity Date, on which scheduled payments in the Optional Payment Currency
will be made and (ii) the Designated Exchange Rate. Any such notice by such
Issuer, once given, may not be
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withdrawn. The equivalent value in the Specified Currency of payments made after
such an election may be less, at the then current exchange rate, than if such
Issuer had made such payment in the Specified Currency.
For Federal income tax purposes, holders of Dual Currency Notes may be
subject to rules which differ from the general rules applicable to holders of
other types of Notes offered hereby. The U.S. Federal income tax consequences of
the purchase, ownership and disposition of Dual Currency Notes will be set forth
in the applicable Pricing Supplement.
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Issuer thereof has the option with respect to such Note to reset the interest
rate, in the case of a Fixed Rate Note, or to reset the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, and, if so, the date or dates
on which such interest rate or such Spread and/or Spread Multiplier, as the case
may be, may be reset (each an 'Optional Reset Date'). If the Issuer thereof has
such option with respect to any Note, the following procedures shall apply,
unless modified as set forth in the applicable Pricing Supplement.
Such Issuer may exercise such option with respect to a Note by notifying
the Trustee of such exercise at least 45 but not more than 60 days prior to an
Optional Reset Date for such Note. Not later than 40 days prior to such Optional
Reset Date, the Trustee will mail to the holder of such Note a notice (the
'Reset Notice') setting forth (i) the election of such Issuer to reset the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, (ii) such new interest rate or
such new Spread and/or Spread Multiplier, as the case may be, and (iii) the
provisions, if any, for redemption during the period from such Optional Reset
Date to the next Optional Reset Date or, if there is no such next Optional Reset
Date, to the Stated Maturity of such Note (each such period a 'Subsequent
Interest Period'), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Interest Period. Upon the transmittal by the Trustee of a Reset
Notice to the holder of a Note, such new interest rate or such new Spread and/or
Spread Multiplier, as the case may be, shall take effect automatically, and,
except as modified by the Reset Notice and as described in the next paragraph,
such Note will have the same terms as prior to the transmittal of such Reset
Notice.
Notwithstanding the foregoing, not later than 20 days prior to an Optional
Reset Date for a Note, such Issuer may, at its option, revoke the interest rate,
in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the
case of a Floating Rate Note, provided for in the Reset Notice and establish an
interest rate, in the case of a Fixed Rate Note, or a Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, that is higher than the
interest rate or Spread and/or Spread Multiplier, as the case may be, provided
for in the Reset Notice, for the Subsequent Interest Period commencing on such
Optional Reset Date by causing the Trustee to transmit notice of such higher
interest rate or higher Spread and/or Spread Multiplier, as the case may be, to
the holder of such Note. Such notice shall be irrevocable. All Notes with
respect to which the interest rate or Spread and/or Spread Multiplier is reset
on an Optional Reset Date and with respect to which the holders of such Notes
have not tendered such Notes for repayment (or have validly revoked any such
tender) pursuant to the next succeeding paragraph will bear such higher interest
rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, for the Subsequent Interest
Period.
If such Issuer elects to reset the interest rate or the Spread and/or
Spread Multiplier of a Note as described above, the holder of such Note will
have the option to elect repayment of such Note by such Issuer on any Optional
Reset Date at a price equal to the aggregate principal amount thereof
outstanding on, plus any interest accrued to, such Optional Reset Date. In order
for a Note to be so repaid on an Optional Reset Date, the holder thereof must
follow the procedures set forth below under 'Redemption and Repayment' for
optional repayment, except that the period for delivery of such Note or
notification to the Trustee shall be at least 25 but not more than 35 days prior
to such Optional Reset Date and except that a holder who has tendered a Note for
repayment pursuant to a Reset Notice may, by written notice to the Trustee,
revoke any such tender for repayment until the close of business on the tenth
day prior to such Optional Reset Date.
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EXTENSION OF MATURITY
The Pricing Supplement relating to each Note (other than an Amortizing
Note) will indicate whether the Issuer thereof has the option to extend the
Stated Maturity of such Note for one or more periods (each an 'Extension
Period') up to but not beyond the date (the 'Final Maturity Date') set forth in
such Pricing Supplement. If such Issuer has such option with respect to any Note
(other than an Amortizing Note), the following procedures shall apply, unless
modified as set forth in the applicable Pricing Supplement.
Such Issuer may exercise such option with respect to a Note (other than an
Amortizing Note) by notifying the Trustee of such exercise at least 50 but not
more than 60 days prior to the Stated Maturity of such Note in effect prior to
the exercise of such option (the 'Original Stated Maturity'). No later than 40
days prior to the Original Stated Maturity, the Trustee will mail to the holder
of such Note a notice (the 'Extension Notice') relating to such Extension
Period, setting forth (i) the election of such Issuer to extend the Original
Stated Maturity, (ii) the new Stated Maturity, (iii)in the case of a Fixed Rate
Note, the interest rate applicable to the Extension Period or, in the case of a
Floating Rate Note, the Spread and/or Spread Multiplier applicable to the
Extension Period and (iv) the provisions, if any, for redemption during the
Extension Period, including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
the Extension Period. Upon the transmittal by the Trustee of an Extension Notice
to the holder of a Note, the Original Stated Maturity shall be extended
automatically, and, except as modified by the Extension Notice and as described
in the next paragraph, such Note will have the same terms as prior to the
transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the Original
Stated Maturity for a Note, such Issuer may, at its option, revoke the interest
rate, in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier,
in the case of a Floating Rate Note, provided for in the Extension Notice and
establish an interest rate, in the case of a Fixed Rate Note, or a Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, that is higher than the
interest rate or Spread and/or Spread Multiplier, as the case may be, provided
for in the Extension Notice, for the Extension Period by causing the Trustee to
transmit notice of such higher interest rate or higher Spread and/or Spread
Multiplier, as the case may be, to the holder of such Note. Such notice shall be
irrevocable. All Notes with respect to which the Stated Maturity is extended and
with respect to which the holders of such Notes have not tendered such Notes for
repayment (or have validly revoked any such tender) pursuant to the next
succeeding paragraph will bear such higher interest rate, in the case of a Fixed
Rate Note, or higher Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, for the Extension Period.
If the Issuer thereof elects to extend the Stated Maturity of a Note, the
holder of such Note will have the option to elect repayment of such Note by such
Issuer on the Original Stated Maturity at a price equal to the aggregate
principal amount thereof outstanding plus any accrued interest to such date. In
order for a Note to be so repaid on the Original Stated Maturity, the holder
thereof must follow the procedures set forth below under 'Redemption and
Repayment' for optional repayment, except that the period for delivery of such
Note or notification to the Trustee shall be at least 25 but not more than 35
days prior to the Original Stated Maturity and except that a holder who has
tendered a Note for repayment pursuant to an Extension Notice may, by written
notice to the Trustee, revoke any such tender for repayment until the close of
business on the tenth day prior to the Original Stated Maturity.
RENEWABLE NOTES
The Issuers may from time to time offer Notes which will mature on an
Interest Payment Date specified in the applicable Pricing Supplement occurring
in or prior to the twelfth month following the original Issue Date of such Notes
(the 'Initial Maturity Date') unless the term of all or any portion of any such
Note (a 'Renewable Note') is renewed in accordance with the procedures described
below.
On the Interest Payment Date occurring in the sixth month (unless a
different interval (the 'Special Election Interval') is specified in the
applicable Pricing Supplement) prior to the Initial Maturity Date of a Renewable
Note (the 'Initial Renewal Date') and on the Interest Payment Date occurring in
each sixth month (or in the last month of each Special Election Interval) after
such Initial Renewal Date (each, together with the Initial Renewal Date, a
'Renewal Date'), the term of such Renewable Note may be extended to the Interest
Payment Date occurring in the twelfth month (or, if a Special Election Interval
is specified in the applicable Pricing
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Supplement, the last month in a period equal to twice the Special Election
Interval) after such Renewal Date, if the holder of such Renewable Note elects
to extend the term of such Renewable Note or any portion thereof as described
below. If a holder does not elect to extend the term of any portion of the
principal amount of a Renewable Note during the specified period prior to any
Renewal Date, such portion will become due and payable on the Interest Payment
Date occurring in the sixth month (or the last month in the Special Election
Interval) after such Renewal Date (the 'New Maturity Date').
A holder of a Renewable Note may elect to renew the term of such Renewable
Note, or if so specified in the applicable Pricing Supplement, any portion
thereof, by delivering a notice to such effect to the Trustee (or any duly
appointed paying agent) at the Corporate Trust Office not less than 15 nor more
than 30 days prior to such Renewal Date (unless another period is specified in
the applicable Pricing Supplement as the 'Special Election Period'). Such
election will be irrevocable and will be binding upon each subsequent holder of
such Renewable Note. An election to renew the term of a Renewable Note may be
exercised with respect to less than the entire principal amount of such
Renewable Note only if so specified in the applicable Pricing Supplement and
only in such principal amount, or any integral multiple in excess thereof, as is
specified in the applicable Pricing Supplement. Notwithstanding the foregoing,
the term of the Renewable Notes may not be extended beyond the Stated Maturity
specified for such Renewable Notes in the applicable Pricing Supplement.
If the holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee (or any duly appointed paying agent) and, with respect
to a Renewable Note that is a certificate issued in definitive form, as soon as
practicable following receipt of such Renewable Note the Trustee (or any duly
appointed paying agent) shall issue in exchange therefor in the name of such
holder (i) a Note, in a principal amount equal to the principal amount of such
exchanged Renewable Note for which no election to renew the term thereof was
exercised, with terms identical to those specified on such Renewable Note
(except that such Note shall have a fixed, nonrenewable Stated Maturity on the
New Maturity Date) and (ii) if an election to renew is made with respect to less
than the full principal amount of such holder's Renewable Note, a replacement
Renewable Note, in a principal amount equal to the principal amount of such
exchanged Renewable Note for which the election to renew was made, with terms
identical to such exchanged Renewable Notes.
COMBINATION OF PROVISIONS
If so specified in the applicable Pricing Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under 'Subsequent Interest Periods,' 'Extension of Maturity' and
'Renewable Notes.'
REDEMPTION AND REPAYMENT
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable, in whole or in part, at the option of the Issuer thereof on a date
or dates specified prior to such Stated Maturity at a price or prices, set forth
in the applicable Pricing Supplement, together with accrued interest to the date
of redemption. Unless otherwise specified in the applicable Pricing Supplement,
the Notes, other than Amortizing Notes, will not be subject to any sinking fund.
An Issuer may redeem any of the Notes that are redeemable and remain
outstanding, either in whole or from time to time in part, upon not less than 30
nor more than 60 days' notice. Unless otherwise specified in the applicable
Pricing Supplement, if less than all of the Notes with like tenor and terms are
to be redeemed, the Notes to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid at the option of the holder prior to its Stated Maturity
or that such Note will be repayable at the option of the holder thereof on a
date or dates specified prior to its Stated Maturity at a price or prices set
forth in the applicable Pricing Supplement, together with accrued interest to
the date of repayment.
Unless otherwise specified in the applicable Pricing Supplement, in order
for a Note to be repaid at the option of the holder thereof, the Issuer thereof
must receive at least 30 days but not more than 45 days prior to the repayment
date the Note with the form entitled 'Option to Elect Repayment' on the reverse
of or otherwise accompanying the Note duly completed. Exercise of the repayment
option by the holder of a Note shall be irrevocable, except as otherwise
described above under 'Description of Notes--Subsequent Interest Periods'
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and 'Description of Notes--Extension of Maturity.' The repayment option may be
exercised by the holder of a Note for less than the aggregate principal amount
of the Note then outstanding provided that the principal amount of the Note
remaining outstanding after repayment is an authorized denomination.
With respect to a Global Security, the Depositary's nominee will be the
holder of such Global Security and therefore will be the only entity that can
exercise a right to repayment. See 'Description of Notes--Book-Entry Notes'
below. In order to ensure that the Depositary's nominee will timely exercise a
right to repayment with respect to a particular beneficial interest in a Global
Security, the beneficial owner of such interest must instruct the broker or
other direct or indirect participant through which it holds a beneficial
interest in such Global Security to notify the Depositary of its desire to
exercise a right to repayment. Different firms have different cut-off times for
accepting instructions from their customers and, accordingly, each beneficial
owner should consult the broker or other direct or indirect participant through
which it holds an interest in a Global Security in order to ascertain the
cut-off time by which such an instruction must be given in order for timely
notice to be delivered to the Depositary.
Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is a
Discount Note, the amount payable on such Note in the event of redemption or
repayment prior to its Stated Maturity will be the Amortized Face Amount of such
Note, as specified in the applicable Pricing Supplement, as of the date of
redemption or repayment, as the case may be.
REPURCHASE
The Issuers may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by any such Issuer may, at its
discretion, be held or resold or may be surrendered to the Trustee for
cancelation.
OTHER PROVISIONS
Any provisions with respect to the determination of an interest rate basis,
the specification of an interest rate basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified under 'Other Provisions' on the face of such Note, or in an
addendum relating thereto if so specified on the face thereof, and in the
applicable Pricing Supplement.
BOOK-ENTRY NOTES
Global Securities will be deposited with, or on behalf of, the Depositary
and registered in the name of the Depositary's nominee. Except as set forth
below, a Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor of the Depositary or a nominee of such successor.
Unless otherwise specified in the applicable Pricing Supplement, DTC will be the
Depositary.
Principal and interest payments on the Notes represented by one or more
Global Securities will be made by the Issuer thereof to the Depositary or its
nominee, as the case may be, as the registered owner of the related Global
Security or Securities. Each Issuer expects that the Depositary or its nominee,
upon receipt of any payment of principal or interest in respect of Global
Securities, will credit immediately the accounts of the related participants
with payment in amounts proportionate to their respective holdings in principal
amount of beneficial interests in such Global Securities as shown on the records
of the Depositary. None of the Issuers, the Guarantor, the Trustee or any Paying
Agent will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of
Global Securities, or for maintaining, supervising or reviewing any records
relating to such beneficial interests. Each Issuer also expects that payments by
participants to owners of beneficial interests in Global Securities held through
such participants will be governed by standing customer instructions and
customary practices, as is the case with securities registered in 'street name.'
Such instructions will be the responsibility of such participants.
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If an issue of Notes is denominated in a currency other than the U.S.
dollar, the Issuer thereof will make payments of principal and any interest in
the currency in which the Notes are denominated (the 'foreign currency') or in
U.S. dollars. DTC has elected to have all such payments of principal and
interest in U.S. dollars unless notified by any of its participants through
which an interest in the Notes is held that it elects, in accordance with and to
the extent permitted by the applicable Pricing Supplement and the Note, to
receive such payment of principal or interest in the foreign currency. On or
prior to the third Business Day after the record date for payment of interest
and twelve days prior to the date for payment of principal, such participant
shall notify DTC of (i) its election to receive all, or the specified portion,
of such payment in the foreign currency and (ii) its instructions for wire
transfer of such payment to a foreign currency account.
DTC will notify the Paying Agent on or prior to the fifth Business Day
after the record date for payment of interest and ten days prior to the date for
payment of principal of the portion of such payment to be received in the
foreign currency and the applicable wire transfer instructions, and the Paying
Agent shall use such instructions to pay the participants directly. If DTC does
not so notify the Paying Agent, it is understood that only U.S. dollar payments
are to be made. The Paying Agent shall notify DTC on or prior to the second
Business Day prior to the payment date of the conversion rate to be used and the
resulting U.S. dollar amount to be paid per $1,000 face amount. In the event
that the Paying Agent's quotation to convert the foreign currency into U.S.
dollars is not available, the Paying Agent shall notify DTC's Dividend
Department that the entire payment is to be made in the foreign currency. In
such event, DTC will ask its participants for payment instructions and forward
such instructions to the Paying Agent and the Paying Agent shall use such
instructions to pay the participants directly.
A further description of the Depositary's procedures with respect to Global
Securities is set forth in the accompanying Prospectus under 'Description of
Debt Securities and Company Guarantees--Global Securities.'
S-25
<PAGE>
IMPORTANT CURRENCY EXCHANGE INFORMATION
Each purchaser of a Note is required to pay for such Note in the Specified
Currency thereof. Currently, there are limited facilities in the United States
for conversion of U.S. dollars into foreign currencies and vice versa, and banks
do not generally offer non-U.S. dollar checking or savings account facilities in
the United States. However, if requested by a prospective purchaser of Notes
denominated in a Specified Currency other than U.S. dollars, the Agent will
arrange for the conversion of U.S. dollars into such Specified Currency to
enable the purchaser to pay for such Notes. Such request must be made on or
before the fifth Business Day preceding the date of delivery of the Notes, or by
such other date as is determined by the Agent. Each such conversion will be made
by the Agent on such terms and subject to such conditions, limitations and
charges as the Agent may from time to time establish in accordance with its
regular foreign exchange practice. All costs of any such exchange will be borne
by the purchasers of the Notes requesting such conversion.
FOREIGN CURRENCY RISKS
GOVERNING LAW AND JUDGMENTS
The Notes will state that they will be governed by and construed in
accordance with the laws of the State of New York. Courts in the United States
have not customarily rendered judgments for money damages denominated in any
currency other than the U.S. dollar. The Judiciary Law of the State of New York
provides, however, that judgment rendered in an action based upon an obligation
denominated in a currency other than U.S. dollars will be rendered in the
foreign currency of the underlying obligation and converted into U.S. dollars at
a rate of exchange prevailing on the date of the entry of the judgment or
decree.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in a Specified Currency other
than U.S. dollars ('Foreign Currency Notes') entails significant risks that are
not associated with a similar investment in a security denominated in U.S.
dollars. Similarly, an investment in a Currency Indexed Note entails significant
risks that are not associated with a similar investment in non-Indexed Notes.
Such risks include, without limitation, the possibility of significant market
changes in rates of exchange between U.S. dollars and such Specified Currency
(or, in the case of each Currency Indexed Note, the rate of exchange between the
Denominated Currency and the Indexed Currency for such Currency Indexed Note),
the possibility of significant changes in rates of exchange between U.S. dollars
and such Specified Currency (or, in the case of each Currency Indexed Note,
changes in rates of exchange between the Denominated Currency and the Indexed
Currency for such Currency Indexed Note) resulting from official redenomination
with respect to such Specified Currency (or, in the case of each Currency
Indexed Note, with respect to the Denominated Currency or the Indexed Currency
therefor) and the possibility of the imposition or modification of foreign
exchange controls by either the United States or foreign governments. Such risks
generally depend on factors over which the Issuers have no control, such as
economic and political events, and on the supply of and demand for the relevant
currencies. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies, and between certain foreign currencies and other
foreign currencies, have been volatile, and such volatility may be expected in
the future. Fluctuations that have occurred in any particular exchange rate in
the past are not necessarily indicative, however, of fluctuations that may occur
in the rate during the term of any Foreign Currency Note or any Currency Indexed
Note. Depreciation of the Specified Currency of a Foreign Currency Note against
U.S. dollars would result in a decrease in the effective yield of such Foreign
Currency Note below its coupon rate and, in certain circumstances, could result
in a loss to the investor on a U.S. dollar basis. Similarly, depreciation of the
Denominated Currency with respect to a Currency Indexed Note against the
applicable Indexed Currency would result in the principal amount payable with
respect to such Currency Indexed Note at the date of Maturity being less than
the Face Amount of such Currency Indexed Note which, in turn, would decrease the
effective yield of such Currency Indexed Note below its stated interest rate and
could also result in a loss to the investor. See 'Description of Notes--Currency
Indexed Notes.'
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency (other than U.S. dollars) at the time of
S-26
<PAGE>
payment of principal of, or premium, if any, or interest on, a Foreign Currency
Note. There can be no assurance that exchange controls will not restrict or
prohibit payments of principal (and premium, if any) or interest in any such
Specified Currency. Even if there are no actual exchange controls, it is
possible that such Specified Currency would not be available to the Issuer
thereof when payments on such Note are due because of circumstances beyond the
control of such Issuer. In any such event, such Issuer will make required
payments in U.S. dollars on the basis described herein. See 'Description of
Notes--Payment Currency' and 'Description of Notes--Currency Indexed
Notes--Payment of Principal and Interest.'
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT, AND ANY
PRICING SUPPLEMENT WILL NOT, DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES
DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A CURRENCY
OR COMPOSITE CURRENCY OTHER THAN U.S. DOLLARS, AND THE ISSUERS DISCLAIM ANY
RESPONSIBILITY TO ADVISE PROSPECTIVE INVESTORS OF SUCH RISKS AS THEY EXIST AT
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO
TIME. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN SUCH NOTES. SUCH NOTES ARE
NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT
TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise specified in the applicable Pricing Supplement, no Foreign
Currency Note will be sold in or to residents of the country issuing the
Specified Currency of such Foreign Currency Note. The information set forth in
this Prospectus Supplement is directed to prospective purchasers who are United
States residents, and the Issuers disclaim any responsibility to advise
prospective purchasers who are residents of countries other than the United
States with respect to any matters that may affect the purchase, holding or
receipt of payments of principal (and premium, if any) or interest on such
Foreign Currency Notes. Such persons should consult their own counsel with
regard to such matters.
Pricing Supplements relating to Foreign Currency Notes or Currency Indexed
Notes will contain information concerning historical exchange rates for the
applicable Specified Currency or Denominated Currency against the U.S. dollar or
other relevant currency (including, in the case of Currency Indexed Notes, the
applicable Indexed Currency), a description of such currency or currencies and
any exchange controls affecting such currency or currencies. The information
therein concerning exchange rates is furnished as a matter of information only
and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
CERTAIN FEDERAL TAX CONSEQUENCES
The following is a summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes as of the
date hereof. It deals only with Notes held as capital assets and does not deal
with persons in special tax situations, such as financial institutions,
insurance companies, tax-exempt organizations, dealers in securities or
currencies, persons holding Notes as a hedge against currency risks or as a
position in a 'straddle' for tax purposes, or persons whose functional currency
is not the U.S. dollar. It also does not deal with state, local or foreign tax
consequences or with holders other than original purchasers. This summary is
based upon the provisions of the Code and regulations, rulings and judicial
decisions thereunder as of the date hereof, which authorities may be repealed,
revoked or modified, possibly with retroactive effect, so as to result in
Federal income tax consequences different from those discussed below.
Persons considering the purchase of the Notes should consult their tax
advisors concerning the application of United States Federal income tax laws to
their particular situations as well as any consequences arising under the laws
of any state, local or foreign taxing jurisdiction. The material Federal income
tax consequences of Indexed Notes, Currency Indexed Notes, Dual Currency Notes,
or Notes containing terms that result in consequences other than those described
below will be addressed in the applicable pricing supplement.
As used herein, the term 'U.S. Holder' means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an
S-27
<PAGE>
estate or trust the income of which is subject to United States Federal income
taxation regardless of its source. As used herein, the term 'non-U.S. Holder'
means a holder of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest on the Notes
Interest paid on a Note (whether in U.S. dollars or in other than U.S.
dollars) that is not a Discount Note (as defined below) will generally be
taxable to a U.S. Holder as ordinary interest income at the time it accrues or
is received, in accordance with the U.S. Holder's method of accounting for
Federal income tax purposes.
Discount Notes
The following discussion is a summary of the principal United States
Federal income tax consequences of the ownership and disposition of Discount
Notes (as defined below) by U.S. Holders, which is based upon certain Treasury
regulations issued on January 27, 1994 (the 'OID Regulations'). Additional rules
applicable to Discount Notes that are denominated in a Specified Currency (as
defined below) other than the U.S. dollar, or have payments of interest or
principal determined by reference to the value of one or more currencies or
currency units other than the U.S. dollar, are described under 'Foreign Currency
Notes'below.
Under the OID Regulations, a Note with an 'issue price' that is less than
its 'stated redemption price at maturity' generally will carry original issue
discount ('OID') for United States Federal income tax purposes (a 'Discount
Note'), unless such difference is less than a specified de minimis amount. In
general, the stated redemption price at maturity of a Discount Note is the total
of all payments required to be made under the Discount Note other than
'qualified stated interest' payments. 'Qualified stated interest' is stated
interest that is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually at a single fixed rate of interest.
In addition, qualified stated interest includes stated interest with respect to
a variable rate debt instrument that is unconditionally payable at least
annually at a single qualified floating rate or a rate that is determined using
a single fixed formula based on one or more qualified floating rates.
A U.S. Holder of Discount Notes is required to include qualified stated
interest in income at the time it is received or accrued, in accordance with
such holder's method of accounting. In addition, U.S. Holders of Discount Notes
that mature more than one year from the date of issuance will be required to
include OID in income for United States Federal income tax purposes as it
accrues, in accordance with a constant yield method, before the receipt of cash
payments attributable to such income, but such holders will not be required to
include separately in income cash payments received on such Notes, even if
denominated as interest, to the extent they do not constitute qualified stated
interest.
All stated interest on a Note that matures one year or less from its date
of issuance (a 'short-term Discount Note') is included in its stated redemption
price at maturity. In general, a U.S. Holder who uses the cash method of tax
accounting is not required to accrue OID on a short-term Discount Note unless
such holder elects to do so. U.S. Holders who report income on the accrual
method, cash method U.S. Holders who elect to include OID on short-term Discount
Notes in income, and certain other holders, including banks and dealers in
securities, are required to include OID (or, alternatively, acquisition
discount) on such short-term Discount Notes on a straight-line basis, unless an
election is made to accrue the OID according to a constant yield method. In the
case of a U.S. Holder who is not required, and does not elect, to include OID in
income currently, (i) any gain realized on the sale, exchange or retirement of a
short-term Discount Note will be ordinary interest income to the extent of the
OID accrued on a straight-line basis (or, alternatively, upon election, under
the constant yield method) through the date of sale, exchange or retirement and
(ii) such U.S. Holder will be required to defer the deduction of all or a
portion of any interest paid on indebtedness incurred to purchase short-term
Discount Notes until a corresponding amount of OID is included in such holder's
income.
U.S. Holders are permitted to elect to include all interest on a Note,
including stated interest, acquisition discount, OID, de minimis OID, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium, under a constant yield method.
U.S. Holders considering such an election should consult their tax advisor.
S-28
<PAGE>
Market Discount and Acquisition Premium
A Note (other than a Discount Note) purchased for an amount that is less
than its stated redemption price at maturity or, in the case of a Discount Note,
its adjusted issue price, will have 'market discount' equal to such difference,
which generally will be taxable as ordinary income upon disposition of such Note
(unless such difference is less than a specified de minimis amount). A Discount
Note purchased for an amount that is greater than its adjusted issue price, but
less than or equal to the sum of all amounts payable on the Note after the
purchase date (other than qualified stated interest), will have 'acquisition
premium' equal to such excess, which reduces the OID with respect to such Note
for any taxable year by a certain fraction.
Amortizable Bond Premium
A Note purchased for an amount greater than its stated redemption price at
maturity will have 'amortizable bond premium' equal to such excess, which a U.S.
Holder may elect to amortize, using a constant yield method. However, if the
Note may be optionally redeemed at a price in excess of its stated redemption
price at maturity, special rules would apply which could result in a deferral of
the amortization of some bond premium until later in the term of the Note.
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or retirement of a Note, a U.S. Holder generally
will recognize taxable gain or loss equal to the difference between the amount
realized and such holder's adjusted tax basis in the Note, except to the extent
attributable to accrued interest. A U.S. Holder's adjusted tax basis in a Note
generally will equal the cost of the Note to such holder, increased by the
amounts of any market discount, OID and de minimis OID previously included in
income by the holder with respect to such Note and reduced by any amortized bond
premium and any principal payments received by the U.S. Holder and, in the case
of a Discount Note, by the amounts of any other payments that do not constitute
qualified stated interest.
Foreign Currency Notes
The following discussion summarizes the principal United States Federal
income tax consequences to a U.S. Holder of the ownership and disposition of
certain Notes (other than Indexed Notes, Currency Indexed Notes and Dual
Currency Notes) that are denominated in a Specified Currency other than the U.S.
dollar or the payments of interest or principal on which are payable in one or
more currencies or currency units other than the U.S. dollar (a 'Foreign
Currency Note'). Such Foreign Currency Notes also may be subject to the rules
discussed above regarding original issue discount, market discount, acquisition
premium, etc. The summary generally is based upon certain Treasury regulations
issued pursuant to Section 988 of the Code on March 16, 1992 (the 'Section 988
Regulations').
Payments of Interest on Foreign Currency Notes
Cash Method. A U.S. Holder who uses the cash method of accounting for
Federal income tax purposes and who receives a payment of qualified stated
interest on a Foreign Currency Note will be required to include in income the
U.S. dollar value of the foreign currency payment (determined at the spot rate
on the date such payment is received or paid) regardless of whether the payment
is in fact converted to U.S. dollars at that time, and such U.S. dollar value
will be the U.S. Holder's tax basis in such foreign currency. No exchange gain
or loss will be recognized with respect to the receipt of such payment.
Accrual Method. A U.S. Holder who uses the accrual method of accounting for
Federal income tax purposes, or who otherwise is required to accrue interest
prior to receipt (e.g., under the OID rules), will be required to include in
income the U.S. dollar value of the amount of interest income (including OID (as
adjusted for acquisition premium, if any) or market discount and reduced by
amortizable bond premium to the extent applicable) that has accrued and is
otherwise required to be taken into account with respect to a Foreign Currency
Note during an accrual period. The U.S. dollar value of such accrued income will
be determined by translating such income at the average rate of exchange for the
accrual period or, with respect to an accrual period that spans two taxable
years, at the average rate for the partial period within the taxable year. A
U.S. Holder may elect, however, to translate such accrued interest income using
the rate of exchange on the last day of the accrual period
S-29
<PAGE>
or, with respect to an accrual period that spans two taxable years, using the
rate of exchange on the last day of the taxable year. A U.S. Holder will
recognize exchange gain or loss (which will be treated as ordinary income or
loss) with respect to accrued interest income on the date such income is
received equal to the difference, if any, between the U.S. dollar value of the
foreign currency received (determined on the date payment is received) in
respect of such accrual period and the U.S. dollar value of interest income that
has accrued during such accrual period (as determined above).
Rules similar to those described above apply in the case of OID, market
discount and amortizable bond premium.
Sale, Exchange or Retirement of Foreign Currency Notes
A U.S. Holder will have a tax basis in any foreign currency received on the
sale, exchange or retirement of a Foreign Currency Note equal to the U.S. dollar
value of such foreign currency, determined at the time of such sale, exchange or
retirement. Any gain or loss realized by a U.S. Holder on a sale or other
disposition of foreign currency (including its exchange for U.S. dollars or its
use to purchase Foreign Currency Notes) will be ordinary income or loss.
A U.S. Holder's tax basis in, and amount realized on the sale of, a Foreign
Currency Note, and the amount of any subsequent adjustment to the holder's tax
basis, will be the U.S. dollar value of the foreign currency amount paid for
such Foreign Currency Note, or of the foreign currency amount of the adjustment,
determined on the date of such purchase or adjustment.
Gain or loss realized upon the sale, exchange or retirement of a Foreign
Currency Note will be ordinary income or loss to the extent it is attributable
to fluctuations in currency exchange rates.
Backup Withholding and Information Reporting
Under current Federal income tax law, information reporting and a 31%
backup withholding tax are required with respect to certain interest and
principal payments made to, and the proceeds of sales before maturity by,
certain holders (other than corporations) if such persons fail to supply
taxpayer identification numbers and other information. Amounts withheld under
the backup withholding rules would be allowed as a refund or a credit against
the U.S. Holder's Federal income tax provided that the required information is
furnished to the Internal Revenue Service (the 'Service').
NON-U.S. HOLDERS
A non-U.S. Holder will generally not be subject to United States Federal
income taxes, including withholding taxes, on payments of principal, premium, if
any, or interest (including OID, if any) on a Note or coupon, or any gain
arising from the sale or disposition of a Note or coupon, provided that (i) any
such income is not effectively connected with the conduct of a trade or business
within the U.S., (ii) such non-U.S. Holder is not a person who owns (directly or
by attribution) ten percent or more of the total combined voting power of all
classes of stock of the Issuer thereof, (iii) with respect to any gain, such
non-U.S. Holder (if an individual) is not present in the U.S. 183 days or more
during the taxable year of the disposition and does not have a 'tax home' (as
defined in section 911(d)(3) of the Code) in the U.S. and (iv) required
certification of the non-U.S. status of the beneficial owner is provided to such
Issuer or its agents.
The 31% 'backup' withholding and information reporting requirements will
generally not apply to payments by the applicable Issuer or its agents of
principal, premium, if any, and interest on a Note, and to proceeds of the sale
or redemption of a Note before maturity, with respect to a non-U.S. Holder that
provides such Issuer or its agent with the certification of non-U.S. status.
Non-U.S. Holders of Notes should consult their tax advisors regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption therefrom, and the procedure for
obtaining such an exemption, if available. Any amounts withheld from a payment
to a non-U.S. Holder under the backup withholding rules will be allowed as a
credit against such holder's United States Federal income tax liability and may
entitle such holder to a refund, provided that the required information is
furnished to the Service.
S-30
<PAGE>
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Issuers through
the Agents, each of which has agreed to use reasonable efforts to solicit
purchases of the Notes. Each Issuer also may sell Notes to the Agents, as
principal. Unless otherwise indicated in the applicable Pricing Supplement, a
Note sold to an Agent as principal will be purchased by such Agent at a price
equal to 100% of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a note of identical maturity. Such
Notes may be resold to investors and other purchasers from time to time at
market prices prevailing at the time of sale, at prices related to such
prevailing prices, at a fixed price or prices, which may be changed, or at
negotiated prices. The Agents may sell Notes that they have purchased as
principal to other dealers and such Notes may be sold at a discount which,
unless otherwise specified in the applicable Pricing Supplement, will not exceed
the discount to be received by the Agents from the Issuer thereof. Each Issuer
reserves the right to sell Notes directly on its own behalf, by itself or
through an affiliate, in those jurisdictions where authorized to do so. Notes
also may be offered through other agents, which offerings will be on
substantially the same terms and conditions as those described above for
offerings through the Agents. In such case, the names of the other agents and
any terms of such agency which differ from those described herein will be set
forth in a Pricing Supplement. The applicable Issuer will have the sole right to
accept offers to purchase Notes and may reject any proposed purchase of Notes in
whole or in part. Each Agent will have the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes through it in whole or in
part. The Issuers will pay the Agents a commission in the form of a discount
ranging from 0.125% to 0.750% of the principal amount of Notes sold through them
depending upon Note maturity. The commission payable by an Issuer to the Agents
with respect to Notes with maturities of 30 years or more will be negotiated at
the time such Issuer issues such Notes. No commission will be payable on any
sales made directly by any Issuer.
Payment of the purchase price of the Notes will be required to be made in
immediately available funds in New York City on the date of settlement.
The Agents may be deemed to be 'underwriters' within the meaning of the
Securities Act of 1933, as amended (the 'Securities Act'). The Issuers have
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Securities Act, or to contribute to the payments the
Agents may be required to make in respect thereof, and will reimburse the Agents
for certain legal and other expenses incurred by them in connection with the
offer and sale of the Notes.
The Agents have advised the Issuers that they may make a market in the
Notes as permitted by applicable laws and regulations; however, the Agents are
not obligated to do so. There can be no assurance that there will be a secondary
market for the Notes.
Concurrently with the offering of Notes through the Agents as described
herein, any Issuer may issue other Debt Securities pursuant to the Indenture
referred to in the Prospectus.
In the ordinary course of their respective businesses, the Agents and their
affiliates have in the past provided, and may in the future provide, investment
banking, commercial banking and other services to each of the Issuers and its
affiliates. Chase Securities Inc. is an affiliate of The Chase Manhattan Bank
and Chase Bank of Texas, N.A. which are lenders to the Company under the
Company's credit facilities, and to the extent the proceeds of the offering of
the Notes are used for the repayment of borrowings under the Company's credit
facilities, will each receive its proportionate share of any repayment by the
Company of any amounts outstanding under such facilities from the proceeds of
the offering of the Notes.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Mark L. Jones, Managing Senior Counsel of the Company and for the
Agents by Cravath, Swaine & Moore, New York, New York. Cravath, Swaine & Moore
has from time to time acted as counsel for the Company and may do so in the
future.
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<PAGE>
SUBJECT TO COMPLETION DATED AUGUST 25, 1998
$1,000,000,000
[LOGO] UNION PACIFIC RESOURCES GROUP INC.
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK,
WARRANTS, STOCK PURCHASE CONTRACTS, STOCK PURCHASE UNITS
UNION PACIFIC RESOURCES INC.
UPR CAPITAL COMPANY
DEBT SECURITIES GUARANTEED BY
UNION PACIFIC RESOURCES GROUP INC.
UPRG CAPITAL TRUST I
UPRG CAPITAL TRUST II
UPRG CAPITAL TRUST III
TRUST PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED BY UNION PACIFIC RESOURCES GROUP INC.
------------------------
Union Pacific Resources Group Inc., a Utah corporation (the 'Company'), may
issue from time to time, together or separately, (i) unsecured senior debt
securities (the 'Company Senior Debt Securities'), (ii) unsecured subordinated
debt securities (the 'Company Subordinated Debt Securities' and, together with
the Company Senior Debt Securities, the 'Company Debt Securities'), (iii)
warrants to purchase Company Senior Debt Securities (the 'Debt Warrants'), (iv)
shares of preferred stock, without par value, of the Company (the 'Preferred
Stock'), (v) warrants to purchase shares of Preferred Stock (the 'Preferred
Stock Warrants'), (vi) shares of common stock, without par value, of the Company
(the 'Common Stock'), (vii) warrants to purchase shares of Common Stock (the
'Common Stock Warrants'), (viii) stock purchase contracts ('Stock Purchase
Contracts') to purchase shares of Common Stock or Preferred Stock and (ix) stock
purchase units ('Stock Purchase Units'), each representing ownership of a Stock
Purchase Contract and Debt Securities (as defined), debt obligations of the
United States of America or agencies or instrumentalities thereof ('US
Obligations') or Trust Preferred Securities (as defined below), securing the
holder's obligation to purchase shares of Common Stock or Preferred Stock under
the Stock Purchase Contract, in amounts, at prices and on terms to be determined
by market conditions at the time of offering. The Debt Warrants, Preferred Stock
Warrants and Common Stock Warrants are referred to herein collectively as the
'Warrants', and the Company Debt Securities, Preferred Stock, Common Stock,
Warrants, Stock Purchase Contracts, Stock Purchase Units, Company Guarantees and
Trust Guarantees are referred to herein collectively as the 'Company
Securities'.
Union Pacific Resources Inc., an Alberta corporation ('UPRI'), and UPR Capital
Company, a Nova Scotia unlimited liability company ('UPR Capital Company'), may
issue from time to time, together or separately (i) non-convertible unsecured
senior debt securities (the 'Subsidiary Senior Debt Securities', together with
the Company Senior Debt Securities, the 'Senior Debt Securities') and (ii)
non-convertible unsecured subordinated debt securities (the 'Subsidiary
Subordinated Debt Securities', together with the Subsidiary Senior Debt
Securities, the 'Subsidiary Debt Securities'; the Subsidiary Subordinated Debt
Securities, together with the Company Subordinated Debt Securities, the
'Subordinated Debt Securities'; the Subsidiary Debt Securities together with the
Company Debt Securities, the 'Debt Securities'). The Subsidiary Debt Securities
will be irrevocably and unconditionally guaranteed (the 'Company Guarantees') by
the Company (in such capacity, the 'Guarantor'), and unless the Prospectus
Supplement otherwise provides, the Company Guarantees will rank pari passu with
all other unsecured and unsubordinated debt of the Company. UPRI and UPR Capital
Company are collectively referred to herein as the 'Subsidiary Issuers' and, the
Company, in its capacity as an issuer, and the Subsidiary Issuers are
collectively referred to herein as the 'Issuers'.
(Continued on following page)
------------------------
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 Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company, the Subsidiary Issuers or the UPRG Trusts
or any dealers or underwriters are involved in the sale of the Offered
Securities in respect of which this Prospectus is being delivered, the names of
such agents, dealers or underwriters and any applicable agent's commission,
dealer's purchase price or underwriter's discount will be set forth in or may be
calculated from the Prospectus Supplement. The net proceeds to the Company, the
Subsidiary Issuers or the UPRG Trusts from such sale will be the purchase price
less such commission in the case of an agent, the purchase price in the case of
a dealer, or the public offering price less such discount in the case of an
underwriter and less, in each case, other attributable issuance expenses. See
'Plan of Distribution'.
This Prospectus may not be used to consummate sales of Offered Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 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[EL] NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PRELIMINARY PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY[EL] 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>
(Continued from previous page)
UPRG Capital Trust I, UPRG Capital Trust II and UPRG Capital Trust III
(each, a 'UPRG Trust' and collectively, the 'UPRG Trusts'), each a statutory
business trust formed under Delaware law, may offer, from time to time,
preferred securities (the 'Trust Preferred Securities') with the payment of
dividends and payments on liquidation or redemption of the Trust Preferred
Securities issued by each such UPRG Trust guaranteed on a subordinated basis by
the Company to the extent described herein and in an accompanying prospectus
supplement (the 'Trust Guarantees'). The Company will be the owner of the trust
interests represented by common securities (the 'Trust Common Securities') to be
issued by each UPRG Trust. Unless indicated otherwise in a prospectus
supplement, each UPRG Trust exists for the sole purpose of issuing its trust
interests and investing the proceeds thereof in Company Subordinated Debt
Securities. The Company Securities, Subsidiary Debt Securities and the Trust
Preferred Securities are referred to herein collectively as the 'Offered
Securities'.
The Offered Securities may be issued in one or more series or issuances and
will be limited to $1,000,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
are issued for one or more foreign currencies or currency units). The Offered
Securities may be sold for U.S. dollars, or any foreign currency or currencies
or currency units, and the principal of, any premium on, and any interest on,
the Debt Securities may be payable in U.S. dollars, or any foreign currency or
currencies or currency units.
The Offered Securities may be offered separately or as units with other
Offered Securities, in separate series in amounts, at prices and on terms to be
determined at or prior to the time of sale. The sale of other securities under
the Registration Statement of which this Prospectus forms a part or under a
Registration Statement to which this Prospectus relates will reduce the amount
of Offered Securities which may be sold hereunder.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the 'Prospectus Supplement'), including, without limitation, where
applicable, (i) in the case of Debt Securities, the identity of the Issuer of
and the specific designation, aggregate principal amount, authorized
denomination, initial offering price, maturity (which may be fixed or
extendible), premium (if any), interest rate (which may be fixed or floating),
time of and method of calculating the payment of interest, if any, the currency
in which principal, premium, if any, and interest, if any, are payable, any
redemption or sinking fund terms, any conversion or exchange provisions and
other specific terms; (ii) in the case of Preferred Stock or Trust Preferred
Securities, the designation, number of shares, liquidation preference per share,
initial public offering price, dividend rate (or method of calculation thereof),
dates on which dividends shall be payable and dates from which dividends shall
accrue, any redemption or sinking fund provisions, any conversion or exchange
provisions and other specific terms; (iii) in the case of Common Stock, the
number of shares and the terms of the offering and sale thereof; (iv) in the
case of Warrants, the number and terms thereof, the designation, description and
the number of securities issuable upon exercise, the exercise price, the terms
of the offering and sale thereof and where applicable, the duration and
detachability thereof; (v) in the case of Stock Purchase Contracts, the
designation and number of shares of Common Stock or Preferred Stock issuable
thereunder, the purchase price of the Common Stock or Preferred Stock, the date
or dates on which the Common Stock or Preferred Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contracts or vice versa, and the terms of the offering and sale thereof; (vi) in
the case of Stock Purchase Units, the specific terms of the Stock Purchase
Contracts and any Debt Securities, U.S. Obligations or Trust Preferred
Securities securing the holder's obligation to purchase the Common Stock or
Preferred Stock under the Stock Purchase Contracts, and the terms of the
offering and sale thereof; and (vii) in the case of all Offered Securities,
whether such Offered Securities will be offered separately or as a unit with
other Offered Securities. The Prospectus Supplement will also contain
information, where applicable, about certain United States Federal income tax
considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by the Prospectus Supplement.
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 and other information with the Securities and Exchange
Commission (the 'Commission') relating to its business, financial position,
results of operations and other matters. Such reports and other information can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at certain of its Regional Offices, located at Northwest Atrium Center
(Suite 1400), 500 West Madison Street, Chicago, Illinois 60661, and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
prescribed rates. Such material can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005. Such material
may also be accessed electronically by means of the Commission's home page on
the Internet (http://www.sec.gov).
The Company, on behalf of the Subsidiary Issuers, and each Subsidiary
Issuer intend to make application to the Commission for an order of the
Commission exempting each Subsidiary Issuer from the reporting requirements of
the Exchange Act. If such order is granted, or the Commission otherwise grants
relief to the Subsidiary Issuers from such reporting requirements, neither of
the Subsidiary Issuers will be subject to the reporting requirements of the
Exchange Act.
No separate financial statements of the Subsidiary Issuers have been
included or incorporated by reference herein. Neither Subsidiary Issuer nor the
Company considers such financial statements material to holders of Subsidiary
Debt Securities because (i) all of the voting securities of each Subsidiary
Issuer will be owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, and (ii) the obligations of each Subsidiary
Issuer under the Subsidiary Debt Securities are fully and unconditionally
guaranteed by the Company to the extent set forth herein. See 'Union Pacific
Resources Inc.', 'UPR Capital Company' and 'Description of Debt Securities and
Company Guarantees--Company Guarantees'.
No separate financial statements of the UPRG Trusts have been included or
incorporated by reference herein. Neither the UPRG Trusts nor the Company
considers such financial statements material to holders of Trust Preferred
Securities because (i) all of the voting securities of each UPRG Trust will be
owned, directly or indirectly, by the Company, a reporting company under the
Exchange Act, (ii) no UPRG Trust has independent operations but rather each
exists for the purpose of issuing securities representing undivided beneficial
interests in the assets of such UPRG Trust and investing the proceeds thereof in
Company Subordinated Debt Securities, and (iii) the obligations of the UPRG
Trusts under the Trust Preferred Securities are fully and unconditionally
guaranteed on a subordinated basis by the Company to the extent set forth
herein. See 'The UPRG Trusts' and 'Description of Trust Preferred Securities and
Trust Guarantees--Trust Guarantees.'
The Company, the Subsidiary Issuers and the UPRG Trusts have filed with the
Commission a joint registration statement (the 'Registration Statement') under
the Securities Act of 1933, as amended (the 'Securities Act'), with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Reference is made to the Registration Statement and to the exhibits relating
thereto for further information with respect to the Company, the Subsidiary
Issuers, the UPRG Trusts and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the year ended December 31, 1997, its Quarterly Reports on Form
10-Q for the quarterly periods ended March 31, 1998 and June 30, 1998, its
Current Reports on Form 8-K dated January 27, 1998, March 17, 1998, March 27,
1998, May 6, 1998, May 26, 1998 and its Current Report on Form 8-K/A dated May
6, 1998 (the 'Norcen 8-K'), all of which have been previously filed with the
Commission under File No. 1-13916, and the description of capital stock of the
Company that is contained in the Registration Statement filed under the Exchange
Act under File No. 1-13916, including all amendments or reports filed for the
purpose of updating such description.
3
<PAGE>
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Offered Securities offered hereby shall be
deemed incorporated herein by reference, and such documents shall be deemed to
be a part hereof from the date of filing such documents. Any statement contained
herein, in a document incorporated or deemed to be incorporated by reference
herein, or in the accompanying Prospectus Supplement, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests should be directed to:
Union Pacific Resources Group Inc., 801 Cherry Street, Fort Worth, Texas 76102,
Attention: Secretary (Telephone 817-877-6000).
THE COMPANY
The Company is engaged primarily in the exploration for and the development
and production of natural gas, natural gas liquids and crude oil in several
major producing basins in the United States, Canada, Guatemala and Venezuela.
The Company emphasizes natural gas in its exploration and production activities
and also owns and operates significant assets, in proximity to its principal
producing properties, dedicated to 'gas value chain' activities, which consist
of the gathering, processing, transportation and marketing of natural gas and
natural gas liquids. In addition, the Company engages in the hard minerals
business through a non-operated joint venture and royalty interests in several
coal and trona (natural soda ash) mines located on lands within and adjacent to
its Land Grant (as defined) holdings in Wyoming. The 'Land Grant' consists of
land granted by the Federal government to a predecessor and former affiliate of
UPR in the mid-1800's which passes through the states of Colorado and Wyoming
and into Utah. UPR has fee ownership of the mineral rights under approximately
7.9 million acres in the Land Grant.
The Company's oil and gas activities are concentrated in five core
geographic areas in the United States and four core geographic areas for
international operations. The core areas in the United States are: (1) the
Austin Chalk trend in Texas and Louisiana, unchanged from the previous
structure, (2) the East/West Texas business unit representing the combination of
the former East Texas and West Texas business units, (3) the Western Region
business unit consisting of the Land Grant area in Colorado, Wyoming and Utah,
as well as additional properties in Kansas, (4) the Gulf Coast Onshore business
unit covering the onshore coastal plain of Texas and Louisiana and (5) the
Offshore business unit, which manages the Company's Gulf of Mexico operations.
International core geographic areas are (1) Canada, (2) Guatemala, (3) Venezuela
and (4) other international. In each of these core areas, the focus of the
Company is on the exploration for and development of natural gas and crude oil
resources, and on efforts to increase margins through reductions in drilling and
operating costs and effective and efficient sales and distribution networks.
The address of the Company is: Union Pacific Resources Group Inc., 801
Cherry Street, Fort Worth, Texas 76102. Telephone: (817) 877-6000.
4
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------ JUNE 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges............................... 41.7 44.4 17.7 9.1 8.1 0.9(a)
</TABLE>
- ------------------
(a) Due to lower earnings, primarily caused by lower hydrocarbon prices and
higher fixed charges resulting from higher interest expense, for the six
months ended June 30, 1998, earnings are insufficient by $10.2 million to
cover fixed charges of the Company.
The ratio of earnings to fixed charges has been computed on a total
enterprise basis. Earnings represent income before the cumulative effect of
accounting changes less equity in undistributed earnings of unconsolidated
affiliates, plus income taxes and fixed charges. Fixed charges represent
interest, amortization of debt discount and expense, and the estimated interest
portion of rental charges.
UNION PACIFIC RESOURCES INC.
UPRI is an indirect wholly owned subsidiary of the Company. The Canadian
assets of the Company are held by UPRI. On January 25, 1998, the Company and
UPRI entered into a pre-acquisition agreement ('Pre-acquisition Agreement') with
Norcen Energy Resources Limited ('Norcen'). Under the Pre-acquisition Agreement,
the Company agreed to cause UPRI to make and UPRI agreed to make an offer to
purchase (the 'tender offer') all of the outstanding common shares of Norcen,
subject to certain conditions. On March 2, 1998, the Company announced the
closing of the tender offer. In total, 95.5 percent of the outstanding common
shares of Norcen were tendered at a purchase price of US$13.65 per share. On
March 5, 1998, UPRI completed the compulsory acquisition of the remaining common
shares outstanding which were not tendered. On April 17, 1998 the amalgamation
of UPRI and Norcen was completed with UPRI taking over Norcen's holdings.
UPRI manages the Company's oil and gas activities in western Canada. With
the acquisition of Norcen the primary areas of activity are the Hatton area in
western Saskatchewan and Two Hills area in eastern Alberta, the Rendy and Cabon
areas in western Alberta and the Gedney area of northeastern British Columbia.
UPRI is also developing light oil production in the Tager and Peace River area
and heavy oil in the Linber and Provolt areas. The principal place of business
of UPRI is 400, 425-1st Street, Calgary, Alberta, Canada T2P 4V4. Telephone:
(403) 231-0111.
UPR CAPITAL COMPANY
UPR Capital Company is a Nova Scotia unlimited liability company
incorporated on March 23, 1998. UPR Capital Company is intended to be used
primarily to finance UPRI's Canadian business operations. The principal place of
business of UPR Capital Company is 400, 425-1st Street, Calgary, Alberta, Canada
T2P 4V4. Telephone: (403) 231-0111.
Under the Companies Act (Nova Scotia), in the event of the winding up or
bankruptcy of UPR Capital Company, Union Pacific Resources Company, a Delaware
corporation and indirect wholly owned subsidiary of the Company ('UPRC'), as
sole owner of all of the outstanding equity of UPR Capital Company, is liable,
subject to certain limited exceptions, to pay those debts and liabilities of UPR
Capital Company that were not specifically contracted on the basis that the
creditor would look only to the assets of UPR Capital Company. UPRC holds
substantially all of the assets of the Company's business.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
Some of the directors and executive officers of UPRI and UPR Capital
Company (and certain of the experts named herein) are citizens or residents of
jurisdictions other than the United States. All or a substantial portion of the
assets of such directors, executive officers and experts residing outside of the
United States and all of the assets of UPRI and UPR Capital Company are or may
be located outside the United States. As a result, it may not be possible to
effect service of process on such directors, executive officers or experts or
UPRI and UPR Capital
5
<PAGE>
Company in the United States or to enforce, collect or realize, in United States
courts, upon judgments that may be obtained against such persons in United
States courts and predicated upon civil liability under United States securities
laws. The Company, UPRI and UPR Capital Company have been advised by Bennett
Jones Verchere, special Canadian counsel to the Company, UPRI and UPR Capital
Company that there is doubt as to the enforceability in Canada, in original
actions or actions for the enforcement of judgments of United States courts, of
civil liabilities predicated solely on United States Federal securities laws.
The indenture pursuant to which the Debt Securities will be issued will provide
that UPRI and UPR Capital Company will appoint the Company as its agent for
service of process in any suit, action or proceeding with respect to such
indenture brought under Federal or state securities laws in any Federal or state
court located in The City of New York, and will submit to such jurisdiction.
THE UPRG TRUSTS
Each of UPRG Capital Trust I, UPRG Capital Trust II and UPRG Capital Trust
III is a statutory business trust formed under Delaware law pursuant to (i) a
separate Declaration of Trust (a 'Declaration') executed by the Company, as
sponsor for such UPRG Trust, and the Trustees (as defined herein) of such trust
and (ii) the filing of a certificate of trust with the Delaware Secretary of
State. Unless an accompanying Prospectus Supplement provides otherwise, each
UPRG Trust exists for the sole purposes of (i) issuing the Trust Preferred
Securities, (ii) investing the gross proceeds of the sale of the Trust Preferred
Securities in a specific series of Company Subordinated Debt Securities and
(iii) engaging in only those other activities necessary or incidental thereto.
All of the Trust Common Securities will be owned by the Company. The Trust
Common Securities will rank pari passu, and payments will be made thereon pro
rata, with the Trust Preferred Securities, except that upon the occurrence and
continuance of an event of default under the applicable Declaration, the rights
of the holders of the applicable Trust Common Securities to payment in respect
of distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the applicable Trust Preferred
Securities. The Company will acquire Trust Common Securities having an aggregate
liquidation amount equal to a minimum of 1% of the total capital of each UPRG
Trust. Each UPRG Trust will have a term of at least 20 but not more than 50
years, but may terminate earlier as provided in the applicable Declaration. Each
UPRG Trust's business and affairs will be conducted by the Trustees. The holder
of the Trust Common Securities will be entitled to appoint, remove or replace
any of, or increase or reduce the number of, the Trustees of each UPRG Trust.
The duties and obligations of the Trustees shall be governed by the Declaration
of such UPRG Trust. At least one of the Trustees of each UPRG Trust will be a
person who is an employee or officer of or who is affiliated with the Company (a
'Regular Trustee'). One Trustee of UPRG Trust will be a financial institution
that is not affiliated with the Company, which shall act as property trustee and
as indenture trustee for the purposes of the Trust Indenture Act of 1939, as
amended (the 'Trust Indenture Act'), pursuant to the terms set forth in a
Prospectus Supplement (the 'Property Trustee'). In addition, unless the Property
Trustee maintains a principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, one Trustee of each UPRG
Trust will be a legal entity having a principal place of business in, or an
individual resident of, the State of Delaware (the 'Delaware Trustee'). The
Company will pay all fees and expenses related to each UPRG Trust and the
offering of the Trust Preferred Securities. Unless otherwise set forth in the
Prospectus Supplement, the Property Trustee will be Chase Bank of Texas, N.A.
('CBT'), and the Delaware Trustee will be The Chase Manhattan Bank, Delaware.
The office of the Delaware Trustee in the State of Delaware is 1201 Market
Street, Wilmington, Delaware 19801. The principal place of business of each UPRG
Trust is c/o Union Pacific Resources Group Inc., 801 Cherry Street, Fort Worth,
Texas 76102. Telephone: (817) 877-6000.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Company Securities and the Subsidiary Debt Securities
offered hereby will be used for general corporate purposes, including repayment
of borrowings, working capital, capital expenditures, stock repurchase programs
and acquisitions. Unless otherwise specified in the Prospectus Supplement, each
UPRG Trust will use all proceeds received from the sale of Trust Preferred
Securities to purchase Company Subordinated Debt Securities. Additional
information on the use of net proceeds from the sale of the Offered Securities
offered hereby may be set forth in the Prospectus Supplement relating to such
Offered Securities.
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES AND COMPANY GUARANTEES
The following description of the terms of the Debt Securities and the
Company Guarantees summarizes certain general terms and provisions of the Debt
Securities and the Company Guarantees to which any Prospectus Supplement may
relate. The particular terms of the Senior Debt Securities, the Subordinated
Debt Securities, the Company Guarantees, any Company Subordinated Debt
Securities issued in connection with Trust Preferred Securities, and the extent,
if any, to which such general provisions may apply to any series of Debt
Securities and Company Guarantees will be described in the Prospectus Supplement
relating to such series and Company Guarantees.
Senior Debt Securities and Company Guarantees may be issued, from time to
time, in one or more series under an Indenture (the 'Senior Indenture'), among
the Company, the Subsidiary Issuers and The Bank of New York ('BONY'), as
trustee, or such other trustee as shall be named in a Prospectus Supplement (the
'Senior Trustee'). Subordinated Debt Securities and Company Guarantees may be
issued, from time to time, in one or more series under an indenture (the
'Subordinated Indenture') among the Company, the Subsidiary Issuers and a
trustee to be identified in the related Prospectus Supplement (the 'Subordinated
Trustee'). The Senior Indenture and the Subordinated Indenture are sometimes
referred to collectively as the 'Indentures,' and the Senior Trustee and the
Subordinated Trustee are sometimes referred to collectively as the 'Debt
Trustees.' The Indentures will be filed with the Commission and incorporated by
reference as an exhibit to the Registration Statement of which this Prospectus
is a part. The following statements are subject to the detailed provisions of
the Indentures. Wherever any particular provisions of the Indentures or terms
defined therein are referred to, such provisions and terms are incorporated by
reference as a part of the statements made herein and such statements are
qualified in their entirety by such references, including the definitions
therein of certain terms. References to particular sections of the Indentures
are noted below. Capitalized terms used herein but not defined herein shall have
the meanings ascribed to them in the Indentures.
GENERAL
The Company will irrevocably and unconditionally guarantee payments of
principal of, premium, if any, and interest, if any, with respect to Subsidiary
Debt Securities.
The Company Senior Debt Securities and Company Guarantees will be unsecured
obligations of the Company and will rank equally and ratably with other
unsecured and unsubordinated debt of the Company, unless the Company shall be
required to secure the Company Senior Debt Securities as described below under
'Covenants--Limitation on Liens and Sale Leaseback Transactions.' The Subsidiary
Senior Debt Securities issued will be unsecured obligations of such Subsidiary
Issuer, and will rank pari passu with all other unsecured and unsubordinated
debt of such Subsidiary Issuer. Under the Companies Act (Nova Scotia), in the
event of the winding up or bankruptcy of UPR Capital Company, UPRC, as sole
owner of all of the outstanding equity of UPR Capital Company, is liable,
subject to certain limited exceptions, to pay those debts and liabilities UPR
Capital Company that were not specifically contracted on the basis that the
creditor would look only to the assets of UPR Capital Company. UPRC holds
substantially all of the assets of the Company's business. The Senior Indenture
does not limit the amount of Senior Debt Securities that can be issued
thereunder. (Section 301) Senior Debt Securities will be issued from time to
time and offered on terms determined by market conditions at the time of sale.
The obligations of any Issuer pursuant to any Subordinated Debt Securities
will be subordinate in right of payment to all Senior Indebtedness of such
Issuer, and will be described in an accompanying Prospectus Supplement. The
Subordinated Indenture will not contain any limitation on the amount of Senior
Indebtedness which may be hereafter incurred by any Issuer.
The Debt Securities may be issued in one or more series with the same or
various maturities, at par, at a premium or at a discount. Any Debt Securities
bearing no interest or interest at a rate which at the time of issuance is below
market rates will be sold at a discount (which may be substantial) from their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such substantially discounted Debt Securities
will be described in the Prospectus Supplement relating thereto.
7
<PAGE>
Reference is made to the Prospectus Supplement for the Issuer of and the
following terms of the Debt Securities offered hereby: (i) the designation,
aggregate principal amount and authorized denominations of such Debt Securities;
(ii) the percentage of their principal amount at which such Debt Securities will
be issued; (iii) the date or dates on which the Debt Securities will mature
(which may be fixed or extendible); (iv) the rate or rates (which may be fixed
or floating) per annum at which the Debt Securities will bear interest, if any,
or the method of determining such rate or rates; (v) the date or dates on which
any such interest will be payable, the date or dates on which payment of any
such interest will commence and the Regular Record Dates for such Interest
Payment Dates; (vi) the terms of any mandatory or optional redemption (including
any provisions for any sinking, purchase or other analogous fund) or repayment
option; (vii) the currency, currencies or currency units for which the Debt
Securities may be purchased and the currency, currencies or currency units in
which the principal thereof, any premium thereon and any interest thereon may be
payable; (viii) if the currency, currencies or currency units for which the Debt
Securities may be purchased or in which the principal thereof, any premium
thereon and any interest thereon may be payable is at the election of the Issuer
thereof or the purchaser, the manner in which such election may be made; (ix) if
the amount of payments on the Debt Securities is determined with reference to an
index based on one or more currencies or currency units, changes in the price of
one or more securities or changes in the price of one or more commodities, the
manner in which such amounts may be determined; (x) the extent to which any of
the Debt Securities will be issuable in temporary or permanent global form, or
the manner in which any interest payable on a temporary or permanent Global
Security will be paid; (xi) the terms and conditions upon which the Debt
Securities may be convertible into or exchanged for Common Stock of the Company,
Preferred Stock of the Company, or indebtedness or other securities of any kind
of the Company; (xii) information with respect to book-entry procedures, if any;
(xiii) a discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations with respect to the Debt Securities;
(xiv) Debt Securities issued by a Subsidiary Issuer will be entitled to the
benefits of the Company Guarantees afforded by the Indenture, or any other form
of Guarantee to be endorsed on the Debt Securities; and (xv) any other specific
terms of the Debt Securities not inconsistent with the Indenture. In addition,
the applicable Prospectus Supplement will describe the following terms of the
series of Subordinated Debt Securities offered hereby in respect of which this
Prospectus is being delivered: (a) the rights, if any, to defer payments of
interest on the Subordinated Debt Securities by extending the interest payment
period, and the duration of such extensions, and (b) the subordination terms of
the Subordinated Debt Securities of such series.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, Federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the Corporate Trust Office of the
applicable Debt Trustee in New York, New York, provided that payment of
interest, if any, may be made at the option of the applicable Issuer by check
mailed on or before the payment date, first class mail, to the address of the
person entitled thereto as it appears on the registry books of such Issuer or
its agent.
Unless otherwise specified in the Prospectus Supplement, the Senior Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof (Sections 301 and 302) and Subordinated
Debt Securities issued in connection with the Trust Preferred Securities will be
issued in denominations of $25 or integral multiples thereof. No service charge
will be made for any transfer or exchange of any Debt Securities, but the Issuer
thereof may, except in certain specified cases not involving any transfer,
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305)
COMPANY GUARANTEES
The Company will irrevocably and unconditionally guarantee to each Holder
of Subsidiary Debt Securities the due and punctual payment of the principal of,
and any premium and interest on, such Subsidiary Debt Securities, when and as
the same shall become due and payable, whether at maturity, upon acceleration or
otherwise. The Company has (a) agreed that its obligations under the Company
Guarantees upon the occurrence
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and continuance of an Event of Default will be as if it were principal obligor
and not merely surety, and will be enforceable irrespective of any invalidity,
irregularity or unenforceability of any series of the Debt Securities or the
Indenture and (b) waived its right to require the Trustee or the Holders of
Subsidiary Debt Securities to pursue or exhaust their legal or equitable
remedies against the applicable Subsidiary Issuer prior to exercising their
rights under the Company Guarantees.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the 'Depositary') identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Each Issuer anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the applicable
Issuer if such Debt Securities are offered and sold directly by an Issuer.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ('participants') or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture governing such Debt
Securities.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the applicable Issuer, the Guarantor, the applicable
Debt Trustee for such Debt Securities, any Paying Agent, nor the Security
Registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Each Issuer expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. Each Issuer also expects that payments by
participants to
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owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in 'street name'. Such payments will be the responsibility of
such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the applicable Issuer within 90 days, such Issuer will issue
individual Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. In addition, an Issuer may at any
time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of a series represented by one or more Global Securities
and, in such event, will issue individual Debt Securities of such series in
exchange for the Global Security or Securities representing such series of Debt
Securities. Further, if such Issuer so specifies with respect to the Debt
Securities of a series, an owner of a beneficial interest in a Global Security
representing Debt Securities of such series may, on terms acceptable to such
Issuer, the applicable Debt Trustee and the Depositary for such Global Security,
receive individual Debt Securities of such series in exchange for such
beneficial interests, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
of individual Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the Issuer
thereof, of $1,000 and integral multiples thereof, in the case of Senior Debt
Securities, and $25 and integral multiples thereof, in the case of Subordinated
Debt Securities.
CERTAIN DEFINITIONS
Certain terms defined in Section 101 of the Indentures are summarized
below.
'Debt' means indebtedness for money borrowed.
'Domestic Subsidiary' means a Subsidiary incorporated or conducting its
principal operations within the United States or any State thereof or off the
coast of the United States within an area over which the United States or any
State thereof has jurisdiction.
'Funded Debt' of any person means all indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar agreement
at the option of such person for a period ending more than one year after the
date as of which Funded Debt is being determined; provided, however, that Funded
Debt shall not include (i) any indebtedness for the payment, redemption or
satisfaction of which money (or evidences of indebtedness, if permitted under
the instrument creating or evidencing such indebtedness) in the necessary amount
shall have been irrevocably deposited in trust with a trustee or proper
depository either on or before the maturity or redemption date thereof or (ii)
any indebtedness of such person to any of its Subsidiaries or of any Subsidiary
to such person or any other Subsidiary or (iii) any indebtedness incurred in
connection with the financing of operating, construction or acquisition
projects, provided that the recourse for such indebtedness is limited to the
assets of such projects.
'Mortgage' means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
'Principal Property' means (i) any property owned or leased by the Company
or any Subsidiary, or any interest of the Company or any Subsidiary in property,
located within the United States of America or any State thereof (including
property located off the coast of the United States of America held pursuant to
lease from any Federal, State or other governmental body) which is considered by
the Company to be capable of producing oil or gas or minerals in commercial
quantities and (ii) any refinery, smelter or processing or manufacturing plant
owned or leased by the Company or any Subsidiary and located within the United
States of America or any State thereof, except (a) facilities related thereto
employed in transportation, distribution or marketing or (b) any
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refinery, smelter or processing or manufacturing plant, or portion thereof,
which the Board of Directors declares is not material to the business of the
Company and its subsidiaries taken as a whole.
'Restricted Subsidiary' means any Subsidiary which owns or leases (as
lessor or lessee) a Principal Property, but does not include any Subsidiary the
principal business of which is leasing machinery, equipment, vehicles or other
properties none of which is a Principal Property, or financing accounts
receivable, or engaging in ownership and development of any real property which
is not a Principal Property.
'Subsidiary', when used with respect to the Company, means any corporation
of which a majority of the outstanding voting stock is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or both.
COVENANTS
The Senior Indenture contains the covenants summarized below, which will be
applicable (unless waived or amended) so long as any of the Senior Debt
Securities are outstanding, unless stated otherwise in the Prospectus
Supplement.
Limitation on Liens and Sale Leaseback Transactions. (a) The Company will
not, nor will it permit any Subsidiary to, create, assume, incur or suffer to
exist any Mortgage upon any stock or indebtedness of any Domestic Subsidiary,
whether owned on the date of the Senior Indenture or thereafter acquired, to
secure any Debt of the Company or any other person (other than the Senior Debt
Securities), without in any such case making effective provision whereby all the
outstanding Senior Debt Securities shall be directly secured equally and ratably
with such Debt. There will be excluded from this restriction any Mortgage upon
stock or indebtedness of a corporation existing at the time such corporation
becomes a Domestic Subsidiary or at the time stock or indebtedness of a Domestic
Subsidiary is acquired and any extension, renewal or replacement of any such
Mortgage.
(b) The Company will not, nor will it permit any Restricted Subsidiary to,
create, assume, incur or suffer to exist any Mortgage upon any Principal
Property, whether owned or leased on the date of the Senior Indenture, or
thereafter acquired, to secure any Debt of the Company or any other person
(other than the Senior Debt Securities), without in any such case making
effective provision whereby all the outstanding Senior Debt Securities shall be
directly secured equally and ratably with such Debt. (Section 1006)
There will be excluded from the restriction referred to in the next
preceding paragraph the following Mortgages (the Mortgages set forth in the
following clauses (i) through (vi) the 'Permitted Mortgages') (i) any Mortgage
upon property owned or leased by a corporation existing at the time such
corporation becomes a Restricted Subsidiary, (ii) any Mortgage upon property
existing at the time of the acquisition thereof or to secure payment of any part
of the purchase price thereof or any Debt incurred to finance the purchase
thereof, (iii) any Mortgage upon property to secure any part of the cost of
exploration, drilling, development, construction, alteration, repair or
improvement of such property, or Debt incurred to finance such cost, (iv) any
Mortgage securing Debt of a Restricted Subsidiary owing to the Company or to
another Restricted Subsidiary, (v) any Mortgage existing on the date of the
Senior Indenture, and (vi) any extension, renewal or replacement, in whole or in
part, of any Mortgage referred to in the foregoing clauses (i) through (v);
provided, however, that the principal amount of Debt secured thereby shall not
exceed the principal amount of Debt so secured at the time of such extension,
renewal or replacement; and provided, further, that such Mortgage shall be
limited to all or such part of the property which secured the Mortgage so
extended, renewed or replaced.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist any Mortgage
upon any Principal Property without equally and ratably securing the Senior Debt
Securities if the aggregate amount of all Debt then outstanding secured by such
Mortgage and all similar Mortgages does not exceed 10% of the total consolidated
stockholders' equity (including preferred stock) of the Company as shown on the
audited consolidated balance sheet contained in the latest annual report to
stockholders of the Company; provided that Debt secured by Permitted Mortgages
shall not be included in the amount of such secured Debt.
For the purpose of the restriction referred to in the third preceding
paragraph, no Mortgage to secure any Debt will be deemed created by (i) the sale
or other transfer of (A) any oil or gas or minerals in place for a period
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of time until, or in an amount such that, the purchaser will realize therefrom a
specified amount of money (however determined) or a specified amount of such oil
or gas or minerals, or (B) any other interest commonly referred to as a
'production payment', and (ii) any Mortgage in favor of the United States (or
any State thereof), or any other country, or any political subdivision of any of
the foregoing, to secure partial, progress, advance or other payments pursuant
to any contract or statute, or any Mortgage upon property intended to be used
primarily for the purpose of or in connection with air or water pollution
control. (Section 1006)
(c) The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person providing for the leasing by the
Company or a Restricted Subsidiary as lessee of any Principal Property (except
for temporary leases for a term, including renewals, of not more than five
years), which property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such person (herein referred to as a
'Sale-Leaseback Transaction'), unless (i) such Sale-Leaseback Transaction occurs
within 120 days from the date of acquisition of such Principal Property or the
date of the completion of construction or commencement of full operations on
such Principal Property, whichever is later, or (ii) the Company, within 120
days after such Sale-Leaseback Transaction, applies or causes to be applied to
the retirement of Funded Debt of the Company or any Subsidiary (other than
Funded Debt of the Company which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the Senior
Debt Securities) an amount not less than the net proceeds of the sale of such
Principal Property. (Section 1006)
Notwithstanding the foregoing provisions of this paragraph (c), the Company
may, and may permit any Restricted Subsidiary to, effect any Sale-Leaseback
Transaction involving any Principal Property, provided that the net sale
proceeds from such Sale-Leaseback Transaction, together with all Debt secured by
Mortgages other than Permitted Mortgages, does not exceed 10% of the total
consolidated stockholders' equity of the Company as shown on the audited
consolidated balance sheet contained in the latest annual report to stockholders
of the Company.
Limitation on Transfers of Principal Properties to Unrestricted
Subsidiaries. The Company will not, nor will it permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any Principal Property to
any Subsidiary which is not a Restricted Subsidiary other than for cash or other
consideration which, in the opinion of the Company's Board of Directors,
constitutes fair value for such Principal Property. (Section 1007)
CONSOLIDATION, MERGER, SALE OR CONVEYANCE OF THE COMPANY
Each Indenture provides that the Company may not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any person, unless (i) the successor corporation
shall be a corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture the due and punctual payment of the principal
of, any premium on, and any interest on, all the outstanding Debt Securities and
the performance of every covenant in the applicable Indenture on the part of the
Company to be performed or observed; (ii) immediately after giving effect to
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the applicable Debt
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such transaction.
(Section 801) In case of any such consolidation, merger, conveyance or transfer,
such successor corporation will succeed to and be substituted for the Company as
obligor on the Debt Securities, with the same effect as if it had been named in
the applicable Indenture as the Company. (Section 803) Other than the
restrictions on Mortgages described above, the Indentures and the Debt
Securities do not contain any covenants or other provisions designed to protect
holders of Debt Securities in the event of a highly leveraged transaction
involving the Company or any Subsidiary.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE OF THE SUBSIDIARY ISSUERS
Each Indenture provides that so long as any Subsidiary Debt Securities of
any Subsidiary Issuer are outstanding, such Subsidiary Issuer may not
consolidate or amalgamate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to any person,
unless (i) the successor corporation shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia or of Canada or any province or territory thereof, and
shall expressly assume by a supplemental indenture the due and punctual payment
of the principal of, any premium on, and any interest on,
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all the outstanding Subsidiary Debt Securities and the performance of every
covenant in the applicable Indenture on the part of such Subsidiary Issuer to be
performed or observed; (ii) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing; and
(iii) such Subsidiary Issuer shall have delivered to the applicable Debt Trustee
an Officer's Certificate and an Opinion of Counsel, each stating that such
consolidation, amalgamation, merger, conveyance or transfer and such
supplemental indenture comply with the foregoing provisions relating to such
transaction. (Section 802) In case of any such consolidation, amalgamation,
merger, conveyance or transfer, such successor corporation will succeed to and
be substituted for such Subsidiary Issuer as obligor on the Subsidiary Debt
Securities, with the same effect as if it had been named in the applicable
Indenture as such Subsidiary Issuer. (Section 803)
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in each
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (c) default in payment of any
sinking or purchase fund or analogous obligation, if any, on the Debt Securities
of such series; (d) default by the Company in the performance of any other
covenant or warranty contained in the applicable Indenture for the benefit of
such series which shall not have been remedied for a period of 90 days after
notice is given as specified in the applicable Indenture; and (e) certain events
of bankruptcy, insolvency and reorganization of the Company. (Section 501)
A default under other indebtedness of the Company will not be a default
under the Indentures and a default under one series of Debt Securities will not
necessarily be a default under another series.
Each Indenture provides that (i) if an Event of Default described in clause
(a), (b), (c) or (d) above (if the Event of Default under clause (d) is with
respect to less than all series of Debt Securities then outstanding) shall have
occurred and be continuing with respect to any series, either the applicable
Debt Trustee or the holders of not less than 25% in aggregate principal amount
of the Debt Securities of such series then outstanding (each such series acting
as a separate class) may declare the principal (or, in the case of Original
Issue Discount Securities, the portion thereof specified in the terms thereof)
of all outstanding Debt Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately and (ii) if an Event of
Default described in clause (d) or (e) above (if the Event of Default under
clause (d) is with respect to all series of Debt Securities then outstanding)
shall have occurred and be continuing, either the applicable Debt Trustee or the
holders of at least 25% in aggregate principal amount of all Debt Securities
then outstanding (treated as one class) may declare the principal (or, in the
case of Original Issue Discount Securities, the portion thereof specified in the
terms thereof) of all Debt Securities then outstanding and the interest accrued
thereon, if any, to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults (except for defaults in the
payment of principal of, any premium on, or any interest on, such Debt
Securities and in compliance with certain covenants) may be waived by the
holders of a majority in aggregate principal amount of the Debt Securities of
such series then outstanding. (Sections 502 and 513)
Under each Indenture the applicable Debt Trustee must give to the holders
of each series of Debt Securities notice of all uncured defaults known to it
with respect to such series within 90 days after such a default occurs (the term
'default' to include the events specified above without notice or grace
periods); provided that, except in the case of default in the payment of
principal of, any premium on, or any interest on, any of the Debt Securities, or
default in the payment of any sinking or purchase fund installment or analogous
obligations, the applicable Debt Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of the Debt Securities of such series. (Section
602)
No holder of any Debt Securities of any series may institute any action
under either Indenture unless (a) such holder shall have given the Debt Trustee
thereunder written notice of a continuing Event of Default with respect to such
series, (b) the holders of not less than 25% in aggregate principal amount of
the Debt Securities of such series then outstanding shall have requested the
Debt Trustee thereunder to institute proceedings in respect of such Event of
Default, (c) such holder or holders shall have offered the Debt Trustee
thereunder such reasonable indemnity as such Debt Trustee may require, (d) the
Debt Trustee thereunder shall have failed to institute an action for 60 days
thereafter and (e) no inconsistent direction shall have been given to the Debt
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Trustee thereunder during such 60-day period by the holders of a majority in
aggregate principal amount of Debt Securities of such series. (Section 507)
The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Debt
Trustee or exercising any trust or power conferred on such Debt Trustee with
respect to such series of Debt Securities. (Section 512) Each Indenture provides
that, in case an Event of Default shall occur and be continuing, the Debt
Trustee thereunder, in exercising its rights and powers under such Indenture,
will be required to use the degree of care of a prudent man in the conduct of
his own affairs. (Section 601) Each Indenture further provides that the Debt
Trustee thereunder shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
under such Indenture unless it has reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
reasonably assured to it. (Section 601)
The Company must furnish to the Debt Trustees within 120 days after the end
of each fiscal year a statement signed by one of certain officers of the Company
to the effect that a review of the activities of the Company during such year
and of its performance under the applicable Indenture and the terms of the Debt
Securities has been made, and, to the best of the knowledge of the signatories
based on such review, the Company has complied with all conditions and covenants
of such Indenture or, if the Company is in default, specifying such default.
(Section 1004)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the applicable Debt Trustee by an Officers' Certificate) as of
the date the taking of such action by the holders of such requisite principal
amount is evidenced to the applicable Debt Trustee as provided in the respective
Indenture. (Section 104)
If any Debt Securities are Original Issue Discount Securities, then for the
purposes of determining whether the holders of the requisite principal amount of
Debt Securities have taken any action herein described, the principal amount of
such Debt Securities shall be deemed to be the portion of such principal amount
that would be due and payable at the time of the taking of such action upon a
declaration of acceleration of maturity thereof. (Section 101)
MODIFICATION OF THE INDENTURES
With certain exceptions, the applicable Indenture or the rights of the
holders of the Debt Securities may be modified by the Issuer thereof, the
Company and the applicable Debt Trustee with the consent of the holders of a
majority in aggregate principal amount of the Debt Securities of each series
affected by such modification then outstanding, but no such modification may be
made without the consent of the holder of each outstanding Debt Security
affected thereby which would (i) change the maturity of any payment of principal
of, or any premium on, or any installment of interest on any Debt Security, or
reduce the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any place of payment where, or the coin or
currency in which, any Debt Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof (or, in the case of redemption or
repayment, on or after the redemption date or the repayment date, as the case
may be), or (ii) reduce the percentage in principal amount of the outstanding
Debt Securities of any series, the consent of whose holders is required for any
such modification, or the consent of whose holders is required for any waiver of
compliance with certain provisions of the applicable Indenture or certain
defaults thereunder and their consequences provided for in such Indenture, or
(iii) modify any of the provisions of certain Sections of the applicable
Indenture, including the provisions summarized in this paragraph, except to
increase any such percentage or to provide that certain other provisions of such
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Debt Security affected thereby. (Section 902)
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DEFEASANCE OF THE INDENTURE AND DEBT SECURITIES
If the terms of any series of Debt Securities so provide, the Issuer
thereof and the Guarantor, if any, will be deemed to have paid and discharged
the entire indebtedness on all the outstanding Debt Securities of such series by
(a) depositing with the applicable Debt Trustee (i) as trust funds in trust an
amount sufficient to pay and discharge the entire indebtedness on all Debt
Securities of such series for principal, premium and interest or (ii) as
obligations in trust such amount of direct obligations of, or obligations the
principal of and interest on which are fully guaranteed by, the government which
issued the currency in which the Debt Securities are denominated as will,
together with the income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay and discharge the entire indebtedness
on all such Debt Securities for principal, premium and interest and (b)
satisfying certain other conditions precedent specified in the applicable
Indenture. (Section 403) In the event of any such defeasance, holders of such
Debt Securities would be able to look only to such trust fund for payment of
principal of, any premium on, and any interest on their Debt Securities.
In the event of such defeasance, such Issuer and Guarantor, if any, are
required, among other things, to deliver to the Trustee an Opinion of Counsel to
the effect that (i) the deposit and related defeasance would not cause the
holders of such Debt Securities to recognize income, gain or loss for Federal
income tax purposes, accompanied by a ruling to such effect received from or
published by the United States Internal Revenue Service and (ii) the creation of
the defeasance trust will not violate the Investment Company Act of 1940, as
amended. In addition, such Issuer and Guarantor, if any, are required to deliver
to the Trustee an officers' certificate stating that such deposit was not made
by such Issuer or Guarantor, if any, with the intent of preferring the holders
of such series over other creditors of such Issuer or Guarantor, as applicable,
or with the intent of defeating, hindering, delaying or defrauding creditors of
such Issuer or Guarantor, as applicable, or others.
CONCERNING THE SENIOR TRUSTEE
BONY and its affiliates provide customary commercial banking services to
the Company and certain of its subsidiaries and participate in various financing
agreements of the Company in the ordinary course of their business.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Amended and Restated Articles
of Incorporation, and the certificate of amendment relating to each series of
the Preferred Stock (the 'Certificate of Amendment') which will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such series of
the Preferred Stock.
The Company's Amended and Restated Articles of Incorporation authorize the
Board of Directors of the Company to issue 100 million shares of Preferred
Stock, no par value per share, in one or more series and to fix the preferences,
limitations and relative rights of the shares of each such series, including
dividend rates, conversion rights, voting rights, terms of redemption and
liquidation preferences, and the number of shares constituting each such series,
without any further vote or action by the shareholders. No shares of Preferred
Stock are currently outstanding, and no shares are reserved for issuance.
Preferred Stock of a particular series shall have the dividend,
liquidation, redemption, conversion and voting rights set forth in the
Prospectus Supplement relating to such series. Reference is made to the
Prospectus Supplement relating to a particular series of Preferred Stock for
specific terms, including: (i) the distinctive serial designation and the number
of shares constituting such series; (ii) the dividend rate or rates, the payment
date or dates for dividends and the participating or other special rights, if
any, with respect to dividends; (iii) any redemption, sinking fund or other
analogous provisions applicable to such Preferred Stock; (iv) the amount or
amounts payable upon the shares of Preferred Stock in the event of voluntary or
involuntary liquidation,
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dissolution or winding up of the Company prior to any payment or distribution of
the assets of the Company to the holders of any class or classes of stock which
are junior in rank to the Preferred Stock; (v) any terms for the conversion into
or exchange for shares of Common Stock, shares of Preferred Stock or Debt
Securities and (vi) any other specific terms of the Preferred Stock not
inconsistent with the Company's Amended and Restated Articles of Incorporation
and any applicable Certificate of Amendment. The term 'class or classes of stock
which are junior in rank to the Preferred Stock' means the Common Stock and any
other class or classes of stock of the Company hereafter authorized which shall
rank junior to the Preferred Stock as to dividends or upon liquidation.
DESCRIPTION OF COMMON STOCK
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Revised Business Corporation Law of
the State of Utah and the Company's Amended and Restated Articles of
Incorporation.
The Company is presently authorized to issue 400 million shares of Common
Stock, no par value per share. At June 30, 1997, an aggregate of 254,274,102
shares of Common Stock were outstanding. In addition, 16,000,000 shares of
Common Stock have been reserved for issuance upon exercise of options and for
the issuance of retention shares granted under the Company's 1995 Stock Option
Plan, and 1,000,000 shares of Common Stock have been reserved for issuance upon
exercise of options granted under the Company's 1995 Directors Stock Option
Plan.
The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding Preferred Stock, holders
of Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors of the Company out of funds legally available
therefor. In the event of a dissolution of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after the discharge or the
provision for the discharge of liabilities and the payment of any liquidation
preference of any outstanding Preferred Stock. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common Stock into any
other securities, and there are no redemption provisions with respect to such
shares. All of the outstanding shares of Common Stock are, and the shares
offered hereby will be, fully paid and nonassessable.
Harris Trust & Savings Bank is the transfer agent and registrar for the
Common Stock. The Common Stock is listed on the New York Stock Exchange.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Senior Debt Securities
or shares of Preferred Stock or Common Stock. Warrants may be issued
independently or together with any Senior Debt Securities or shares of Preferred
Stock or Common Stock offered by any Prospectus Supplement and may be attached
to or separate from such Senior Debt Securities or shares of Preferred Stock or
Common Stock. The Warrants are to be issued under Warrant Agreements to be
entered into between the Company and BONY, as Warrant Agent, or such other bank
or trust company as is named in the Prospectus Supplement relating to the
particular issue of Warrants (the 'Warrant Agent'). The Warrant Agent will act
solely as an agent of the Company in connection with the Warrants and will not
assume any obligation or relationship of agency or trust for or with any holders
of Warrants or beneficial owners of Warrants. The following summaries of certain
provisions of the form of Warrant Agreement and Warrants do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the applicable Warrant Agreement and the Warrants.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the terms
of the Warrants, including the following: (i) the offering price; (ii) the
currency, currencies or currency units for which Warrants may be purchased;
(iii) the designation, aggregate principal amount, currency, currencies or
currency units and terms of the Senior Debt Securities purchasable upon exercise
of the Debt Warrants and the price at which such Senior Debt Securities may be
purchased upon such exercise; (iv) the designation, number of shares and terms
of the
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Preferred Stock purchasable upon exercise of the Preferred Stock Warrants and
the price at which such shares of Preferred Stock Warrants may be purchased upon
such exercise; (v) the designation, number of shares and terms of the Common
Stock purchasable upon exercise of the Common Stock Warrants and the price at
which such shares of Common Stock may be purchased upon such exercise; (vi) if
applicable, the designation and terms of the Senior Debt Securities, Preferred
Stock or Common Stock with which the Warrants are issued and the number of
Warrants issued with each such Senior Debt Security or share of Preferred Stock
or Common Stock; (vii) if applicable, the date on and after which the Warrants
and the related Senior Debt Securities, Preferred Stock or Common Stock will be
separately transferable; (viii) the date on which the right to exercise the
Warrants shall commence and the date (the 'Expiration Date') on which such right
shall expire; (ix) whether the Warrants will be issued in registered or bearer
form; (x) a discussion of certain Federal income tax, accounting and other
special considerations, procedures and limitations relating to the Warrants; and
(xi) any other terms of the Warrants.
Warrants may be exchanged for new Warrants of different denominations, may
(if in registered form) be presented for registration of transfer, and may be
exercised at the corporate trust office of the Warrant Agent or any other office
indicated in the Prospectus Supplement. Before the exercise of their Warrants,
holders of Warrants will not have any of the rights of holders of the Senior
Debt Securities or shares of Preferred Stock or Common Stock purchasable upon
such exercise, including the right to receive payments of principal of, any
premium on, or any interest on, the Senior Debt Securities purchasable upon such
exercise or to enforce the covenants in the Indenture or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise or to exercise any applicable right to vote.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Senior Debt Securities or such number of shares of Preferred Stock or Common
Stock at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Warrant. Warrants may
be exercised at such times as are set forth in the Prospectus Supplement
relating to such Warrants. After the close of business on the Expiration Date
(or such later date to which such Expiration Date may be extended by the
Company), unexercised Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Warrants may be exercised
by delivery to the Warrant Agent of the certificate evidencing such Warrants
properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Senior Debt
Securities or shares of Preferred Stock or Common Stock purchasable upon such
exercise. The exercise price will be the price applicable on the date of payment
in full, as set forth in the Prospectus Supplement relating to the Warrants.
Upon receipt of such payment and the certificate representing the Warrants to be
exercised, properly completed and duly executed at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement,
the Company will, as soon as practicable, issue and deliver the Senior Debt
Securities or shares of Preferred Stock or Common Stock purchasable upon such
exercise. If fewer than all of the Warrants represented by such certificate are
exercised, a new certificate will be issued for the remaining amount of
Warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, which are contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Common Stock or Preferred Stock may
be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. Any such formula may include anti-dilution provisions to adjust the
number of shares issuable pursuant to Stock Purchase Contracts upon certain
events. The Stock Purchase Contracts may be issued separately or as a part of
Stock Purchase Units each representing ownership of a Stock Purchase Contract
and Debt Securities, U.S. Obligations or Trust Preferred Securities securing the
holder's obligations to purchase the Common Stock or Preferred Stock under the
Stock Purchase Contracts.
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Except as otherwise described in the applicable Prospectus Supplement, in
the case of Stock Purchase Units that include U.S. Obligations, unless a holder
of Stock Purchase Units settles its obligations under the Stock Purchase
Contracts early through the delivery of consideration to the Company or its
agent in the manner discussed below, the principal of such U.S. Obligations,
when paid at maturity, will automatically be applied to satisfy the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contracts.
Except as otherwise described in the applicable Prospectus Supplement, in
the case of Stock Purchase Units that include Debt Securities or Trust Preferred
Securities, in the absence of any such early settlement or the election by a
holder to pay the consideration specified in the Stock Purchase Contracts, the
Debt Securities or Trust Preferred Securities will automatically be presented to
the applicable issuer for redemption at 100% of face or liquidation value and,
in the case of Trust Preferred Securities the applicable UPRG Trust will present
Subordinated Debt Securities in an equal principal amount to the Company for
redemption at 100% of principal amount. Amounts received in respect of such
redemption will automatically be applied to satisfy in full the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make periodic
payments to the holders of the Stock Purchase Units or vice versa, and such
payments may be unsecured or refunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner.
Except as otherwise described in the applicable Prospectus Supplement,
holders of Stock Purchase Units may be entitled to settle the underlying Stock
Purchase Contracts prior to the stated settlement date by surrendering the
certificate evidencing the Stock Purchase Units, accompanied by the payment due,
in such form and calculated pursuant to such formula as may be prescribed in the
Stock Purchase Contracts and described in the applicable Prospectus Supplement.
Upon early settlement, the holder would receive the number of shares of Common
Stock or Preferred Stock deliverable under such Stock Purchase Contracts,
subject to adjustment in certain cases. Holders of Stock Purchase Units may be
entitled to exchange their Stock Purchase Units together with appropriate
collateral, for separate Stock Purchase Contracts and Trust Preferred
Securities, Debt Securities or U.S. Obligations. In the event of either such
early settlement or exchange, the Trust Preferred Securities, Debt Securities or
U.S. Obligations that were pledged as security for the obligation of the holder
to perform under the Stock Purchase Contracts would be transferred to the holder
free and clear of the Company's security interest therein.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units including differences, if any, from
the terms described above.
DESCRIPTION OF TRUST PREFERRED SECURITIES AND TRUST GUARANTEES
TRUST PREFERRED SECURITIES
The Declaration pursuant to which each UPRG Trust is organized will be
replaced by an Amended and Restated Declaration of Trust (the 'Amended
Declaration') which will authorize the trustees (the 'Trustees') of such trust
to issue on behalf of such UPRG Trust one series of Trust Preferred Securities
and one series of Trust Common Securities (together, the 'Trust Securities').
The Trust Preferred Securities will be issued to the public pursuant to the
Registration Statement of which this Prospectus forms a part, and the Trust
Common Securities will be issued directly or indirectly to the Company.
The Trust Preferred Securities will have such terms, including dividends,
redemption, voting, conversion, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the applicable Declaration or made part of such Declaration by the Trust
Indenture Act. Reference is made to the applicable Prospectus Supplement
relating to the Trust Preferred Securities of such UPRG Trust for specific
terms, including (i) the distinctive designation of Trust Preferred Securities,
(ii) the number of Trust Preferred Securities issued by such UPRG Trust, (iii)
the annual dividend rate (or method of determining such rate) for Trust
Preferred Securities issued by such UPRG Trust and the date or dates upon which
such dividends shall be payable, (iv) whether dividends on Trust Preferred
Securities issued by such UPRG Trust shall be cumulative, and, in the case of
Trust Preferred Securities having such cumulative dividend rights, the date or
dates or method of determining the date or dates from which dividends on Trust
Preferred Securities issued by such UPRG Trust shall be cumulative, (v) the
amount or amounts which shall be paid out of the assets of such UPRG Trust to
the
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holder of Trust Preferred Securities of such UPRG Trust upon voluntary or
involuntary dissolution, winding-up or termination of such UPRG Trust, (vi) the
terms and conditions, if any, under which Trust Preferred Securities of such
UPRG Trust may be converted into shares of Capital Stock of the Company,
including the conversion price per share and the circumstances, if any, under
which any such conversion right shall expire, (vii) the terms and conditions, if
any, upon which the related series of the applicable Subordinated Debt
Securities may be distributed to holders of Trust Preferred Securities of such
UPRG Trust, (ix) the obligation, if any, of such UPRG Trust to purchase or
redeem Trust Preferred Securities issued by such UPRG Trust and the price or
prices at which, the period or periods within which and the terms and conditions
upon which Trust Preferred Securities issued by such UPRG Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation, (x) the
voting rights, if any, of Trust Preferred Securities issued by such UPRG Trust
in addition to those required by law, including the number of votes per Trust
Preferred Security and any requirement for the approval by the holders of Trust
Preferred Securities, or of Trust Preferred Securities issued by such UPRG
Trust, as a condition to specified action or amendments to the Declaration of
such UPRG Trust, and (xi) any other relevant rights, preferences, privileges,
limitations or restrictions of Trust Preferred Securities issued by such UPRG
Trust consistent with the Declaration of such UPRG Trust or with applicable law.
Pursuant to each Declaration, the Property Trustee will own the Subordinated
Debt Securities purchased by the applicable UPRG Trust for the benefit of the
holders of the Trust Preferred Securities. The payment of dividends out of money
held by the UPRG Trusts, and payments upon redemption of Trust Preferred
Securities or liquidation of any UPRG Trust, will be guaranteed by the Company
to the extent described under '--Trust Guarantees.'
Certain federal income tax considerations applicable to an investment in
Trust Preferred Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Trust Preferred Securities, each UPRG
Trust will also issue one series of Trust Common Securities. Each Amended
Declaration will authorize the Regular Trustee of a UPRG Trust to issue on
behalf of such UPRG Trust one series of Trust Common Securities having such
terms, including dividends, conversion, redemption, voting, liquidation rights
or such restrictions as shall be set forth therein. Except as otherwise provided
in the Prospectus Supplement relating to the Trust Preferred Securities, the
terms of the Trust Common Securities issued by such UPRG Trust will be
substantially identical to the terms of the Trust Preferred Securities issued by
such UPRG Trust, and the Trust Common Securities will rank pari passu, and
payments will be made thereon pro rata with the Trust Preferred Securities
except that, upon an event of default under the applicable Declaration, the
rights of the holders of the Trust Common Securities to payment in respect of
dividends and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Trust Preferred Securities.
Except in certain limited circumstances, the Trust Common Securities will also
carry the right to vote and appoint, remove or replace any of the Trustees of
the related UPRG Trust which issued such Trust Common Securities. All of the
Trust Common Securities of each UPRG Trust will be directly or indirectly owned
by the Company.
The Property Trustee and its affiliates provide customary commercial
banking services to the Company and certain of its subsidiaries and participate
in various financing agreements of the Company in the ordinary course of their
business. The Property Trustee acts as the administrative agent under (i) the
Revolving Credit Agreement dated as of October 5, 1995, (ii) the Competitive
Advance/Revolving Credit Agreement dated as of April 16, 1996, as amended August
9, 1996, September 13, 1996 and March 2, 1998 and (iii) the 364 Day Competitive
Advance/Revolving Credit Agreement dated as of November 25, 1997, as amended
March 2, 1998, each among the Company and the Property Trustee. The Chase
Manhattan Bank, an affiliate of the Property Trustee ('Chase') acts as the
administrative agent under the 364 Day Competitive Advance/Revolving Credit
Agreement dated as of March 2, 1998 among the Company and Chase.
TRUST GUARANTEES
Set forth below is a summary of information concerning the Trust Guarantees
which will be executed and delivered by the Company, from time to time, for the
benefit of the holders of Trust Preferred Securities. The accompanying
Prospectus Supplement will describe any significant differences between the
actual terms of the Trust Guarantees and the summary below. The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Trust
Guarantee, which will
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be filed with the Commission and incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus forms a part.
General. The Company will irrevocably and unconditionally agree, to the
extent set forth in the Trust Guarantees, to pay in full, to the holders of
Trust Preferred Securities of each series, the Trust Guarantee Payments (as
defined below) (except to the extent paid by such UPRG Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which such UPRG
Trust may have or assert. The following payments with respect to any series of
Trust Preferred Securities to the extent not paid by the applicable UPRG Trust
(the 'Trust Guarantee Payments') will be subject to the Trust Guarantees
(without duplication): (i) any accrued and unpaid dividends which are required
to be paid on the Trust Preferred Securities of such series, to the extent such
UPRG Trust shall have funds legally available therefor, (ii) the redemption
price, including all accrued and unpaid dividends (the 'Redemption Price'),
payable out of funds legally available therefor, with respect to any Trust
Preferred Securities called for redemption by such UPRG Trust and (iii) upon a
liquidation of such UPRG Trust (other than in connection with the distribution
of Subordinated Debt Securities to the holders of Trust Preferred Securities or
the redemption of all of the Trust Preferred Securities issued by such UPRG
Trust), the lesser of (a) the aggregate of the liquidation preference and all
accrued and unpaid dividends on the Trust Preferred Securities of such series to
the date of payment and (b) the amount of assets of such UPRG Trust remaining
available for distribution to holders of Trust Preferred Securities of such
series in liquidation of such UPRG Trust. The Company's obligation to make a
Trust Guarantee Payment may be satisfied by direct payment of the required
amounts by the Company to the holders of Trust Preferred Securities or by
causing the applicable UPRG Trust to pay such amounts to such holders.
Covenants of the Company. In each Trust Guarantee, the Company will
covenant that, so long as any Trust Preferred Securities issued by the
applicable UPRG Trust remain outstanding, if there shall have occurred any event
that would constitute an event of default under such Trust Guarantee or the
Declaration of such UPRG Trust, then (a) the Company shall not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase or
make a liquidation payment with respect to, any of its Common Stock (other than
(i) purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan,
(ii) as a result of a reclassification of the Company's Common Stock or the
exchange or conversion of one class or series of the Company's Common Stock for
another class or series of the Company's Common Stock, (iii) the purchase of
fractional interests in shares of the Company's Common Stock pursuant to the
conversion or exchange provisions of such Common Stock of the Company or the
security being converted or exchanged or (iv) purchases or acquisitions of
shares of Common Stock to be used in connection with acquisitions of Common
Stock by shareholders pursuant to the Company's dividend reinvestment plan) or
make any guarantee payments with respect to the foregoing and (b) the Company
shall not make any payment of principal or premium, if any, on or repurchase any
debt securities (including guarantees) other than at stated maturity issued by
the Company which rank pari passu with or junior to such Subordinated Debt
Securities.
Amendment and Assignment. Except with respect to any changes which do not
adversely affect the rights of holders of Trust Preferred Securities of any
series (in which case no vote will be required), each Trust Guarantee with
respect to any series of Trust Preferred Securities may be changed only with the
prior approval of the holders of not less than a majority in liquidation
preference of the outstanding Trust Preferred Securities of such series. The
manner of obtaining any such approval of holders of the Trust Preferred
Securities of each series will be as set forth in an accompanying Prospectus
Supplement. All guarantees and agreements contained in each Trust Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the applicable
series of Trust Preferred Securities then outstanding.
Termination of the Trust Guarantees. Each Trust Guarantee will terminate
as to the Trust Preferred Securities issued by the applicable UPRG Trust (a)
upon full payment of the redemption price of all Trust Preferred Securities of
such UPRG Trust, (b) upon distribution of the Subordinated Debt Securities held
by such UPRG Trust to the holders of the Trust Preferred Securities of such UPRG
Trust or (c) upon full payment of the amounts payable in accordance with the
Declaration of such UPRG Trust upon liquidation of such UPRG Trust. Each Trust
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Trust Preferred Securities issued by the
applicable UPRG Trust must restore payment of any sums paid under such Trust
Preferred Securities or such Trust Guarantee. The subordination provisions of
the Subordinated
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Debt Securities and the Trust Guarantees, respectively, will provide that in the
event payment is made on the Subordinated Debt Securities or the Trust
Guarantees in contravention of such provisions, such payments will be paid over
to the holders of Senior Indebtedness.
Ranking of the Trust Guarantees. Each Trust Guarantee will constitute an
unsecured obligation of the Company and will rank (i) subordinate and junior in
right of payment to all other liabilities of the Company, (ii) pari passu with
the most senior preferred or preference stock, if any, hereafter issued by the
Company and with any guarantee hereafter entered into by the Company in respect
of any preferred or preference stock or interests of any affiliate of the
Company and (iii) senior to the Company's Common Stock. Each Declaration will
provide that each holder of Trust Preferred Securities by acceptance thereof
agrees to the subordination provisions and other terms of the applicable Trust
Guarantee.
Each Trust Guarantee will constitute a guarantee of payment and not of
collection. The Trust Guarantees will be deposited with the Property Trustee to
be held for the benefit of any series of Trust Preferred Securities. The
Property Trustee will have the right to enforce the Trust Guarantees on behalf
of the holders of any series of Trust Preferred Securities. The holders of not
less than 10% in aggregate liquidation preference of a series of Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the Trust
Guarantee applicable to such series of Trust Preferred Securities, including the
giving of directions to the Property Trustee. If the Property Trustee fails to
enforce a Trust Guarantee as above provided, any holder of Trust Preferred
Securities of a series to which such Trust Guarantee pertains may institute a
legal proceeding directly against the Company to enforce its rights under such
Trust Guarantee, without first instituting a legal proceeding against the
applicable UPRG Trust, or any other person or entity. Each Trust Guarantee will
not be discharged except by payment of the Trust Guarantee Payments in full to
the extent not paid by the applicable UPRG Trust, and by complete performance of
all obligations under such Trust Guarantee.
Governing Law. Each Trust Guarantee will be governed by and construed in
accordance with the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company, the Subsidiary Issuers or the UPRG Trusts may sell the Offered
Securities offered hereby (i) through underwriters or dealers, (ii) through
agents, (iii) directly to purchasers, or (iv) through a combination of any such
methods of sale. Any such underwriter, dealer or agent may be deemed to be an
underwriter within the meaning of the Securities Act. The Prospectus Supplement
relating to the Offered Securities will set forth their offering terms,
including the name or names of any underwriters, dealers or agents, the purchase
price of the Offered Securities and the proceeds to the Company, the Subsidiary
Issuers or the UPRG Trusts from such sale, any underwriting discounts,
commissions and other items constituting compensation to underwriters, dealers
or agents, any initial public offering price, any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers, and
any securities exchanges on which the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any public offering price and any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers may be
changed from time to time.
Offered Securities may be sold directly by the Company, the Subsidiary
Issuers or the UPRG Trusts or through agents designated by the Company, the
Subsidiary Issuers or the UPRG Trusts from time to time. The Offered Securities
may be sold from time to time at market prices in ordinary broker's transactions
by agents of
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the Company, the Subsidiary Issuers or the UPRG Trusts. Any agent involved in
the offer or sale of the Offered Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by the Company, the
Subsidiary Issuers or the UPRG Trusts to such agent will be set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
If so indicated in the Prospectus Supplement, the Company, the Subsidiary
Issuers or the UPRG Trusts will authorize underwriters, dealers or agents to
solicit offers by certain specified institutions to purchase Offered Securities
from the Company, the Subsidiary Issuers or the UPRG Trusts at the public
offering price set forth in the Prospectus pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject to any conditions set forth in the Prospectus
Supplement and the Prospectus Supplement will set forth the commission payable
for solicitation of such contracts. The underwriters and other persons
soliciting such contracts will have no responsibility for the validity or
performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company, the Subsidiary Issuers or the UPRG Trusts to
indemnification by the Company, the Subsidiary Issuers or the UPRG Trusts
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution by the Company, the Subsidiary Issuers or the UPRG
Trusts to payments they may be required to make in respect thereof. The terms
and conditions of such indemnification will be described in an applicable
Prospectus Supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for, the Company, the
Subsidiary Issuers or the UPRG Trusts in the ordinary course of business.
Each series of Offered Securities may be a new issue of securities with no
established trading market. Any underwriters to whom Offered Securities are sold
by the Company, the Subsidiary Issuers or the UPRG Trusts for public offering
and sale may make a market in such Offered Securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Offered Securities.
LEGAL OPINIONS
The validity of the Company Securities and Subsidiary Debt Securities will
be passed upon for the Company and the Subsidiary Issuers by Mark L. Jones,
Managing Senior Counsel of the Company. The due authorization, execution and
delivery of the Subsidiary Debt Securities to be offered by UPRI will be passed
upon for UPRI by Bennett Jones Verchere, special Canadian counsel for UPRI. The
due authorization, execution and delivery of the Subsidiary Debt Securities to
be offered by UPR Capital Company will be passed upon for UPR Capital Company by
McInnes Cooper & Robertson, special Canadian counsel for UPR Capital Company.
The validity of the Trust Preferred Securities will be passed upon for the
Company and the UPRG Trusts by Richards, Layton & Finger, Wilmington, Delaware,
special Delaware counsel to the Company and the UPRG Trusts. The validity of the
Offered Securities will be passed upon for the underwriters, dealers or agents,
if any, by Cravath, Swaine & Moore, New York, New York. Cravath, Swaine & Moore
has from time to time acted as counsel for the Company and may do so in the
future.
EXPERTS
The financial statements incorporated in this Registration Statement by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for periods
ended June 30, 1998 and 1997, which is incorporated herein by reference, Arthur
Andersen LLP, with respect to the June 30, 1998 period and Deloitte & Touche
LLP, with respect to the June 30, 1997 period, have applied limited procedures
in accordance with professional standards for a review of such information.
However, as stated in Arthur Andersen LLP's report included in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and
22
<PAGE>
incorporated by reference herein, and as stated in Deloitte & Touche LLP's
report in the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997, neither auditor audited and neither auditor expresses an opinion on
that interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. Neither Arthur Andersen LLP nor Deloitte &
Touche LLP are subject to the liability provisions of Section 11 of the
Securities Act for their reports on the unaudited interim financial information
because those reports are not 'reports' or a 'part' of the registration
statement prepared or certified by an accountant within the meaning of Sections
7 and 11 of the Securities Act.
The consolidated financial statements incorporated by reference in this
Registration Statement from Norcen's Annual Report of Form 40-F for the years
ended December 31, 1997, and December 31, 1996, have been audited by Deloitte &
Touche, independent auditors as stated in their reports, which are incorporated
in the Norcen 8-K by reference. Such consolidated financial statements have been
incorporated by reference in this Registration Statement in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
23
<PAGE>
- ------------------------------------------------------
------------------------------------------------------
- ------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-------------
<S> <C>
Description of Notes......................... S-3
Important Currency Exchange
Information................................ S-26
Foreign Currency Risks....................... S-26
Certain Federal Tax Consequences............. S-27
Plan of Distribution......................... S-31
Legal Opinions............................... S-31
PROSPECTUS
Available Information........................ 3
Incorporation of Certain Documents by
Reference.................................. 3
The Company.................................. 4
Union Pacific Resources Inc. ................ 5
UPR Capital Company.......................... 5
The UPRG Trusts.............................. 6
Use of Proceeds.............................. 6
Description of Debt Securities and Company
Guarantees................................. 7
Description of Preferred Stock............... 15
Description of Common Stock.................. 16
Description of Warrants...................... 16
Description of Stock Purchase Contracts and
Stock Purchase Units....................... 17
Description of Trust Preferred Securities and
Trust Guarantees........................... 18
Plan of Distribution......................... 21
Legal Opinions............................... 22
Experts...................................... 22
</TABLE>
$700,000,000
MEDIUM-TERM NOTES
UNION PACIFIC
RESOURCES GROUP INC.
[LOGO]
UNION PACIFIC RESOURCES INC.
UPR CAPITAL COMPANY
------------------------
P R O S P E C T U S S U P P L E M E N T
, 1998
------------------------
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee........... $295,000
Trustee's Fees and Expenses................................... 10,000
Legal Fees and Expenses....................................... 30,000
Printing and Engraving Expenses............................... 30,000
Rating Agencies' Fees......................................... 175,000
Accountants' Fees and Expenses................................ 30,000
Blue Sky Fees and Expenses.................................... 5,000
Miscellaneous................................................. 50,000
--------
Total.................................................... $625,000
--------
--------
</TABLE>
- ------------------
* All amounts are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
THE COMPANY
The Company is a Utah corporation. Section 16-10a-901 et seq. of the
Revised Business Corporation Act of Utah grants to a corporation the power to
indemnify a person made a party to a lawsuit or other proceeding because such
person is or was a director or officer. A corporation is further empowered to
purchase insurance on behalf of any person who is or was a director or officer
against any liability asserted against or incurred by him or her in such
capacity or arising out of his or her status as a director or officer. The
Company's By-Laws provide for mandatory indemnification of its directors and
officers in certain circumstances. The Company maintains insurance on behalf of
directors and officers against liability asserted against them arising out of
their status as directors and officers.
The Company's Amended and Restated Articles of Incorporation, incorporated
herein as Exhibit 3.1 to this Registration Statement, eliminates in certain
circumstances the personal liability of directors of the Company for monetary
damages for a breach of their fiduciary duty as directors. This provision does
not eliminate the liability of a director for (i) the amount of a financial
benefit received by a director to which he is not entitled, (ii) an intentional
infliction of harm on the corporation or the stockholders, (iii) a violation of
Section 16-10a-842 of the Revised Business Corporation Act of Utah (relating to
the liability of directors for unlawful distributions) or (iv) an intentional
violation of criminal law.
UNION PACIFIC RESOURCES INC.
UPRI is an Alberta corporation. Section 119 of the Business Corporations
Act (Alberta) grants to a corporation the power to indemnify a person made a
party to a lawsuit or other proceeding because such person is or was a director
or officer. UPRI's By-Laws provide for mandatory indemnification of its
directors and officers in certain circumstances.
UPR CAPITAL COMPANY
UPR Capital Company is a Nova Scotia company. UPR Capital Company's
Articles of Association provide for indemnification of its directors and
officers if such persons are made a party to a lawsuit or other proceeding in
their capacity as a director or officers.
II-1
<PAGE>
THE UPRG TRUSTS
Each Declaration pursuant to which each UPRG Trust is organized will
provide that no Regular Trustee, or affiliate of any Regular Trustee, or
officer, director, shareholder, member, partner, employee, representative or
agent of any Regular Trustee or of any such affiliate, or employee or agent of
the applicable UPRG Trust or its affiliates (each an 'Indemnified Person') shall
be liable, responsible or accountable in damages or otherwise to such UPRG Trust
or any employee or agent of such UPRG Trust or its affiliates for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of such UPRG Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by such Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such act or omission. Each Declaration also
provides that to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the applicable UPRG Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such act or omission. Each Declaration further provides that, to
the fullest extent permitted by applicable law, expenses (including legal fees)
incurred by an Indemnified Person in defending any claim, demand, action, suit
or proceeding shall, from time to time, be advanced by the Company prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by such
Declaration.
THE REGISTRANTS
Reference is made to the form of Underwriting Agreement filed as Exhibit
1.1 and to the forms of Underwriting Agreement to be filed as Exhibits 1.2 and
1.3 and to Section 8 of the form of Distribution Agreement to be filed as
Exhibit 1.4 for additional indemnification provisions.
ITEM 16. EXHIBITS--
<TABLE>
<S> <C> <C>
1.1 -- Form of Underwriting Agreement for Debt Securities.
**1.2 -- Form of Underwriting Agreement for Preferred Stock and Common Stock.
**1.3 -- Form of Underwriting Agreement for Trust Preferred Securities.
*1.4 -- Form of Distribution Agreement (incorporated herein by reference to Exhibit 1.2 to the Company's
Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
*3.1 -- Amended and Restated Articles of Incorporation of Union Pacific Resources Group Inc. (incorporated
herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (No. 33-95398)
filed October 10, 1995).
*3.2 -- Amended and Restated By-laws of Union Pacific Resources Group Inc. (incorporated herein by reference
to Exhibit 3.2 to the Company's Registration Statement on Form S-1 (No. 33-95398) filed October 10,
1995).
3.3 -- Memorandum of Association of UPR Capital Company.
3.4 -- Articles of Association of UPR Capital Company.
3.5 -- Certificate and Articles of Continuance of UPRI.
3.6 -- By-law No. 1 of UPRI.
3.7 -- By-law No. 2 of UPRI.
4.1 -- Form of Indenture.
**4.2 -- Form of Subordinated Indenture (including form of Subordinated Debt Security).
**4.3 -- Form of Warrant Agreement.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
*4.4 -- Form of Debt Security (incorporated herein by reference to Exhibit 4.3 to the Company's Registration
Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
**4.5 -- Form of Debt Security.
*4.6 -- Form of Fixed Rate Note (incorporated herein by reference to Exhibit 4.4 to the Company's
Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
*4.7 -- Form of Floating Rate Note (incorporated herein by reference to Exhibit 4.5 to the Company's
Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
**4.8 -- Form of Stock Purchase Contract Agreement.
*4.9 -- Certificate of Trust of UPRG Capital Trust I (incorporated herein by reference to Exhibit 4.7 to the
Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
*4.10 -- Certificate of Trust of UPRG Capital Trust II (incorporated herein by reference to Exhibit 4.8 to the
Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
*4.11 -- Certificate of Trust of UPRG Capital Trust III (incorporated herein by reference to Exhibit 4.9 to
the Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
*4.12 -- Declaration of Trust of UPRG Capital Trust I (incorporated herein by reference to Exhibit 4.10 to the
Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
*4.13 -- Declaration of Trust of UPRG Capital Trust II (incorporated herein by reference to Exhibit 4.11 to
the Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
*4.14 -- Declaration of Trust of UPRG Capital Trust III (incorporated herein by reference to Exhibit 4.12 to
the Company's Registration Statement on Form S-3 (No. 33-22655) filed March 3, 1997).
5.1 -- Opinion and consent of Mark L. Jones; Managing Senior Counsel for the Company, regarding the Senior
Debt Securities, the Preferred Stock, the Common Stock and the Warrants.
5.2 -- Opinion and Consent of Bennett Jones Verchere, special Canadian counsel for UPRI, regarding the
Subsidiary Senior Debt Securities.
5.3 -- Opinion and consent of McInnes Cooper & Robertson, special Canadian counsel for UPR Capital Company,
regarding the Subsidiary Senior Debt Securities.
**5.4 -- Opinion and Consent of Bennett Jones Verchere, special Canadian counsel for UPRI, regarding the
Subsidiary Subordinated Debt Securities.
**5.5 -- Opinion and consent of McInnes Cooper & Robertson, special Canadian counsel for UPR Capital Company,
regarding the Subsidiary Subordinated Debt Securities.
**5.6 -- Opinion and consent of Mark L. Jones; Managing Senior Counsel for the Company, regarding the
Subordinated Debt Securities.
**5.7 -- Opinion and consent of Richards, Layton & Finger.
12 -- Computation of Ratio of Earnings to Fixed Charges.
15.1 -- Awareness Letter of Deloitte & Touche LLP.
15.2 -- Awareness Letter of Arthur Andersen LLP.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Deloitte & Touche.
23.3 -- Consent of Arthur Andersen LLP.
24.1 -- Power of Attorney of Lynne V. Cheney, Director of the Company.
24.2 -- Power of Attorney of Preston M. Geren III, Director of the Company.
24.3 -- Power of Attorney of Lawrence M. Jones, Director of the Company.
24.4 -- Power of Attorney of Drew Lewis, Director of the Company.
24.5 -- Power of Attorney of Claudine B. Malone, Director of the Company.
24.6 -- Power of Attorney of John W. Poduska, Director of the Company.
24.7 -- Power of Attorney of Michael E. Rossi, Director of the Company.
24.8 -- Power of Attorney of Samuel K. Skinner, Director of the Company.
24.9 -- Power of Attorney of James R. Thompson, Director of the Company.
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
24.9 -- Power of Attorney of the Directors of UPRI.
24.9 -- Power of Attorney of the Directors of UPR Capital Company.
25.1 -- Statement on Form T-1 of the eligibility of The Bank of New York, as trustee under the Indenture.
**25.2 -- Statement on Form T-1 of the eligibility of the Subordinated Trustee, as trustee under the
Subordinated Indenture.
**25.3 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust I.
**25.4 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust II.
**25.5 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust III.
**25.6 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust Guarantee
of the Company for the benefit of the holders of Trust Preferred Securities of the UPRG Capital Trust
I.
**25.7 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust Guarantee
of the Company for the benefit of the holders of Trust Preferred Securities of UPRG Capital Trust II.
**25.8 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust Guarantee
of the Company for the benefit of the holders of Trust Preferred Securities of UPRG Capital Trust
III.
</TABLE>
- ------------------
* Incorporated herein by reference.
** To be filed either by amendment or as an exhibit to an Exchange Act Report
and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; provided, however, that notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the 'Calculation of Registration Fee' table in the
effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the Company pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement;
II-4
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered 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
Registrants pursuant to the provisions described under Item 15 above or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrants of expenses incurred or paid by a director,
officer or controlling person of the Registrants in the successful defense of
any action, suit or proceeding) is asserted against the Registrants by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their respective
counsels the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, UNION PACIFIC
RESOURCES GROUP INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO
DULY AUTHORIZED, IN THE CITY OF FORT WORTH, TEXAS, ON THIS 25TH DAY OF AUGUST,
1998.
UNION PACIFIC RESOURCES GROUP INC.,
By: /s/ MORRIS B. SMITH
----------------------------------
Morris B. Smith
Vice President and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW ON THIS 25TH DAY OF
AUGUST, 1998, BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------------- ---------------------------------------------------------
<S> <C>
/s/ JACK L. MESSMAN Chairman, Chief Executive
- --------------------------------------------------- Officer and Director
Jack L. Messman (Principal Executive Officer)
/s/ MORRIS B. SMITH Vice President
- --------------------------------------------------- and Chief Financial Officer
Morris B. Smith (Principal Accounting Officer and Financial Officer)
H. JESSE ARNELLE Director
LYNNE V. CHENEY* Director
PRESTON M. GEREN, III* Director
LAWRENCE M. JONES* Director
DREW LEWIS* Director By: /s/ MARK L. JONES
-------------------------------------
CLAUDINE B. MALONE* Director Mark L. Jones
*Attorney-in-Fact
JOHN W. PODUSKA, SR., PH.D.* Director
MICHAEL E. ROSSI* Director
SAMUEL J. SKINNER* Director
JAMES R. THOMPSON* Director
</TABLE>
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, UNION PACIFIC
RESOURCES INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO
DULY AUTHORIZED, IN THE CITY OF FORT WORTH, TEXAS, ON THIS 25TH DAY OF AUGUST,
1998.
UNION PACIFIC RESOURCES INC.,
an Alberta, Canada corporation
By: /s/ MORRIS B. SMITH
---------------------------------
Morris B. Smith
Vice President, Finance and Chief
Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW ON THIS 25TH DAY OF
AUGUST, 1998, BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------------- ---------------------------------------------------------
<S> <C>
/s/ S. CRAIG BUCHANAN Vice President, Operations
- --------------------------------------------------- (Principal Executive Officer)
S. Craig Buchanan
/s/ MORRIS B. SMITH Vice President, Finance and Chief
- --------------------------------------------------- Financial Officer (Principal Accounting Officer and
Morris B. Smith Financial Officer)
JOHN F. CURRAN* Director
JOSEPH A. LASALA, JR.* Director
ROBERT A. LEHODEY* Director By: /s/ MARK L. JONES
---------------------------------
JACK L. MESSMAN* Director Mark L. Jones
*Attorney-in-Fact
JAMES G. SMELTZER* Director
By: /s/ MARK L. JONES (Authorized Representative)
---------------------------------------
Mark L. Jones
</TABLE>
II-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, UPR CAPITAL
COMPANY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED, IN THE CITY OF FORT WORTH, TEXAS, ON THIS 25TH DAY OF AUGUST, 1998.
UPR CAPITAL COMPANY,
a Nova Scotia, Canada unlimited
liability company
By: /s/ MORRIS B. SMITH
---------------------------------
Morris B. Smith
Vice President and Director
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW ON THIS 25TH DAY OF
AUGUST, 1998, BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------------- ---------------------------------------------------------
<S> <C>
/s/ V. RICHARD EALES President
- --------------------------------------------------- (Principal Executive Officer)
V. Richard Eales
/s/ MORRIS B. SMITH Vice President and Director
- --------------------------------------------------- (Principal Accounting Officer and Financial Officer)
Morris B. Smith
JOSEPH A. LASALA, JR.* Director
JACK L. MESSMAN* Director By: /s/ MARK L. JONES
MORRIS B. SMITH* Director -------------------------------
Mark L. Jones
*Attorney-in-Fact
By: /s/ MARK L. JONES (Authorized Representative)
---------------------------------------------------
Mark L. Jones
</TABLE>
II-8
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, EACH OF UPRG
CAPITAL TRUST I, UPRG CAPITAL TRUST II AND UPRG CAPITAL TRUST III CERTIFIES THAT
IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR
FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE CITY OF FORT
WORTH, TEXAS ON THE 25TH DAY OF AUGUST, 1998.
UPRG CAPITAL TRUST I,
a Delaware business trust
By: UNION PACIFIC RESOURCES GROUP
INC.,
as Depositor
By: /s/ MORRIS B. SMITH
--------------------------------
Morris B. Smith
Vice President and
Chief Financial Officer
UPRG CAPITAL TRUST II,
a Delaware business trust
By:UNION PACIFIC RESOURCES GROUP INC.,
as Depositor
By: /s/ MORRIS B. SMITH
--------------------------------
Morris B. Smith
Vice President and
Chief Financial Officer
UPRG CAPITAL TRUST III,
a Delaware business trust
By: UNION PACIFIC RESOURCES GROUP
INC.,
as Depositor
By: /s/ MORRIS B. SMITH
--------------------------------
Morris B. Smith
Vice President and
Chief Financial Officer
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ---------- -------------------------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
1.1 -- Form of Underwriting Agreement for Debt Securities.
**1.2 -- Form of Underwriting Agreement for Preferred Stock and Common Stock.
**1.3 -- Form of Underwriting Agreement for Trust Preferred Securities.
*1.4 -- Form of Distribution Agreement (incorporated herein by reference to Exhibit 1.2 to the
Company's Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
*3.1 -- Amended and Restated Articles of Incorporation of Union Pacific Resources Group Inc.
(incorporated herein by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (No. 33-95398) filed October 10, 1995).
*3.2 -- Amended and Restated By-laws of Union Pacific Resources Group Inc. (incorporated
herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-1
(No. 33-95398) filed October 10, 1995).
3.3 -- Memorandum of Association of UPR Capital Company.
3.4 -- Articles of Association of UPR Capital Company.
3.5 -- Certificate and Articles of Continuance of UPRI.
3.6 -- By-law No. 1 of UPRI.
3.7 -- By-law No. 2 of UPRI.
4.1 -- Form of Indenture.
**4.2 -- Form of Subordinated Indenture (including form of Subordinated Debt Security).
**4.3 -- Form of Warrant Agreement.
*4.4 -- Form of Debt Security (incorporated herein by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
**4.5 -- Form of Debt Security.
*4.6 -- Form of Fixed Rate Note (incorporated herein by reference to Exhibit 4.4 to the
Company's Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
*4.7 -- Form of Floating Rate Note (incorporated herein by reference to Exhibit 4.5 to the
Company's Registration Statement on Form S-3 (No. 333-2984) filed March 29, 1996).
**4.8 -- Form of Stock Purchase Contract Agreement.
*4.9 -- Certificate of Trust of UPRG Capital Trust I (incorporated herein by reference to
Exhibit 4.7 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
*4.10 -- Certificate of Trust of UPRG Capital Trust II (incorporated herein by reference to
Exhibit 4.8 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
*4.11 -- Certificate of Trust of UPRG Capital Trust III (incorporated herein by reference to
Exhibit 4.9 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
*4.12 -- Declaration of Trust of UPRG Capital Trust I (incorporated herein by reference to
Exhibit 4.10 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
*4.13 -- Declaration of Trust of UPRG Capital Trust II (incorporated herein by reference to
Exhibit 4.11 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ---------- -------------------------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
*4.14 -- Declaration of Trust of UPRG Capital Trust III (incorporated herein by reference to
Exhibit 4.12 to the Company's Registration Statement on Form S-3 (No. 33-22655) filed
March 3, 1997).
5.1 -- Opinion and consent of Mark L. Jones; Managing Senior Counsel for the Company,
regarding the Senior Debt Securities, the Preferred Stock, the Common Stock and the
Warrants.
5.2 -- Opinion and consent of Bennett Jones Verchere, special Canadian counsel for UPRI,
regarding the Subsidiary Senior Debt Securities.
5.3 -- Opinion and consent of McInnes Cooper & Robertson, special Canadian counsel for UPR
Capital Company regarding the Subsidiary Senior Debt Securities.
**5.4 -- Opinion and consent of Mark L. Jones; Managing Senior Counsel for the Company,
regarding the Subordinated Debt Securities.
**5.5 -- Opinion and consent of Bennett Jones Verchere, special Canadian counsel for UPRI,
regarding the Subsidiary Subordinated Debt Securities.
**5.6 -- Opinion and consent of McInnes Cooper & Robertson, special Canadian counsel for UPR
Capital Company regarding the Subsidiary Subordinated Debt Securities.
**5.7 -- Opinion and consent of Richards, Layton & Finger.
12 -- Computation of Ratio of Earnings to Fixed Charges.
15.1 -- Awareness Letter of Deloitte & Touche LLP.
15.2 -- Awareness Letter of Arthur Andersen LLP.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of Deloitte & Touche.
23.3 -- Consent of Arthur Andersen LLP.
24.1 -- Power of Attorney of Lynne V. Cheney, Director of the Company.
24.2 -- Power of Attorney of Preston M. Geren III, Director of the Company.
24.3 -- Power of Attorney of Lawrence M. Jones, Director of the Company.
24.4 -- Power of Attorney of Drew Lewis, Director of the Company.
24.5 -- Power of Attorney of Claudine B. Malone, Director of the Company.
24.6 -- Power of Attorney of John W. Poduska, Sr., Ph.D., Director of the Company.
24.7 -- Power of Attorney of Michael E. Rossi, Director of the Company.
24.8 -- Power of Attorney of Samuel K. Skinner, Director of the Company.
24.9 -- Power of Attorney of James R. Thompson, Director of the Company.
24.10 -- Power of Attorney of the Directors of UPRI.
24.11 -- Power of Attorney of the Directors of UPR Capital Company.
25.1 -- Statement on Form T-1 of the eligibility of The Bank of New York, as trustee under the
Indenture.
**25.2 -- Statement on Form T-1 of the eligibility of the Subordinated Trustee, as trustee under
the Subordinated Indenture.
**25.3 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust I.
**25.4 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust II.
**25.5 -- Statement on Form T-1 of the eligibility of , as trustee under the Amended and
Restated Declaration of Trust of UPRG Capital Trust III.
**25.6 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust
Guarantee of the Company for the benefit of the holders of Trust Preferred Securities
of the UPRG Capital Trust I.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ---------- -------------------------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
**25.7 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust
Guarantee of the Company for the benefit of the holders of Trust Preferred Securities
of UPRG Capital Trust II.
**25.8 -- Statement on Form T-1 of the eligibility of , as trustee under the Trust
Guarantee of the Company for the benefit of the holders of Trust Preferred Securities
of UPRG Capital Trust III.
</TABLE>
- ------------------
* Incorporated herein by reference.
** To be filed either by amendment or as an exhibit to an Exchange Act Report
and incorporated herein by reference.
<PAGE>
Exhibit 1.1
[UNION PACIFIC RESOURCES GROUP INC.]
Debt Securities
[FORM OF
UNDERWRITING AGREEMENT]
1. Introduction. Union Pacific Resources Group Inc., a Utah
corporation (the "Company"), proposes to issue and sell from time to
time certain of its debt securities registered under the registration
statement referred to in Section 2(a) ("Registered Securities"). The
Registered Securities will be issued under an indenture (the
"Indenture"), dated as of , , between the Company and the Bank of New
York as Trustee, in one or more series, which series may vary as to
interest rates, maturities, redemption provisions, selling prices and
other terms, with all such terms for any particular series of the
Registered Securities being determined at the time of sale. Particular
series of the Registered Securities will be sold pursuant to a Terms
Agreement referred to in Section 3, for resale in accordance with the
terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Securities". The firm or firms which
agree to purchase the Securities are hereinafter referred to as the
"Underwriters" of such Securities, and the representative or
representatives of the Underwriters, if any, specified in a Terms
Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does
not specify any representative of the Underwriters, the term
"Representatives", as used in this Agreement (other than in Sections
2(a), 5(b) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) Registration Statement. (i) The Company meets the
requirements for use of Form S-3 under the Securities Act of 1933,
as amended (the "1933 Act") and has prepared and filed with the
Securities and Exchange Commission (the "Commission") a
registration statement (file number ) on Form S-3 for the
registration under the 1933 Act of the offering and sale of the
<PAGE>
2
Registered Securities. Such registration statement has become
effective. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of which
has previously been furnished to you. The Company will next file
with the Commission one of the following: (1) prior to the
Effective Date of such registration statement, a further amendment
to such registration statement, including the form of final
prospectus, (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and
424(b), or (3) a final prospectus in accordance with Rules 415 and
424(b). In the case of clause (2), the Company has included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
1933 Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other
such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by
Regulation S-K Item 512(a), the Registration Statement, at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(x). Upon the request of the Representatives, but not
without the agreement of the Representatives, the Company will
also file a Rule 462(b) registration statement in accordance with
Rule 462(b) ("Rule 462(b)") under the 1933 Act.
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the
Prospectus (and any supplements thereto) will, comply in all
material respects
<PAGE>
3
with the applicable requirements of the 1933 Act and the Trust
Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading; on the Effective Date and on the Closing
Date the Indenture did or will comply in all material respects
with the requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (together with any supplement thereto) will not,
include any 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; provided, however, that the Company makes no
representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of the Trustee or (ii) the information contained in or omitted
from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished herein or in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically
for inclusion in the Registration Statement or the Prospectus (or
any supplement thereto).
(b) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of [jurisdiction of incorporation] with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
<PAGE>
4
property or the conduct of business, except where the failure to
so qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or the
business affairs of the Company and its subsidiaries considered as
one enterprise.
(c) Incorporated Documents. The documents incorporated by
reference in the Registration Statement and the Prospectus, at the
time they were filed with the Commission, complied in all material
respects with the requirements of the Securities Exchange Act of
1934 (the "1934 Act") and the applicable Rules and Regulations,
and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an
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.
(d) Financial Statements. The financial statements and any
related notes of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration
Statement and the Prospectus present fairly in all material
respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods
specified; and, except as stated therein, said financial
statements and related notes have been prepared in conformity with
generally accepted accounting principles in the United States
applied on a consistent basis; and said notes included in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein.
(e) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and
delivery by the Underwriters, will be a valid and binding
agreement of the Company; the Indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid and
<PAGE>
5
binding obligation of the Company enforceable in accordance with
its terms; the Securities have been duly and validly authorized
for issuance, offer and sale pursuant to this Agreement and, when
issued, authenticated and delivered pursuant to the provisions of
this Agreement and the Indenture, the Securities will constitute
valid and legally binding obligations of the Company enforceable
in accordance with their terms, except as enforcement of the
Indenture or the Securities may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to
or affecting enforcement of creditors' rights generally or by
general equity principles; the Securities and the Indenture will
be substantially in the form heretofore delivered to the
Underwriters and conform in all material respects to all
statements relating thereto contained in the Registration
Statement and the Prospectus; and the Securities will be entitled
to the benefits provided by the Indenture.
(f) No Defaults. The Company is not in violation of its
certificate of incorporation or by-laws, or other organizational
documents, or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which it or
its properties is bound; the execution and delivery of this
Agreement and the Indenture and the consummation of the
transactions contemplated herein, therein and pursuant to any
Terms Agreement referred to in Section 3 have been duly authorized
by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company is a party or by which it
may be bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation
of the provisions of the certificate of incorporation or by-laws,
or other organizational documents, of the Company or any law,
<PAGE>
6
administrative regulation or administrative or court order or
decree applicable to the Company.
(g) Legal Proceedings; Contracts. Except as may be set forth
or incorporated by reference in the Registration Statement, there
is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened against or affecting,
the Company or any of its subsidiaries, which might, in the
opinion of the Company, result in a material adverse effect on the
condition, financial or otherwise, or on the business affairs of
the Company and its subsidiaries considered as one enterprise, or
might materially and adversely affect the properties or assets
thereof or might materially and adversely affect the consummation
of this Agreement or any Terms Agreement referred to in Section 3;
and there are no contracts or documents of the Company or any of
its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the applicable Rules
and Regulations which have not been so filed.
(h) Relations with Cuba. The Company is in compliance with all
provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba, and if the
Company or any of its subsidiaries commences engaging in business
with the government of Cuba or with any person or affiliate
located in Cuba, or if the information reported in the Prospectus,
if any, concerning the business of the Company or any of its
subsidiaries with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Florida Department of Banking and Finance (the "Department")
notice of such business or change, as appropriate, in a form
acceptable to the Department.
(i) Investment Company Act. The Company is not and, after
giving effect to the offering and sale of the Securities and the
application of the net proceeds thereof as described in the
Prospectus, will not be an "investment company" or a person
directly or indirectly
<PAGE>
7
controlled by an "investment company", as defined in the
Investment Company Act of 1940, as amended.
(j) Registration Rights. No holders of securities of the
Company not currently registered under the 1933 Act have rights to
the registration of such securities under the Registration
Statement.
3. Purchase and Offering of Securities. The obligation of the
Underwriters to purchase the Registered Securities will be evidenced by
an exchange of telegraphic or other written communications ("Terms
Agreement") at the time the Company determines to sell the Registered
Securities. The Terms Agreement will generally be in the form attached
hereto as Annex I and will incorporate by reference the provisions of
this Agreement, except as otherwise provided therein, and will specify
the firm or firms which will be Underwriters, the names of any
Representatives, the principal amount to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and the
terms of the Registered Securities not already specified in the
Indenture, including, but not limited to, interest rate, maturity, any
redemption provisions and any sinking fund requirements and whether any
of the Securities may be sold to institutional investors pursuant to
Delayed Delivery Contracts (as defined below). The Terms Agreement will
also specify the time and date of delivery and payment (such time and
date, or such other time not later than seven full business days
thereafter as the Representatives and the Company agree as the time for
payment and delivery, being herein and in the Terms Agreement referred
to as the "Closing Date"), the place of delivery and payment and any
details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Registered
Securities. The obligations of the Underwriters to purchase the
Registered Securities will be several and not joint. It is understood
that the Underwriters propose to offer the Registered Securities for
sale as set forth in the Prospectus. The Registered Securities
delivered to the Underwriters on the Closing Date will be in definitive
fully registered form, in such denominations and registered in such
names as the Underwriters may request. Delivery of Registered
Securities shall be made to the Representatives for the respective
<PAGE>
8
accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company.
Delivery of Registered Securities shall be made through the
facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the Terms Agreement provides for sales of Securities pursuant
to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Securities pursuant to delayed delivery
contracts substantially in the form of Annex II attached hereto
("Delayed Delivery Contracts") with such changes therein as the Company
may authorize or approve. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and
educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the
accounts of the Underwriters, the fee set forth in such Terms Agreement
in respect of the principal amount of Registered Securities to be sold
pursuant to Delayed Delivery Contracts ("Contract Securities"). The
Underwriters will not have any responsibility in respect of the
validity or the performance of Delayed Delivery Contracts. If the
Company executes and delivers Delayed Delivery Contracts, the Contract
Securities will be deducted from the Securities to be purchased by the
several Underwriters and the aggregate principal amount of Securities
to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Registered Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the
extent that the Representatives determine that such reduction shall be
otherwise than pro rata and so advise the Company. The Company will
advise the Representatives not later than the business day prior to the
Closing Date of the principal amount of Contract Securities.
4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to Cravath, Swaine & Moore,
special counsel for the Underwriters (or any other counsel named as
counsel for the Underwriters in any Terms Agreement), one signed copy
of the
<PAGE>
9
Registration Statement relating to the Registered Securities, including
all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Securities:
(a) The Company will advise the Representatives promptly of
any proposal to amend or supplement the Registration Statement or
the Prospectus and will afford the Representatives a reasonable
opportunity to comment on any such proposed amendment or
supplement; and the Company will also advise the Representatives
promptly of the filing of any such amendment or supplement and of
the institution by the Commission of any stop order proceedings in
respect of the Registration Statement or of any part thereof and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the 1933 Act, any
event occurs as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time
to amend the Prospectus to comply with the 1933 Act, the Company
promptly will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of Section 11(a) of
the 1933 Act and Rule 158 under the 1933 Act.
(d) The Company will furnish to the Representatives copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus
supplement, the Prospec-
<PAGE>
10
tus and all amendments and supplements to such documents, in each
case as soon as available and in such quantities as are reasonably
requested.
(e) The Company will arrange for the qualification of the
Registered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as
the Representatives designate and will continue such
qualifications in effect so long as required for the distribution.
(f) During the period of 5 years after the date of any Terms
Agreement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, if any, as soon
as practicable after the end of each fiscal year, a copy of its
annual report to stockholders for such year; and the Company will
furnish to the Representatives (i) as soon as available, a copy of
each report or definitive proxy statement of the Company filed
with the Commission under the 1934 Act or mailed to stockholders
and (ii) from time to time, such other information concerning the
Company as the Representatives may reasonably request.
(g) The Company will pay all reasonable expenses incident to
the performance of its obligations under this Agreement and will
reimburse the Underwriters for any expenses (including reasonable
fees and disbursements of counsel) incurred by them in connection
with qualification of the Registered Securities for sale and
determination of their eligibility for investment under the laws
of such jurisdictions as the Representatives may designate and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities and
for expenses incurred in distributing the Prospectus, any
preliminary prospectuses and any preliminary prospectus
supplements to Underwriters.
(h) For a period beginning at the time of execution of the
Terms Agreement and ending 10 days after the Closing Date, without
the prior consent of the Representatives, the Company will not
offer, sell,
<PAGE>
11
contract to sell or otherwise dispose of any United States
dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date
of issue.
5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the
Securities will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of Company officers made pursuant to the provisions hereof,
to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been
issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or any Underwriter,
shall be contemplated by the Commission.
(b) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company or its subsidiaries which,
in the judgment of a majority in interest of the Underwriters,
including any Representatives, materially impairs the investment
quality of the Securities; (ii) any downgrading in the rating of
the Company's debt securities by Moody's Investors Service, Inc.,
or Standard & Poor's Corporation; (iii) any suspension or
limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters, including any
Representatives, the effect of
<PAGE>
12
any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of
the sale of and payment for the Securities.
(c) The Representatives shall have received an opinion, dated
the Closing Date, of the Vice President and General Counsel of the
Company or other counsel satisfactory to the Representatives, to
the effect that:
(i) the Company has been duly incorporated and is
an existing corporation in good standing under the laws of
[jurisdiction of incorporation], with corporate power and
authority to own, lease and operate its properties and
conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in
which it owns or leases substantial properties, except where
the failure to so qualify and be in good standing would not
have a material adverse effect on the condition, financial
or otherwise, or on the business affairs of the Company and
its subsidiaries considered as one enterprise;
(ii) the Indenture has been duly authorized,
executed and delivered by the Company and has been duly
qualified under the Trust Indenture Act; the Securities have
been duly authorized; the Securities other than any Contract
Securities have been duly executed, authenticated, issued
and delivered; the Indenture and the Securities other than
any Contract Securities constitute, and any Contract
Securities, when executed, authenticated, issued and
delivered in the manner provided in the Indenture and sold
pursuant to Delayed Delivery Contracts, will constitute,
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to
<PAGE>
13
general equitable principles; and the Securities other than
any Contract Securities conform, and any Contract Securities,
when so issued and delivered and sold, will conform, to the
description thereof contained in the Prospectus;
(iii) no consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions
contemplated by the Terms Agreement (including the
provisions of this Agreement), except such as have been
obtained and made under the 1933 Act and the Trust Indenture
Act and such as may be required under state securities laws
in connection with the issuance or sale of the Securities by
the Company;
(iv) the execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of
this Agreement) and any Delayed Delivery Contracts and the
issuance and sale of the Securities and compliance with the
terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or
any court having jurisdiction over the Company or any of its
properties known to such counsel after reasonable inquiry or
any material agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of
the properties of the Company is subject, or the charter or
by-laws of the Company, and the Company has full power and
authority to authorize, issue and sell the Securities as
contemplated by the Terms Agreement (including the
provisions of this Agreement);
(v) the Registration Statement has become effective
under the 1933 Act, and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of
the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been
<PAGE>
14
instituted or are pending or contemplated under the 1933
Act;
(vi) the Terms Agreement (including the provisions
of this Agreement) and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
and
(vii) the Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the net proceeds thereof as described in the
Prospectus, will not be an "investment company" or a person
directly or indirectly controlled by an "investment
company", as defined in the Investment Company Act of 1940,
as amended.
In giving his opinion as aforesaid, counsel shall
additionally state that based on the information gained in the
course, in such counsel's role as General Counsel, of such
counsel's participation in certain meetings and making of certain
inquiries and investigations in connection with the preparation of
the Registration Statement and Prospectus, the Registration
Statement relating to the Registered Securities and each
post-effective amendment thereto, as of their respective effective
dates, the Registration Statement and the Prospectus, as of the
date the Prospectus was filed with the Commission and as of the
Closing Date, and any amendment or supplement thereto, as of its
date, appeared on their face to be appropriately responsive in all
material respects to the requirements of the 1933 Act, the Trust
Indenture Act and the Rules and Regulations; nothing has come to
such counsel's attention in the course of performing such
activities that caused such counsel to believe that the
Registration Statement, as of its effective date, the Registration
Statement or the Prospectus, as of the date the Prospectus was
filed with the Commission and as of the Closing Date, or any such
amendment or supplement, as of its date, contain or 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 statements
<PAGE>
15
therein not misleading, provided, however, that such counsel
may state that in rendering the opinions set forth in this
paragraph, such counsel does not assume responsibility for the
accuracy or completeness of statements made in the Registration
Statement and Prospectus; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus.
In rendering such opinion, such Vice President and General
Counsel or other counsel may rely as to the incorporation of the
Company, the authorization, execution and delivery of the Terms
Agreement and all other matters governed by [jurisdiction of
incorporation] law upon the opinion of [local counsel], special
[jurisdiction of incorporation] Counsel to the Company, or other
[jurisdiction of incorporation] counsel satisfactory to the
Representatives, a copy of which shall be delivered concurrently
with the opinion of such Vice President and General Counsel or
other counsel.
(d) The Representatives shall have received an opinion, dated
the Closing Date, of [local counsel], special [jurisdiction of
incorporation] counsel for the Company, or such other counsel as
shall be acceptable to the Underwriters, to the effect that:
(i) the Company has been duly incorporated and is
an existing corporation in good standing under the laws of
the [jurisdiction of incorporation], with corporate power
and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus;
(ii) the Terms Agreement (including the provisions
of this Agreement) and any Delayed Delivery Contract and the
Indenture have been duly authorized, executed and delivered
by the Company; the Securities have been duly authorized;
<PAGE>
16
(iii) no consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court of the [jurisdiction of incorporation] is required for
the consummation of the transactions contemplated by the
Terms Agreement (including the provisions of this
Agreement), except such as may be required under the blue
sky laws of the [jurisdiction of incorporation] in
connection with the issuance or sale of the Securities by
the Company; and
(iv) the execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of
this Agreement) and any Delayed Delivery Contract and the
issuance and sale of the Securities and compliance with the
terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body of
the [jurisdiction of incorporation] or any court of the
[jurisdiction of incorporation] having jurisdiction over the
Company or any of its properties or the charter or by-laws
of the Company, and the Company has full power and authority
to authorize, issue and sell the Securities as contemplated
by the Terms Agreement (including the provisions of this
Agreement).
(e) The Representatives shall have received from Cravath,
Swaine & Moore, special counsel for the Underwriters (or any other
counsel named as counsel for the Underwriters in any Terms
Agreement), such opinion or opinions, dated the Closing Date, with
respect to the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as the
Representatives may 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. In rendering such
opinion, Cravath, Swaine & Moore (or such other counsel for the
Underwriters named in any Terms Agreement) may rely as
<PAGE>
17
to the incorporation of the Company, the authorization, execution
and delivery of the Terms Agreement and all other matters governed
by [jurisdiction of incorporation] law upon the opinion of [local
counsel] or such other counsel as referred to above.
(f) The Representatives shall have received a certificate,
dated the Closing Date, of the Chairman, the President, Chief
Executive Officer, Chief Financial Officer, any Executive or
Senior Vice President, the Treasurer or any Vice-President and a
principal financial or accounting officer of the Company in which
such officers, to the best of their knowledge after reasonable
investigation, state that the representations and warranties of
the Company in this Agreement are true and correct, that the
Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof
has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that,
subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change in the
financial position or results of operations of the Company and its
subsidiaries, taken as a whole, except as set forth in or
contemplated by the Prospectus or as described in such
certificate.
(g) The Representatives shall have received a letter, dated
the Closing Date, of [independent public auditors] or any
successor independent public auditors of Company in form and
substance satisfactory to the Representatives, to the effect that:
(i) They are independent public accountants with
respect to the Company and its subsidiaries within the
meaning of the 1933 Act and the applicable Rules and
Regulations.
(ii) In their opinion, the financial statements and any
supporting schedules, including any pro forma financial
statements, of the Company
<PAGE>
18
and its subsidiaries examined by them and included or
incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the Rules and
Regulations promulgated thereunder with respect to
registration statements on Form S-3 and the 1934 Act and the
Rules and Regulations promulgated thereunder.
(iii) They have performed specified procedures, not
constituting an audit, including a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the latest available interim financial
statements of the Company and its subsidiaries, a reading of
the minute books of the Company since the end of the most
recent fiscal year with respect to which an audit report has
been issued, inquiries of and discussions with certain
officials of the Company and such subsidiaries responsible
for financial and accounting matters with respect to the
unaudited consolidated financial statements included in the
Registration Statement and Prospectus and the latest
available interim unaudited financial statements of the
Company and its subsidiaries, and such other inquiries and
procedures as may be specified in such letter, and on the
basis of such inquiries and procedures nothing came to their
attention that caused them to believe that: (A) the
unaudited consolidated financial statements of the Company
and its subsidiaries included in the Registration Statement
and Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
1934 Act and the applicable Rules and Regulations or were
not fairly presented in conformity with generally accepted
accounting principles in the United States applied on a
basis consistent with that of the audited financial
statements included therein, (B) at the date of the latest
available balance sheet, there was any change in the
consolidated capital stock or any increase in
<PAGE>
19
consolidated long-term debt of the Company and its
subsidiaries or any decrease in the consolidated net assets or
consolidated stockholders' equity of the Company and its
subsidiaries, or any increase or decrease in any other items
specified by the Representatives, in each case as compared
with the amounts shown on the most recent consolidated balance
sheet of the Company and its subsidiaries included in the
Registration Statement and Prospectus or, during the period
from the date of the latest income statement included in the
Prospectus to the closing date of the latest available income
statement, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
revenues or net income of the Company and its subsidiaries, or
any increase or decrease in any other items specified by the
Representatives, or (C) at a specified date not more than five
days prior to the date of such letter, there was any change in
the consolidated capital stock or consolidated stockholders'
equity or any increase in long-term debt of the Company and
its subsidiaries, or any increase or decrease in any other
items reasonably specified by the Underwriters, in each case
as compared with the amounts shown on the most recent
consolidated balance sheet of the Company and its subsidiaries
included in the Registration Statement and Prospectus, except
in each such case as set forth in or contemplated by the
Registration Statement and Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed
to by the Representatives and the Company.
(iv) On the basis of a reading of the unaudited pro
forma financial statements included or incorporated in the
Registration Statement, if any, and the Prospectus (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
<PAGE>
20
adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention that
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 of the Rules and Regulations.
(v) In addition to the examination referred to in
their report included or incorporated by reference in the
Registration Statement and the Prospectus, and the limited
procedures referred to in clause (iii) above, they have
carried out certain other specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information which are included or
incorporated by reference in the Registration Statement and
Prospectus and which are specified by the Representatives,
and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting,
financial and other records of the Company and its
subsidiaries identified in such letter.
(h) On the Closing Date, counsel to the Representatives shall
have been furnished with such documents and opinions as such
counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Securities as herein
contemplated and related proceedings, or in order to evidence the
accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection
with the issuance and sale of Securities as herein contemplated
shall be satisfactory in form and substance to the Representatives
and to counsel to the Representatives.
6. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims,
<PAGE>
21
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 Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; 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 an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance
upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company
may become subject, under the 1933 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 Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use
therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred.
<PAGE>
22
(c) Promptly after receipt by an indemnified party under this
Section 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 subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (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 satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters
<PAGE>
23
on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue 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 subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and
not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the 1933 Act;
and the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has
signed the Registration Statement and to each person, if any, who
controls the
<PAGE>
24
Company within the meaning of the 1933 Act.
7. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Securities under the Terms
Agreement and the aggregate principal amount of the Securities that
such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total principal amount of the
Securities, the Representatives may make arrangements satisfactory to
the Company for the purchase of such Securities by other persons,
including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under this
Agreement and the Terms Agreement, to purchase the Securities that such
defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal
amount of the Securities with respect to which such default or defaults
occur exceeds 10% of the total principal amount of the Securities and
arrangements satisfactory to the Representatives and the Company for
the purchase of such Securities by other persons are not made within 36
hours after such default, such Terms Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company,
except as provided in Section 8. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default. The respective commitments of the several
Underwriters for the purposes of this Section shall be determined
without regard to reduction in the respective Underwriters' obligations
to purchase the principal amounts of the Securities set forth opposite
their names in the Terms Agreement as a result of Delayed Delivery
Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section
will not apply if the Terms Agreement specifies that such obligations
and agreements will not apply.
8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and
other statements of the
<PAGE>
25
Company or its officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of
their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the
Securities. If the Terms Agreement is terminated pursuant to Section 7
or if for any reason the purchase of the Securities by the Underwriters
under the Terms Agreement is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the
purchase of the Securities by the Underwriters is not consummated for
any reason other than because of the termination of the Terms Agreement
pursuant to Section 7 or the occurrence of any event specified in
Section 5(b), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the
Securities.
9. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to them at their addresses furnished to the Company in
writing for the purpose of communications hereunder or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it
at 801 Cherry Street, Fort Worth, Texas 76102, Attention: Treasurer.
10. Certain Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"1933 Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
<PAGE>
26
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or
become effective.
"Execution Time" shall mean the date and time that any Terms
Agreement referred to in Section 3 is executed and delivered by
the Company and the Underwriters.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 2(a) and any preliminary prospectus
included in the Registration Statement at the Effective Date that
omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Securities included in the Registration Statement at the Effective
Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A", "Rule 462" and
"Regulation S-K" refer to such rules or regulation under the 1933
Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof
<PAGE>
27
permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration
statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the Company and such Underwriters as are identified
in the Terms Agreement and their respective successors and the officers
and directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
12. Applicable Law. This Agreement and the Terms Agreement
shall be governed by, and construed in accordance with, the laws of the
State of New York.
<PAGE>
ANNEX I
[UNION PACIFIC RESOURCES GROUP INC.]
(the "Company")
Debt Securities
TERMS AGREEMENT
________________ , 199_
[Union Pacific Resources Group Inc.
801 Cherry Street
Mail Station 3213
Fort Worth, TX 76102]
Attention:
Dear Sirs:
[On behalf of the several Underwriters named in Schedule A
hereto and for their respective accounts, we--We] offer to purchase, on and
subject to the terms and conditions of the Underwriting Agreement filed by the
Company on Form 8-K (the "Underwriting Agreement"), the following securities
(the "Securities") on the following terms:
Title: [ ]% [Floating Rate]--Notes--Debentures--Bonds--
Due .
Principal Amount: $
Interest: [ ]% per annum, from , 19 , payable
semiannually on and commencing , 19 , to holders of record on
the preceding or , as the case may be.
Maturity:
Optional Redemption:
Sinking Fund:
<PAGE>
2
Delayed Delivery Contracts: [None.] [Delivery Date[s] shall
be , 19 . Underwriter['s][s'] fee is [ ]% of the principal amount of
the Contract Securities.]
Purchase Price: [ ]% of principal amount plus accrued
interest [ , if any,] from , 19 .
Expected Reoffering Price: [ ]% of principal amount,
subject to change by the undersigned.
Closing: a.m. on , 19 , at the offices of
[Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, NY
10019], in same day funds.
Name[s] and Address[es] of Representative[s]:
The respective principal amounts of the Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
[If appropriate, insert--It is understood that we may, with
your consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by such
additional Underwriters.]
The provisions of the Underwriting Agreement are
incorporated herein by reference. [If appropriate, insert--, except that the
obligations and agreements set forth in Section 7 ("Default of Underwriters")
of the Underwriting Agreement shall not apply to the obligations of the
Underwriters to purchase the above Securities] [If appropriate, insert--,
except that the provisions of Section are amended as follows: ].
The Securities will be made available for checking at the
offices of [Cravath, Swaine & Moore] at least 24 hours prior to the Closing
Date.
<PAGE>
3
[Please signify your acceptance of our offer by signing the
enclosed response to us in the space provided and returning it to us by mail
or hand delivery.]
[Please signify your acceptance of the foregoing by return
wire not later than P.M. today.]
Very truly yours,
[Insert name(s) of Representatives or
Underwriters]
[On behalf of--themselves--itself--
and as Representative[s] of the
Several] [As] [Underwriter[s]]
[By [lead manager]]
By
-------------------------------
[Insert Title]
If the Securities are denominated in a currency other than
United States dollars, make appropriate modifications to provisions of Terms
Agreement (e.g., type of funds specified under "Closing") and consider
including in the Terms Agreement such changes and additions to the
Underwriting Agreement as may be appropriate in the circumstances, e.g.,
expanding Section 4(h) to cover debt securities denominated in the currency in
which the Securities are denominated, expanding Section 5(b)(iv) to cover a
banking moratorium declared by authorities in the country of such currency,
expanding Section 5(b)(v) to cover a change or prospective change in, or
governmental action affecting, exchange controls applicable to such currency,
and modifying Section 5(e) to permit a statement to the effect that
enforcement of the Indenture and the Securities is subject to provisions of
law which may require that a judgment for money damages rendered by a court in
the United States be expressed only in United States dollars and appropriate
exceptions as to any provisions requiring payment of additional amounts. Also
consider requiring an opinion of counsel for the Company confirming
information as
<PAGE>
4
to United States tax matters in the Prospectus and an opinion of foreign counsel
for the Company regarding such matters as foreign consents, approvals,
authorizations, licenses, waivers, withholding taxes, transfer or stamp taxes
and any information as to foreign laws in the Prospectus.
<PAGE>
5
SCHEDULE A
Underwriter Principal Amount
----------- ----------------
$
------------
Total................................ $
<PAGE>
6
To: [Insert name(s) of Representatives or Underwriters]
As [Representative[s] of the Several] Underwriter[s],
[c/o [name and address of lead manager]
We accept the offer contained in your [letter] [wire], dated ,
19 , relating to $ million principal amount of our [insert title of
Securities]. We also confirm that, to the best of our knowledge after reasonable
investigation, the representations and warranties of the undersigned in the
Underwriting Agreement filed as an exhibit to the undersigned's registration
statement on Form S-3 (No. 33- ) (the "Underwriting Agreement") are true
and correct, no stop order suspending the effectiveness of the Registration
Statement (as defined in the Underwriting Agreement) or of any part thereof has
been issued and no proceedings for that purpose have been instituted or, to the
knowledge of the undersigned, are contemplated by the Securities and Exchange
Commission and, subsequent to the respective dates of the most recent financial
statements in the Prospectus (as defined in the Underwriting Agreement), there
has been no material adverse change in the financial position or results of
operations of the undersigned and its subsidiaries, taken as a whole, except as
set forth in or contemplated by the Prospectus.
Very truly yours,
[UNION PACIFIC RESOURCES
GROUP INC.]
by
------------------------
Name:
Title:
<PAGE>
ANNEX II
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M., New York
time, on , 199 .) 1/
DELAYED DELIVERY CONTRACT
[date]
[UNION PACIFIC RESOURCES GROUP INC.]
c/o [name and address of
lead manager]
Gentlemen:
The undersigned hereby agrees to purchase from [Union
Pacific Resources Group Inc., a Utah corporation] ("Company"), and the Company
agrees to sell to the undersigned, [If one delayed closing, insert--as of the
date hereof, for delivery on , 19 ("Delivery Date")]
[$] ..............
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated , 19 and a Prospectus
Supplement dated , 19 relating thereto, receipt of copies of
which is hereby acknowledged, at % of the principal amount thereof plus
accrued interest, if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
- --------
1/ Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
<PAGE>
2
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the
date hereof, for delivery on the dates set forth below, Securities in the
principal amounts set forth below:
Delivery Date Principal Amount
------------- ----------------
----------------------- ------------
----------------------- ------------
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed
to purchase for delivery on--the--each--Delivery Date shall be made to the
Company or its order in same day funds at the office of
at
.M. on--the--such--Delivery Date upon delivery to the
undersigned of the Securities to be purchased by the undersigned--for delivery
on such Delivery Date--in definitive fully registered form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed
delivery and payment are for the sole convenience of the undersigned; that the
purchase hereunder of Securities is to be regarded in all respects as a
purchase as of the date of this Contract; that the obligation of the Company
to make delivery of and accept payment for, and the obligation of the
undersigned to take delivery of and make payment for, Securities
on--the--each--Delivery Date shall be subject only to the conditions that (1)
investment in the Securities shall not at--the--such--Delivery Date be
prohibited under the laws of any jurisdiction in the United States to which
the undersigned is subject and (2) the Company shall have sold to the
Underwriters the total principal amount of the Securities less the principal
amount thereof covered by this
<PAGE>
3
and other similar Contracts. The undersigned represents that its investment in
the Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters
the Company will mail or deliver to the undersigned at its address set forth
below notice to such effect, accompanied by a copy of the opinion of counsel
for the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding
upon the parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is
in the Company's sole discretion and, without limiting the foregoing, need not
be on a first-come, first-served basis. If this Contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered.
Yours very truly,
-------------------------------
(Name of Purchaser)
By
----------------------------
----------------------------
(Title of Signatory)
----------------------------
----------------------------
(Address of Purchaser)
<PAGE>
4
Accepted, as of the above date.
[UNION PACIFIC RESOURCES GROUP INC.]
By
----------------------------
[Insert Title]
<PAGE>
Exhibit 3.3
COMPANIES ACT
CHAPTER 81, R.S.N.S. 1989
MEMORANDUM OF ASSOCIATION OF UPR CAPITAL COMPANY
- --------------------------------------------------------------------------------
1 - The name of the Company is UPR CAPITAL COMPANY.
- --------------------------------------------------------------------------------
2 - There are no restrictions on the objects and powers of the
Company.
- --------------------------------------------------------------------------------
3 - Pursuant to subsection (11) of Section 26 of the Companies
Act, to the intent that subsection (9) of Section 26 not apply
to the Company, the following powers are hereby expressly
conferred upon the Company:
The Company shall have power to
(a) sell or dispose of its undertaking or a
substantial part thereof;
(b) subject to the provisions of the Act with
respect to reduction of capital,
distribute any of its property in specie
among its members; and
(c) amalgamate with any company or other body of
persons.
- --------------------------------------------------------------------------------
4 - The liability of all of the members is unlimited.
- --------------------------------------------------------------------------------
5 - The undersigned, whose name and address is subscribed, is
desirous of being formed into a company, in pursuance of this
Memorandum of Association, and agrees to take the number and
kind of shares in the capital stock of the company set
opposite its name.
- --------------------------------------------------------------------------------
NAME, ADDRESS AND OCCUPATION NAME AND KIND OF SHARES
OF SUBSCRIBER TAKEN BY THE SUBSCRIBER
- --------------------------------------------------------------------------------
2435239 Nova Scotia Limited One (1) common share without
Per: Mary M. Rowarth nominal or par value
Assistant Secretary
1601 Lower Water Street
P.O. Box 730
Halifax, Nova Scotia
B3J2V1
a Body Corporate
- --------------------------------------------------------------------------------
TOTAL SHARES TAKEN: One (1) Common share without nominal or par value.
- --------------------------------------------------------------------------------
DATED the 23rd day of March, 1998.
WITNESS to the above signature: /s/ Valerie Vaughan MacKenzie
- --------------------------------------------------------------------------------
NOTE: Each subscriber must write his name, his full post office address, and
his occupation, all in his own handwriting. Each subscriber must write,
in words, and in his own handwriting, the number of shares he takes.
<PAGE>
Exhibit 3.4
COMPANIES ACT
(NOVA SCOTIA)
UNLIMITED COMPANY
ARTICLES OF ASSOCIATION
OF
UPR CAPITAL COMPANY
-----------
1. In these Articles, unless there be something in the subject or
context inconsistent therewith:
"Act" means the Companies Act (Nova Scotia) as amended;
"Board" means the directors of the Company for the time being;
"Company" means the Company named above;
"dividend" includes bonus;
"member" and "Shareholder" are used interchangeably;
"Memorandum" means the Memorandum of Association of the
Company and all amendments thereto;
"Month" means calendar month;
"Office" means the registered office for the time being of the
Company;
"Proxyholder" includes an alternate proxyholder;
"Register" means the register of members to be kept pursuant
to Section 42 of the Act;
"Registrar" means the Registrar of Joint Stock Companies for
the time being;
"Reporting Company" and "Reporting Issuer" have the meanings
given to them respectively by the Act;
"Secretary" includes any person appointed to perform the
duties of Secretary of the Company temporarily;
"share" shall, for greater certainty, include a share in the
capital stock of the Company designated as a "Common Share";
<PAGE>
2
"Shareholder" means member as that term is used in the Act in
connection with an unlimited company having share capital;
"Special Resolution" has the meaning assigned by Section 87 of
the Act;
"these Presents" and "these Articles" includes these Articles
of Association (and schedules thereto) and any modification or
alteration thereof for the time being in force;
"written" and "in writing" mean and include words printed,
lithographed, represented or reproduced in any mode in a
visible form;
Words importing the singular number only, include the plural
number and vice versa;
Words importing the masculine gender only, include the
feminine gender; and
Words importing persons include corporations.
2. The regulations contained in Table "A" in the first schedule
to the Act shall not apply to the Company.
3. The directors may enter into and carry into effect or adopt and
carry into effect any agreement or agreements from time to time made by or with
the promoters of the Company by or on behalf of the Company with full power
nevertheless from time to time to agree to any modification of the terms of such
agreement or agreements either before or after execution thereof.
4. The directors may, out of any moneys of the Company for the time
being in their hands, pay all expenses incurred in or about the formation and
establishment of the Company, including the expenses of registration.
5. The business of the Company may be commenced as soon after
incorporation as the directors may think fit, and notwithstanding that part only
of the shares may have been allotted.
SHARES
6. The authorized capital of the Company consists of One Hundred
Thousand (100,000) Common shares without nominal or par value, with power to
divide the shares in the capital for the time being into several classes and/or
to attach thereto respectively any preferential, common, deferred or qualified
rights, privileges or conditions, including restrictions on voting and including
redemption or purchase of such shares, subject, however, to the Act and
amendments thereto.
7. Subject to the provisions of the agreement or agreements mentioned
in Article 3 hereof, the shares shall be under the control of the directors who
may allot or otherwise dispose of the same to such persons on such terms and
conditions and at such
<PAGE>
3
times as the directors may think fit and with full power to give to any person
the call of any shares during such time and for such consideration as the
directors think fit.
8. Shares may be registered in the names of any number of persons not
exceeding three as joint holders thereof.
9. Save as herein otherwise provided, the Company shall be entitled
to treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a Court of competent jurisdiction,
or as by statute required, be bound to recognize any equitable or other claim to
or interest in such share on the part of any other person.
CERTIFICATES
10. Certificates of title to shares shall be signed by the President
or Vice- President or a director and either the Secretary or an Assistant
Secretary or by such other person as the directors may authorize. The signature
of the President or Vice-President may be engraved, lithographed or printed upon
the certificates or any one or more of them, and any certificates bearing such
engraved, lithographed or printed signature of the President or Vice-President,
when signed by the Secretary or an Assistant Secretary or by such other persons
as the directors may authorize, shall be valid and binding upon the Company.
11. Every member shall be entitled to one certificate for all his
shares, or to several certificates each for one or more of such shares.
12. Where shares are registered in the names of two or more persons,
the Company shall not be bound to issue more than one certificate or one set of
certificates, and such certificate or set of certificates shall be delivered to
the person first named on the Register.
13. If any certificate be worn out or defaced, then upon production
thereof to the directors, they may order the same to be cancelled, and may issue
a new certificate in lieu thereof; and if any certificate is lost or destroyed,
then upon proof thereof to the satisfaction of the directors, and on such
indemnity as the directors deem adequate being given, a new certificate in lieu
thereof shall be given to the person entitled to such lost or destroyed
certificate.
14. The directors may cause to be kept in any place or places either
in or outside of Nova Scotia, one or more branch Registers.
LIENS ON SHARES AND LIABILITY OF MEMBERS
15. The Company shall have a first and paramount lien upon all shares
registered in the name of each member (whether solely or jointly with others)
and upon the proceeds of sale thereof for his debts, liabilities and other
engagements, solely or jointly with any other person, to or with the Company
whether the period for the payment, fulfilment or discharge thereof shall have
actually arrived or not, and no equitable interest in any share shall be created
except upon the condition that Article 9 of these Articles is to have full
effect. And such lien shall extend to all dividends from time to time declared
in respect of
<PAGE>
4
such shares. Unless otherwise agreed, the registration of a transfer of shares
shall operate as a waiver of the Company's lien, if any, on such shares.
16. For the purpose of enforcing such lien, the directors may sell the
shares subject thereto in such manner as they think fit; but no sale shall be
made until notice in writing of the intention to sell has been given to such
member, his executors, administrators, successors or assigns and default shall
have been made by him or them in the payment, fulfilment or discharge of such
debts, liabilities or engagements for seven (7) days after such notice. The net
proceeds of any such sale after payment of the cost of such sale shall be
applied in or towards the satisfaction of such debts, liabilities or engagements
and the residue, if any, paid to such member or his executors, administrators,
successors or assigns.
17. Upon any sale for enforcing a lien, in purported exercise of the
powers given by these Articles, the directors may cause the purchaser's name to
be entered in the Register in respect of the shares sold, and the purchaser
shall not be bound to see to the regularity of the proceedings or the
application of the purchase money and, after his name has been entered in the
Register in respect of such shares, the validity of the sale shall not be
impeached by any person and the remedy of any person aggrieved by this sale
shall be in damages only and against the Company exclusively.
18. For greater certainty and with reference to Article 4 of the
Memorandum, the liability of all of the members of the Company is unlimited.
TRANSFER OF SHARES
19. No share of any class or series of shares shall be transferred
except,
(a) with the prior consent of the directors of the
Company expressed by a resolution at a meeting of the
directors; or
(b) with the prior consent of the holders(s) of the
shares expressed by a resolution at a meeting of the
holders of the shares.
The Company shall decline to register any other purported transfer of shares by
any person in any circumstances.
20. The instrument of transfer of any share in the Company shall be
signed by the transferor and the transferor shall be deemed to remain the holder
of such share until the name of the transferee is entered in the Register in
respect thereof, and shall be entitled to receive any dividend declared thereon
before the registration of transfer.
<PAGE>
5
21. The instrument of transfer of any share shall be in writing in the
following form, or as near thereto as circumstances will permit:
For value received .................. hereby, sell, assign and transfer
unto ....................Shares of the Capital Stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint
................. attorney to transfer the said stock on the books of
the within named Company with the full power of substitution in the
premises,
Dated the day of , 19
WITNESS:
22. Every instrument of transfer shall be left at the Office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the Company may require to prove the title of the
transferor or his right to transfer the shares.
23. Every instrument of transfer shall, after the registration
thereof, remain in the custody of the Company, but any instrument of transfer
which the directors decline to register shall be returned to the person
depositing the same.
INCREASE AND REDUCTION OF CAPITAL
24. Subject to the rights, if any, of the holders of shares of any
class or series of shares to vote separately as a class or series thereon, the
Company in general meeting may, from time to time, increase the capital by the
creation or issue of new shares of such amount as it thinks expedient.
25. Subject to the rights, if any, of the holders of shares of any
class or series of shares to vote separately as a class or series thereon, the
Act and the restrictions on allotment, disposition and transferability in these
Articles, the new shares may be issued upon such terms and conditions, and with
such rights and privileges annexed thereto, as the general meeting resolving
upon the creation thereof shall direct; and if no direction be given, as the
directors shall determine, and in particular such shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets
of the Company, and with a special or without any right of voting.
26. Except so far as otherwise provided by the conditions of issue, or
by these Articles, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained including, without limitation, those provisions referring to
transfer of and the Company's lien on shares.
27. Subject to the rights, if any, of the holders of shares of any
class or series of shares to vote separately as a class or series thereon, the
Company shall reduce all or a portion of the paid-up capital on its shares by
returning same to the holders thereof if such reduction and return is authorized
by resolution at a meeting of the Shareholders who are the registered owners of
Seventy-Five Percent (75%) or more of the shares which entitle the holders
thereof to vote at a general meeting. If the return of paid-up capital is so
authorized, the Shareholders approving of such return at such meeting shall
determine when the paid-up capital shall be returned on the shares of the
Company, the amount of paid-up capital to be returned on each such share and
whether such paid-up capital should be returned to the holders of such shares in
the form of cash, a promissory note or other assets of the Company.
<PAGE>
6
The amount of the reduction in the paid-up capital of the shares shall be
recorded in the accounts of the Company.
28. To the intent that the operation of Section 12(l) of the Third
Schedule to the Act be restricted, it is hereby declared that any class of
shares or any series of shares affected by the matter in a manner different from
other shares of the same class shall not carry the right to vote separately as a
class or series upon any amendment to the Memorandum or Articles of this Company
of the kind referred to in clauses (a), (b) or (e) of subsection (2) of Section
2 of the Third Schedule to the Act.
CLASSES OF SHARES
29. Subject to the rights, if any, of the holders of shares of any
class or series of shares entitled to vote separately as a class or series
thereon, and subject to the provisions of these Articles, and without prejudice
to any special rights previously conferred on the holders of existing shares,
any share may be issued with such preferred, deferred or other special rights,
or such restrictions, whether in regard to dividends, voting, return of share
capital or otherwise, as the Company may from time to time by Special Resolution
determine. Any preference shares may with the sanction of a Special Resolution
of the Company be issued on the terms that they are, at the option of the
Company, liable to be redeemed or purchased by the Company.
BORROWING POWERS
30. The directors on behalf of the Company may from time to time in
their discretion:
(a) Raise or borrow money for the purposes of the Company
or any of them;
(b) Secure the repayment of moneys so raised or borrowed
in such manner and upon such terms and conditions in
all respects as they think fit, and in particular by
the execution and delivery of mortgages of the
Company's real or personal property, or by the issue
of bonds, debentures or debenture stock of the
Company secured by mortgage or otherwise or charged
upon all or any part of the property of the Company,
both present and future, including its uncalled
capital for the time being;
Provided that the power to execute mortgages of the
Company's real or personal property and the power to
issue bonds or debentures or debenture stock secured
by mortgage or otherwise shall not be exercised by
the directors except with the sanction of a Special
Resolution of the Company previously passed and
(where confirmation is necessary) confirmed in
general meeting;
(c) Sign or endorse bills, notes, acceptances, cheques,
contracts, and other evidence of or securities for
money borrowed or to be borrowed for the purposes
aforesaid; and
<PAGE>
7
(d) Pledge debentures as security for loans.
31. Bonds, debentures, debenture stock and other securities may be
made assignable, free from any equities between the Company and the person to
whom the same may be issued.
32. Any bonds, debentures, debenture stock, and other securities may
be issued at a discount, premium, or otherwise, and with any special privileges
as to redemption, surrender, drawings, allotment of shares, attending and voting
at general meetings of the Company, appointment of directors, and otherwise.
RECORD DATES
33. (1) For the purpose of determining
(a) shareholders entitled to receive payment of
a dividend, or
(b) who is a shareholder for any other purpose
except the right to receive notice of, or to
vote at, a meeting,
the Directors may fix in advance a date as the record date for the determination
of shareholders, but for the record date so fixed shall not precede by more than
fifty days the particular action to be taken.
(2) For the purpose of determining shareholders entitled
to receive notice of a meeting of shareholders, the
Directors may fix in advance a date as the record
date for the determination of shareholders, but the
record date so fixed shall not precede the date on
which the meeting is to be held by more than fifty
days or less than twenty-one days.
(3) If no record date is fixed pursuant to subsection (1)
or (2),
(a) the record date for the determination of shareholders
for any purpose, other than to establish a
shareholder's right to receive notice of, or to vote
at, a meeting, is the day on which the Directors pass
the resolution relating to the particular purpose;
and
(b) the record date for the determination of shareholders
entitled to receive notice of, or to vote at, a
meeting of shareholders is
(i) the day immediately preceding the day on
which the notice is given, or
(ii) if no notice is given, the day on which the
meeting is held.
<PAGE>
8
(4) Subject to subsection (5), where a record date is
fixed for a Company, notice thereof shall, not less
than seven days before the record date, be given
(a) by advertisement in a newspaper in general
circulation in the place where the head
office of the Company is situated and in
each place in Canada where the Company has a
transfer agent or where a transfer of
Company's shares may be recorded; and
(b) by written notice to each stock exchange, if
any, in Canada on which the shares of the
Company are listed for trading.
(5) Notice of a record date fixed for a company need not
be given where notice of the record date is waived in
writing by every holder of a share of the class or
series affected whose name is set out in the Register
at the close of business on the date the Directors
fix the record date.
MEETINGS
34. The first meeting of the Company shall be held within eighteen
months from the date of the registration of the Memorandum of Association of the
Company and at such place as the directors may determine.
35. Other general meetings shall be held once at least in every
calendar year, at such time and place as may be determined by the directors and
not more than fifteen months after the preceding general meeting.
36. The general meetings referred to in the next preceding Article
shall be called ordinary general meetings; and all other meetings of the Company
shall be called special general meetings.
37. The directors, whenever they think fit, may convene a special
general meeting and, on the requisition of members of the Company holding not
less than five percent of the shares of the Company carrying the right to vote
at the meeting sought to be held, the directors shall forthwith proceed to
convene a special general meeting of the Company to be held at such time and
place as may be determined by the directors.
38. The requisition must state the objects of the meeting required,
and must be signed by the members making the same and shall be deposited at the
Office, and may consist of several documents in like form each signed by one or
more of the requisitionists.
39. If the directors do not proceed to cause a meeting to be held,
within twenty-one days from the date of the requisition being so deposited, the
requisitionists, or any of them representing more than one-half of the total
voting rights of all of them, may themselves convene the meeting, but any
meeting so convened shall not be held after three months from the date of such
deposit.
<PAGE>
9
40. If at any such meeting a resolution requiring confirmation at
another meeting is passed, the directors shall forthwith convene a further
special general meeting for the purpose of considering such resolution; and if
thought fit, of confirming it as a Special Resolution; and if the directors do
not convene the meeting within seven days from the date of the passing of the
first resolution, the requisitionists, or any of them representing more than
one-half of the total voting rights of all of them, may themselves convene the
meeting.
41. Any meeting convened under the foregoing provisions by the
requisitionists shall be convened in the same manner as nearly as possible as
that in which meetings are to be convened by directors.
42. At least twenty-one days' notice of every general meeting
specifying the place, day and hour of the meeting, and, in the case of special
business, the general nature of such business, shall be sent to the members
entitled to be present at such meeting by notice sent by post or otherwise
served as hereinafter provided; and, with the consent in writing of all the
members entitled to vote at such meeting, a meeting may be convened by shorter
notice and in any manner they think fit, or if all the members are present at a
meeting, either in person or by proxy, notice of time, place and purpose of the
meeting may be waived.
43. Where it is proposed to pass a Special Resolution, the two
meetings may be convened by one and the same notice, and it shall be no
objection to such notice that it only convenes the second meeting contingently
upon the resolution being passed by the required majority at the first meeting.
44. The accidental omission to give any such notice to any of the
members or the nonreceipt of any such notice by any of the members shall not
invalidate any resolution passed at any such meeting.
PROCEEDINGS AT GENERAL MEETINGS
45. The business of an ordinary general meeting shall be to receive
and consider the financial statements of the Company, the reports of the
directors and of the auditors, if any, to elect directors in the place of those
retiring and to transact any other business which under these Articles ought to
be transacted at an ordinary general meeting.
46. (1) Two members (where there is more than one member) personally
present or represented by proxy and entitled to vote shall be a quorum for a
general meeting. A corporation which is a member of the Company and which has
duly appointed a representative under the provisions of the Act who is
personally present at the meeting, shall for the purposes of this Article be
considered as if personally present thereat.
(2) If within half an hour from the time appointed for the
meeting a quorum is not present, the meeting, if convened upon the requisition
of the members of the Company pursuant to Article 37, shall be dissolved; but in
any other case it shall stand adjourned, to the same day, in the next week, at
the same time, and place, and if at such adjourned meeting a quorum is not
present, those members entitled to vote as aforesaid who are present shall be a
quorum, and may transact the business for which the meeting was called.
<PAGE>
10
47. No business shall be transacted at any general meeting unless the
quorum requisite be present at the commencement of the business.
48. The Chairman of the Board shall be entitled to take the chair at
every general meeting, or if there be no Chairman of the Board, or if at any
meeting he shall not be present within fifteen minutes after the time appointed
for holding such meeting, the President, or failing him a Vice-President who is
a director, shall be entitled to take the chair and if none of the Chairman of
the Board nor the President, nor such a Vice-President, shall be present within
fifteen minutes after the time appointed for holding the meeting, the members
present entitled to vote at the meeting shall choose another director as
Chairman and if no director is present or if all the directors present decline
to take the chair, then the members present entitled to vote shall choose one of
their number to be Chairman.
49. Every question submitted to a meeting shall be decided, in the
first instance, by a show of hands, and in the case of an equality of votes, the
Chairman shall not, whether on a show of hands or on a poll, have a casting vote
in addition to the vote or votes to which he may be entitled as a member.
50. At any general meeting a resolution put to the meeting shall be
decided by a show of hands, unless a poll is (before or on the declaration of
the result of a show of hands) demanded by the Chairman or by a member, or by a
Proxyholder and, unless a poll is so demanded a declaration by the Chairman that
a resolution has been carried, or carried by a particular majority, or lost, or
not carried by a particular majority, and an entry to that effect in the book of
proceedings of the Company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour or against
such resolution. Subject to the Act and these Articles, a resolution shall be
carried if more than Fifty Percent (50%) of the votes are cast in favour of such
resolution by the members entitled to vote thereon.
51. If a poll is demanded as aforesaid, it shall be taken in such
manner, at such time and place as the Chairman of the meeting directs, and
either at once, or after an interval or adjournment or otherwise, and the result
of the poll shall be deemed to be the resolution of the meeting at which the
poll was demanded. The demand of a poll may be withdrawn. In case of any dispute
as to the admission or rejection of a vote, the Chairman shall determine the
same, and such determination made in good faith, shall be final and conclusive.
52. The Chairman of a general meeting may, with the consent of the
meeting, adjourn the same from time to time, and from place to place, but no
business shall be transacted at any adjourned meeting other than the business
left unfinished at the meeting from which the adjournment took place.
53. Any poll demanded on the election of a Chairman of a meeting or
any question of adjournment shall be taken at the meeting, and without
adjournment.
54. The demand of a poll shall not prevent the continuance of a
meeting for the transaction of any business other than the question on which a
poll has been demanded.
<PAGE>
11
VOTES OF MEMBERS
55. (1) Subject to the Act, the provisions applicable to any shares
issued under conditions limiting or excluding the right of holders thereof to
vote at general meetings and these Articles, on a show of hands every member
present in person and every Proxyholder, subject to Section 85F(2) of the Act,
shall have one vote, and upon a poll every member present in person or by proxy
shall have one vote for every share held by him.
(2) Where a corporation being a member is represented by a
Proxyholder who is not a member or by a representative duly authorized under the
Act, such Proxyholder or representative shall be entitled to vote for such
corporation either on a show of hands or on a poll.
56. Where there are joint registered holders of any share, any one of
such persons may vote at any meeting either personally or by proxy, in respect
of such share, as if he were solely entitled thereto; and if more than one of
such joint holders is present at any meeting, personally or by proxy, that one
of the said persons so present, whose name stands first on the Register in
respect of such share, shall alone be entitled to vote in respect thereof.
57. Votes may be given either personally or by proxy or in the case of
a corporation by a representative duly authorized under the Act.
58. (1) A proxy shall be in writing under the hand of the appointer or
of his attorney duly authorized in writing, or, if such appointer is a
corporation, under its common seal or the hand of its attorney or representative
authorized in the manner referred to in Section 86(l)(a) of the Act.
(2) Holders of share warrants shall not be entitled to vote by
proxy in respect of the shares included in such warrants unless otherwise
expressed in such warrants.
59. A member of unsound mind, in respect of whom an order has been
made by any Court of competent jurisdiction, may vote by his guardian or other
person in the nature of a guardian appointed by that Court and any such guardian
or other person may vote by proxy.
60. A proxy and the power of attorney or other authority, if any,
under which it is signed or a notarially certified copy of that power or
authority shall be deposited with the Chairman of the meeting before or at the
meeting or adjourned meeting at which it is to be voted. A proxy shall cease to
be valid one year after its date.
61. A vote given in accordance with the terms of a proxy shall be
valid notwithstanding the previous death of the principal, or revocation of the
proxy, or transfer of the share in respect of which the vote is given, provided
no intimation in writing of the death, revocation, or transfer shall have been
received before the meeting, at the Office of the Company or by the Chairman of
the meeting before the vote is given.
62. Every form of proxy, whether for a specific meeting or otherwise
shall, as nearly as circumstances will admit, be in the form or to the effect
following; or in such other form complying with the regulations made pursuant to
the Act as the directors may from time to time determine:
<PAGE>
12
I ....................... of .............. in the County of
................ being a member of UPR CAPITAL COMPANY, hereby appoint
............................... of (or failing him ..................
of ............... or failing him .................... of
.......................... ) as my proxy to attend and vote for me and
on my behalf at the ordinary general (or special general as the case
may be) meeting of the Company, to be held on the ..................
day of ................................ and at any adjournment thereof,
or at any meeting of the Company which may be held within
.......................... months
from the date thereof.
[if the proxy solicited by or on behalf of management of the
Company, a statement to that effect]
As witness my hand this ................... day of ................,
19...
Witness ............................ Shareholder.......................
63. Any resolution passed by the directors, notice whereof shall be
given to the members in the manner in which notices are hereinafter directed to
be given and which shall, within one month after it has been passed, be ratified
and confirmed in writing by members entitled on a poll to three-fifths of the
votes, shall be as valid and effectual as a resolution of a general meeting, but
this Article shall not apply to a resolution for winding up the Company, to a
resolution passed in respect of any matter which by statute or these presents
ought to be dealt with by Special Resolution, or any action which, by virtue of
subsection 12(l) of the Third Schedule to the Act, requires approval in
accordance with that subsection.
64. (1) A resolution, including a Special Resolution, in writing and
signed by every Shareholder who would be entitled to vote on the resolution at a
meeting is as valid as if it were passed by such Shareholders at a meeting and
satisfied all the requirements of the Act respecting meetings of the
Shareholders.
(2) A copy of every resolution referred to in subsection (1)
of this Article shall be kept with the minutes of proceedings of Shareholders.
DIRECTORS
65. The number of directors shall be a minimum of One (l) and a
maximum of Ten (10) natural persons.
66. The first directors shall be appointed by the subscribers hereto
or the majority of them, by an instrument in writing.
67. The directors shall have power at any time and from time to time
to appoint any other person as a director either to fill a casual vacancy or as
an addition but the total number of directors shall not at any time exceed the
maximum number, fixed as above, and no such appointment shall be effective
unless two-thirds of the directors concur therein.
68. A director is not required to hold a share in the Company to
qualify as a director.
69. The continuing directors may act notwithstanding any vacancy in
their body; but if the number fall below the minimum above fixed the directors
shall not, except in
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13
emergencies or for the purpose of filling up vacancies, act so long as the
number is below the minimum.
70. The directors shall be paid out of the funds of the Company by way
of remuneration for their service such sums, if any, as the Company in general
meeting may determine and such remuneration shall be divided among them in such
proportions and manner as the directors may determine; the directors may also be
paid their reasonable travelling and hotel and other expenses incurred in
consequence of their attendance at meetings of the Board and otherwise in the
execution of their duties as directors.
71. A director may, in conjunction with the office of director, and on
such terms as to remuneration and otherwise as the directors arrange or
determine, hold any other office or place of profit under the Company or under
any company in which the Company shall be a shareholder or otherwise interested
or under any other company.
72. The office of a director shall ipso facto be vacated:
(a) if he becomes bankrupt or makes an authorized
assignment or suspends payment, or compounds with his
creditors;
(b) if he is found to be of unsound mind by a Court of
competent jurisdiction;
(c) if by notice in writing to the Company he resigns his
office; or
(d) if he is removed by resolution of the Company as
provided in Article 77 hereof.
73. No director shall be disqualified by his office from contracting
with the Company either as vendor, purchaser, or otherwise, nor shall any such
contract, or any contract or arrangement entered into or proposed to be entered
into by or on behalf of the Company in which any director shall be in any way
interested, either directly or indirectly, be voided, nor shall any director so
contracting or being so interested be liable to account to the Company for any
profit realized by any such contract or arrangement by reason only of such
director holding that office or of the fiduciary relations thereby established;
but it is declared that the nature of his interest must be declared by him in
the manner required by the Act. No director shall as a director vote in respect
of any contract or arrangement in which he is so interested as aforesaid; and if
he does so vote his vote shall not be counted, but this prohibition may at any
time or times be suspended or relaxed to any extent by a general meeting and
such prohibition shall not apply to any contract by or on behalf of the Company
to give to the directors or any of them any security for advances or by way of
indemnity or to the agreement or agreements referred to in Article 3 of these
Articles or to any modification of such agreement or agreements or any agreement
or agreements substituted therefor or any matter arising thereat.
ELECTION OF DIRECTORS
74. At every ordinary general meeting, all the directors shall retire
from office, but shall hold office until the dissolution of the meeting at which
their successors are elected. The Company shall at such meeting fill up the
vacant offices by electing a like manner of
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14
persons to be directors, unless it is determined at such meeting to reduce or
increase the number of directors. A retiring director shall be eligible for
re-election.
75. If at any ordinary general meeting at which an election of
directors ought to take place, no such election takes place, or if no ordinary
general meeting is held in any year or period of years, the retiring directors
shall continue in office until their successors are elected and a general
meeting for that purpose may on notice be held at any time.
76. The Company in general meeting may from time to time increase or
reduce the number of directors, and may determine or alter their qualifications.
77. The Company may, by Special Resolution, remove any director before
the expiration of his period of office and appoint another person who may be
qualified or become qualified in his stead; and the person so appointed shall
hold office during such time only as the director in whose place he is appointed
would have held the same if he had not been removed.
THE PRESIDENT AND VICE-PRESIDENT
78. The directors shall appoint the President of the Company and may
determine the period for which he is to hold office. The President shall have
general supervision of the business of the Company and shall perform such duties
as may be assigned to him by the Board from time to time.
79. The directors may also appoint one or more Vice-Presidents, and
may determine the period for which each of them are to hold office. A
Vice-President shall, at the request of the Board and subject to its directions,
perform the duties of the President during the absence, illness or incapacity of
the President, or during such period as the President may request him so to do.
80. The directors may elect or appoint such other officers of the
Company, having such powers and duties as they think fit. If the directors so
decide, the same person may hold more than one of the offices provided for in
these Articles.
CHAIRMAN OF THE BOARD
81. The directors may elect one of their number to be Chairman of the
Board and may determine the period during which he is to hold office. He shall
perform such duties and receive such special remuneration as the Board may from
time to time provide.
PROCEEDINGS OF DIRECTORS
82. The directors may meet together for the dispatch of business,
adjourn, and otherwise regulate their meetings and proceedings, as they think
fit. The quorum necessary for the transaction of business shall be a majority of
the directors provided that if a quorum is not present at any meeting of
directors, such meeting shall be adjourned to another date determined by the
Chairman of the Board; at such adjourned meeting the quorum will be those
directors present.
<PAGE>
15
83. Meetings of directors may be held either within or without the
Province of Nova Scotia and the directors may from time to time make
arrangements relating to the time and place of holding directors' meetings. In
any event:
(a) Meetings of directors shall be regularly scheduled at
the end of the calendar year of the Company for the
immediately following calendar year of the Company
and notice of all of those meetings shall be
delivered or mailed or telegraphed, telephoned or
telefaxed to each director at least 48 hours before
the meeting is to take place;
(b) In the case of a meeting of directors, other than a
meeting described in Paragraph (a) immediately above
and an adjourned meeting, notice of every such
meeting shall be delivered or mailed or telegraphed,
telephoned or telefaxed to each director at least
five (5) business days before the meeting is to take
place;
(c) In the case of a meeting of directors that has been
adjourned pursuant to Article 82, notice of every
such adjourned meeting shall be delivered or mailed
or telegraphed, telephoned or telefaxed to each
director at least seventy-two (72) hours before the
meeting is to take place; and
(d) A meeting of directors may be held without formal
notice if all the directors are present and waive
notice, or if those absent have signified their
assent to such meeting or their consent to the
business transacted thereat.
84. A director may participate in a meeting of directors or of a
committee of directors by means of such telephone or other communications
facilities as permit all persons participating in the meeting to hear each
other, and a director participating in such a meeting by such means is deemed to
be present at that meeting.
85. The President or any director may at any time, and the Secretary,
upon the request of the President or a director shall, convene a meeting of the
directors.
86. Questions arising at any meeting of directors shall be decided
by a majority of votes, and in case of an equality of votes the Chairman shall
not have a second or casting vote.
87. The Chairman of the Board shall preside at the meeting of the
directors. If no Chairman of the Board is elected, or if at any meeting of
directors he is not present within five minutes after the time appointed for
holding the same, the President shall preside, and if the President is not
present at the time appointed for holding the meeting, a Vice-President who is a
director shall preside and, if neither the President nor such a Vice-President
is present at any meeting within the time aforesaid, the directors present shall
choose some one of their number to be Chairman of such meeting.
88. A meeting of the directors at which a quorum is present shall be
competent to exercise all or any of the authorities, powers and discretion by or
under the statutes in that
<PAGE>
16
behalf or of the regulations of the Company vested in or exercisable by the
directors generally.
89. Subject to any other Article in these Articles, the directors may
delegate any of their powers to committees, consisting of such number of members
of their body as they think fit. Any committee so formed shall in the exercise
of the powers so delegated conform to any regulations that may be imposed on
them by the directors.
90. The meetings and proceedings of any committee consisting of two or
more members shall be governed by the provisions contained in these Articles for
regulating the meetings and proceedings of the directors so far as the same are
applicable thereto and are not superseded by any regulations made by the
directors under the next preceding Article.
91. All acts done at any meeting of the directors or of a committee of
directors, or by any person acting as a director shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment of
such directors or persons acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a director.
92. (1) A resolution in writing and signed by every director who
would be entitled to vote on the resolution at a meeting is as valid as if it
were passed by such directors at a meeting.
(2) A copy of every resolution referred to in subsection (1)
of this Article shall be kept with the minutes of proceedings of the directors
or committee thereof, as the case may be.
93. If any one or more of the directors are called upon to perform
extra services or to make any special exertions in going or residing abroad or
otherwise for any of the purposes of the Company, or the business thereof, the
Company may remunerate the director or directors so doing, either by a fixed sum
or by a percentage of profits or otherwise, as may be determined by the
directors, and such remuneration may be either in addition to or in substitution
for his share in the remuneration above provided.
94. If a resolution authorizes the entering into of an agreement or
the performance of any act, that resolution shall be deemed to authorize the
execution of such further documents and the doing of such further things as may
be necessary or desirable in connection therewith by the persons authorized to
act by the resolution.
REGISTERS
95. The directors shall cause a proper Register to be kept in
accordance with the provisions of the Act.
96. The directors may cause to be kept in any place outside of Nova
Scotia a branch register of members in accordance with the provisions of the
Act.
97. The directors shall also cause to be kept a proper register,
containing the names and addresses and occupations of its directors or managers
in accordance with the provisions of the Act.
<PAGE>
17
98. The directors shall cause a proper register of the holders of
debentures to be kept at the Office in accordance with the provisions of the
Act.
99. The directors may cause to be kept in any place outside of Nova
Scotia a branch register of the holders of debentures in accordance with the
provisions of the Act.
MINUTES
100. The directors shall cause minutes to be duly entered in books for
that purpose,
(1) Of all appointments of officers;
(2) Of the names of the directors present at each meeting
of the directors and of any committees of directors;
(3) Of all orders made by the directors and committees of
directors;
(4) Of all resolutions and proceedings of meetings of the
Shareholders and of meetings of the directors;
Any such minutes of any meeting of the directors or of any committee,
or of the Company if purporting to be signed by the Chairman of such meeting or
by the Chairman of the next succeeding meeting, shall be receivable as prima
facie evidence of the matters stated in such minutes.
POWERS OF DIRECTORS
101. The management of the business of the Company shall be vested in
the directors, who, in addition to the powers and authorities by these Articles
or otherwise expressly conferred upon them, may exercise all such powers and do
all such acts and things as may be exercised or done by the Company and are not
hereby or by statute expressly directed or required to be exercised or done by
the Company in general meeting, but subject nevertheless to the provisions of
the statutes in that behalf and of these Articles (including, without
limitation, the requirement for a Special Resolution of the Company in
connection with the exercise by the directors of any of the powers referred to
in Article 30(b)) and to any regulations from time to time made by the Company
in general meeting; provided that no regulation so made shall invalidate any
prior act of the directors, which would have been valid if such regulation had
not been made.
102. Without restricting the generality of the terms of the last
preceding Article and without prejudice to the general powers conferred thereby,
and the other powers conferred or restrictions imposed by these Articles on the
powers of the directors, it is hereby expressly declared that the directors
shall have the following powers, that is to say power from time to time:
(1) To take such steps as they think fit to carry into
effect any agreement or contract made by or on behalf
of the Company;
<PAGE>
18
(2) To pay the costs, charges and expenses, preliminary
and incidental to the promotion, formation,
establishment, and registration of the Company;
(3) To purchase, or otherwise acquire, for the Company
any property, rights or privileges which the Company
is authorized to acquire, and at such price and
generally on such terms and conditions as they think
fit;
(4) At their discretion, to pay for any property, rights,
or privileges acquired by or services rendered to the
Company, either wholly or partially in cash or in
shares, bonds, debentures or other securities of the
Company, and any such shares may be issued either as
fully paid up, or with such amount credited as paid
up thereon as may be agreed upon; and any such bonds,
debentures, or other securities may be either
specifically charged upon all or any part of the
property of the Company, or not so charged;
(5) To secure the fulfilment of any contracts or
engagements entered into by the Company, by mortgage
or charge of all or any of the property of the
Company and its unpaid capital for the time being, or
in such other manner as they may think fit;
(6) To appoint, and at their discretion remove or
suspend, such experts, managers, secretaries,
treasurers, officers, clerks, agents and servants for
permanent, temporary or special services, as they
from time to time think fit, and to determine their
powers and duties, and fix their salaries or
emoluments, and to require security in such instances
and to such amounts as they think fit;
(7) To accept from any member insofar as the law permits,
and on such terms and conditions as shall be agreed
upon, a surrender of his shares or any part thereof;
provided that the Company forthwith cancel such
surrendered shares or any part thereof, as the case
may be;
(8) To appoint any person or persons (whether
incorporated or not) to accept and hold in trust for
the Company any property belonging to the Company, or
in which it is interested, and for any other
purposes, and to execute and do all such deeds and
things as may be requisite in relation to any such
trust, and to provide for the remuneration of any
such trustee or trustees;
(9) To institute, conduct, defend, compound, or abandon
any legal proceedings by or against the Company, or
its officers, or otherwise concerning the affairs of
the Company, and also to compound and allow time for
payment or satisfaction of any debts due, and of any
claims or demands by or against the Company;
(10) To refer any claims or demands by or against the
Company to arbitration, and observe and perform the
awards;
<PAGE>
19
(11) To make and give receipts, releases and other
discharges for money payable to the Company and for
claims and demands of the Company;
(12) To determine who shall be entitled to exercise the
borrowing powers of the Company and sign on the
Company's behalf bonds, debentures or other
securities, bills, notes, receipts, acceptances,
assignments, transfers, hypothecation, pledges,
endorsements, cheques, drafts, releases, contracts,
agreements and all other instruments and documents;
(13) To provide for the management of the affairs of the
Company abroad in such manner as they think fit, and
in particular to appoint any persons to be the
attorneys or agents of the Company with such powers
(including power to sub-delegate) and upon such terms
as may be thought fit;
(14) To invest and deal with any of the moneys of the
Company not immediately required for the purposes
thereof upon such securities and in such manner as
they think fit, and from time to time to vary or
realize such investments;
(15) To execute in the name and on behalf of the Company,
in favour of any director or any other person who may
incur or be about to incur any personal liability for
the benefit of the Company, such mortgages of the
Company's property, present and future, as they think
fit, and any such mortgages may contain a power of
sale, and such other powers, covenants and provisions
as shall be agreed on;
(16) To set aside out of the profits of the Company before
declaring any dividend, such sums as they think
proper as a reserve fund to meet contingencies, or to
provide for dividends, or for depreciation, or for
repairing, improving and maintaining any of the
property of the Company and for such other purposes
as the directors shall in their absolute discretion
think conducive to the interests of the Company; and
to invest the several sums so set aside upon such
investments other than shares of the Company as they
may think fit, and from time to time to deal with and
vary such investments, and to dispose of all or any
part thereof for the benefit of the Company, and to
divide the reserve fund into such special funds as
they think fit, with full power to employ the assets
constituting the reserve fund in the business of the
Company; and that without being bound to keep the
same separate from the other assets;
(17) From time to time to make, vary and repeal by-laws
for the regulation of the business of the Company, or
of its officers and servants, or the members of the
Company, or any section or class thereof;
(18) To enter into all such negotiations and contracts,
and rescind and vary all such contracts, and execute
and do all such acts, deeds, and
<PAGE>
20
things in the name and on behalf of the Company as
they may consider expedient for or in relation to any
of the matters aforesaid, or otherwise for the
purposes of the Company; and
(19) To provide for the management of the affairs of the
Company in such manner as they shall think fit.
SOLICITORS
103. The Company may employ or retain a solicitor or solicitors, and
such solicitor(s) may, at the request of the Board, or on instructions of the
Chairman of the Board, or the President, attend meetings of the directors or
Shareholders, whether or not he, himself, is a member or director of the
Company. If a solicitor is also a director, he may nevertheless charge for
services rendered to the Company as a solicitor.
SECRETARY AND TREASURER
104. There shall be a Secretary of the Company, who shall keep the
minutes of Shareholders' and directors' meetings and shall perform such other
duties as may be assigned to him by the Board. The Board may also appoint a
Treasurer of the Company to carry out such duties as the Board may assign.
105. The Secretary and Treasurer of the Company shall be appointed by
the directors. If the directors think fit, the same person may hold both
offices.
106. If the directors think fit, the same person may hold the offices
of President and Secretary.
107. The directors may appoint a temporary substitute for the
Secretary, who shall, for the purposes of these Articles, be deemed to be the
Secretary.
THE SEAL
108. The directors shall procure a seal for the Company and shall
provide for its safe custody.
DIVIDENDS
109. The profits of the Company, subject to the provisions of the
Memorandum of Association, and of these presents and to the rights of persons,
if any, entitled to shares with special rights as to dividends, may be divided
among the Shareholders in accordance with the terms of the shares held by them.
110. The directors may from time to time declare such dividend upon the
shares of the Company as they may deem proper according to the rights of the
members and the respective classes thereof, and may determine the date upon
which the same shall be payable, and provide that any such dividend shall be
payable to the persons registered as the
<PAGE>
21
holders of the shares in respect of which the same is declared at the close of
business upon such date as the directors may specify, and no transfer of such
shares made or registered, after the date so specified, shall pass any right to
the dividend so declared.
111. No dividend shall be payable except out of the profits of the
Company, and no dividend shall carry interest as against the Company.
112. The declaration of the directors as to the amount of the net
profits of the Company shall be conclusive.
113. The directors may from time to time pay to the members such
interim dividends as in their judgment the position of the Company justifies.
114. The directors may retain any dividends on which the Company has a
lien, and may apply the same in or towards satisfaction of the debts,
liabilities or engagements in respect of which the lien exists.
115. The directors, on declaring a dividend, may resolve that such
dividend be paid wholly or in part by the distribution of specific assets, and
in particular of paid up shares, debentures, bonds or debenture stock of the
Company or paid up shares, debentures, bonds or debenture stock of any other
company or in any one or more of such ways.
116. The directors may resolve that any moneys, investments, or other
assets forming part of the undivided profits of the Company in the hands of the
Company and available for dividend, or representing premiums received on the
issue of shares and standing to the credit of the share premium account, be
capitalized and distributed amongst such of the Shareholders as would be
entitled to receive the same if distributed by way of dividend and in the same
proportions on the footing that they become entitled thereto as capital and that
all or any part of such capitalized fund be applied on behalf of such
Shareholders in paying up in full either at par or at such premium as the
resolution may provide, any unissued shares or debentures or debenture stock of
the Company which shall be distributed accordingly or in or towards payment of
the uncalled liability on any issued shares or debentures or debenture stock,
and that such distribution or payment shall be accepted by such Shareholders in
full satisfaction of their interest in the said capitalized sum.
117. For the purposes of giving effect to any resolution under the two
last preceding Articles, the directors may settle any difficulty which may arise
in regard to the distribution as they think expedient, and in particular may
issue fractional certificates, and may fix the value for distribution of any
specific assets, and may determine that cash payment shall be made to any
members upon the footing of the value so fixed, or that fractions of less value
than $5.00 may be disregarded in order to adjust the rights of all parties, and
may vest any such cash or specific assets in trustees upon such trusts for the
persons entitled to the dividend or capitalized fund as may seem expedient to
the directors. Where requisite, a proper memorandum shall be filed in accordance
with the Act.
118. A transfer of shares shall not pass the right to any dividend
declared thereon after such transfer and before the registration of the
transfer.
119. Any one of several persons who is registered as the joint holder
of any share may give effectual receipts for all dividends and payments on
account of dividends in respect of such share.
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22
120. Unless otherwise determined by the directors, any dividend may be
paid by a cheque or warrant delivered to or sent through the post to the
registered address of the member entitled, or, in the case of joint holders, to
the registered address of that one whose name stands first on the Register, in
respect of the joint holding; and every cheque or warrant so delivered or sent
shall be made payable to the order of the person to whom it is delivered or
sent.
121. Notice of the declaration of any dividend, whether interim or
otherwise, shall be given to the holders of registered shares in the manner
hereinafter provided.
122. All dividends unclaimed for one year after having been declared
may be invested or otherwise made use of by the directors for the benefit of the
Company until claimed.
ACCOUNTS
123. The directors shall cause proper books of account to be kept of
the sums of money received and expended by the Company, and the matters in
respect of which such receipts and expenditures take place, and of all sales and
purchases of goods by the Company, and of the assets and credits and liabilities
of the Company.
124. The books of account shall be kept at the Office of the Company or
such other place as the directors think fit.
125. The directors shall from time to time determine whether, and to
what extent, the accounts and books of the Company, or any of them, shall be
open to the inspection of the members, and no member shall have any right of
inspecting any account or book or document of the Company except as conferred by
statute, or authorized by the directors, or by a resolution of the Company in
general meeting.
126. At the ordinary general meeting in every year, the directors shall
lay before the Company the financial statements required by the Act, the report
of the auditor, if any, to the members and, if the Company is a Reporting
Issuer, the report of the directors.
127. The financial statements shall be approved by the Board and such
approval shall be evidenced by the signatures of two directors to the balance
sheet or by the sole Director where there is only one.
128. The directors not less than seven days before the date of the
ordinary general meeting shall send copies of the financial statements and the
report of the auditor, if any, thereon to all members holding voting securities
or otherwise entitled to receive notice of the general meeting.
AUDIT
129. Unless in respect of a financial year the Company is exempt from
the requirements of the Act regarding the appointment and duties of an auditor,
an auditor shall
<PAGE>
23
be appointed in accordance with the Act. The auditor's duties will be regulated
in accordance with the Act.
130. Every account of the directors, when audited and approved by a
general meeting, shall be conclusive, except as regards an error discovered
therein within three months next after the approval thereof. Whenever any such
error is discovered within the period, the account shall forthwith be corrected,
and thenceforth shall be conclusive.
NOTICES
131. A notice, statement or report may be given or delivered by the
Company to any Shareholder either by delivery to him personally or by sending it
by registered mail or facsimile to him to his last known address (if sent by
mail) or facsimile number (if sent by facsimile) indicated in the records of the
Company. Where a notice, statement or report is sent by mail or by facsimile,
service or delivery of the notice, statement or report shall be deemed to be
effected if properly addressed and mailed (if sent by mail) or properly
transmitted and telefaxed (if sent by facsimile) and to have been given five
days (excluding Saturdays and Sundays) following the date of mailing (if sent by
mail) or one day (excluding Saturdays and Sundays) following the date the
facsimile was telefaxed (if sent by facsimile). A certificate signed by the
Secretary or other officer of the Company that the letter, envelope or facsimile
containing the notice, statement or report was so addressed and mailed shall be
conclusive evidence thereof.
132. A notice, statement or report may be given or delivered by the
Company to the joint holders of a share by giving the notice to the joint holder
first named in the Register in respect of the share.
133. Notice of every general meeting or meeting of Shareholders holding
a class of shares shall be given in a manner hereinbefore authorized to every
Shareholder holding, at the time of the issue of the notice or the date fixed
for determining the Shareholders entitled to such notice, whichever is the
earlier, shares which confer the right to notice of and to attend or vote at any
such meeting. No other person except the auditor of the Company and the
directors of the Company shall be entitled to receive notices of any such
meeting.
INDEMNITY
134. Every director, manager, Secretary, Treasurer, and other officer
or servant of the Company shall be indemnified by the Company against, and it
shall be the duty of the directors out of the funds of the Company to pay, all
costs, losses and expenses which any director, manager, Secretary, Treasurer or
other officer or servant may incur or become liable to by reason of any contract
entered into, or act or thing done by him as such officer or servant, or in any
way in the discharge of his duties, including travelling expenses, and the
amount for which such indemnity is proved shall immediately attach as a lien on
the property of the Company and have priority as against the members over all
other claims.
135. No director or officer of the Company, in his capacity as a
director or officer, respectively, shall be liable for acts, receipts, neglects
or defaults of any other director or officer, or for joining in any receipt or
other act for conformity, or for any loss or expense
<PAGE>
24
happening to the Company through the insufficiency or deficiency of title to any
property acquired by order of the directors for or on behalf of the Company or
through the insufficiency or deficiency of any security in or upon which any of
the moneys of the Company shall be invested, or for any loss or damage arising
from the bankruptcy, insolvency or tortious act of any person with whom any
money, securities or effects shall be deposited, or for any loss occasioned by
error of judgment or oversight on his part, or for any other loss, damage or
misfortune whatever which shall happen in the execution of the duties of his
office or in relation thereto, unless the same happen through his own
dishonesty.
REMINDERS
136. The directors shall comply with all the provisions of the Act,
including:
(1) Keep an up to date Register (Section 42).
(2) Keep a register of directors and managers and send to
the Registrar a copy thereof and notify him of any
change among the directors or managers of the Company
(Section 98).
(3) Keep an up to date register of the holders of
debentures (Section 111).
(4) Send to the Registrar notice of consolidation of
share capital, conversion of shares into stock and
reconversion of stock into shares (Section 53).
(5) Send notice to the Registrar of any redemption or
purchase of preference shares (Section 50).
(6) Send notice to the Registrar of any increase in the
capital of the Company (Section 55).
(7) Call a general meeting every year within the proper
time (Section 83).
(8) Send to the Registrar printed copies of Special
Resolutions (Section 88).
(9) File with the Registrar notice of situation of its
Office or of any change thereof (Section 79).
(10) Keep at the Office proper minutes of all general
meetings and directors' meetings in books kept for
this purpose (Section 89).
(11) File a contract with the Registrar when shares are
issued for a consideration other than cash (Section
109).
<PAGE>
25
137. The directors shall also:
(a) Obtain a certificate under the Corporations
Registration Act on commencing business; and
(b) File notice of Recognized Agent with the Registrar
under provisions of the Corporations Registration
Act.
PRIVATE COMPANY
138. To the end that the Company may qualify as a private company as
that term is defined by the Securities Act (Nova Scotia),
(1) In this Article, "prescribed securities" means the
securities prescribed from time to time by the Nova
Scotia Securities Commission for the purpose of the
definition of private company under the Securities
Act (Nova Scotia);
(2) No transfer of prescribed securities of the Company,
other than as permitted in Article 19, shall be
effective;
(3) The number of holders of prescribed securities of the
Company, exclusive of persons who own a prescribed
security and who are in its employment or the
employment of an affiliate and exclusive of persons
who, having been formerly in the employment of the
Company or an affiliate, were while in that
employment the owners of, and have continued after
termination of that employment to own, at least one
prescribed security of the Company, is limited to not
more than fifty, two or more persons or companies who
are the joint registered owners of one or more
prescribed securities of the Company being counted as
one holder; and
(4) The Company shall not distribute any of its
prescribed securities or securities convertible into
or exchangeable for prescribed securities to the
public.
SALE OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS
139. The Company shall not sell, lease or exchange all or substantially
all of its property, other than in the ordinary course of its business, unless
approved by a Special Resolution of the Company in general meeting.
<PAGE>
26
NAMES, ADDRESSES AND OCCUPATIONS OF SUBSCRIBERS
- --------------------------------------------------------------------------------
Dated the 23rd day of March, 1998.
2435239 Nova Scotia Limited
Per: Mary M. Rowarth
Assistant Secretary
1601 Lower Water Street
P.O. Box 730
Halifax, Nova Scotia
B3J2V1
a Body Corporate
Witness to the above signatures.
/s/ Valerie Vaughan MacKenzie
- -----------------------------
1601 Lower Water Street
No. Halifax, NS. B3J2V1
-----------------------
Occupation: Legal Researcher/Analyst
------------------------
N. B. - Each subscriber must write his full name, his full post office address,
and his occupation, all in his own handwriting.
<PAGE>
27
PROVINCE OF NOVA SCOTIA )
COUNTY OF HALIFAX SS )
IN THE MATTER of the incorporation
of
UPR CAPITAL COMPANY
- and -
IN THE MATTER of the Companies Act (Nova Scotia)
- and -
IN THE MATTER of the Evidence Act (Nova Scotia)
I, MARCIA BRENNAN, of 1601 Lower Water Street, Halifax, in the
County of Halifax, Province of Nova Scotia, Barrister, do hereby declare as
follows:
1. I have been engaged in the formation of UPR CAPITAL COMPANY
about to be incorporated under the Companies Act (Nova Scotia).
2. ALL the requirements of the Companies Act (Nova Scotia) in
respect of registration and of matters precedent and incidental thereto have
been duly complied with.
AND I make this solemn declaration conscientiously believing
the same to be true and knowing that it is of the same force and effect as if
made under oath and by virtue of the Evidence Act.
DECLARED by the above-named )
Declarant, before me, at Halifax, in the )
Halifax Regional Municipality, Province )
of Nova Scotia, this 23rd day of )
March, A.D., 1998. )
)
)
)
/s/ Valerie Vaughan MacKenzie ) /s/ Marcia Brennan
------------------------------ ) -------------------
A Barrister of the Supreme ) MARCIA BRENNAN
Court of Nova Scotia )
<PAGE>
CORPORATE ACCESS NUMBER: 207859406
ALBERTA
BUSINESS CORPORATIONS ACT
CERTIFICATE
OF
CONTINUANCE
UNION PACIFIC RESOURCES INC.
CONTINUED FROM CANADA TO ALBERTA ON 1998/05/21.
[SEAL OF THE REGISTRAR OF CORPORATIONS]
<PAGE>
ARTICLES OF CONTINUANCE
FOR
UNION PACIFIC RESOURCES INC.
CLASSES OF SHARES: SEE ATTACHED SCHEDULE OF SHARE CAPITAL
NUMBER OF DIRECTORS:
MAXIMUM NUMBER OF DIRECTORS: 7
MINIMUM NUMBER OF DIRECTORS: 1
RESTRICTIONS ON BUSINESS TO: NONE
RESTRICTIONS ON BUSINESS FROM: NONE
RESTRICTIONS ON SHARE SEE ATTACHED SCHEDULE OF RESTRICITONS ON
TRANSFERS: SHARE TRANSFERS
OTHER RULES OR PROVISION: SEE ATTACHED SCHEDULE OF OTHER PROVISIONS
REGISTRATION AUTHORIZED BY: J.G. SMELTZER
SOLICITOR
<PAGE>
- --------------------------------------------------------------------------------
BUSINESS CORPORATIONS ACT
(SECTIONS 181, 261 AND 262 FORM 11
ALBERTA ARTICLES OF CONTINUANCE
- --------------------------------------------------------------------------------
1. NAME OF THE CORPORATION: 2. CORPORATE ACCESS NO.
Union Pacific Resources Inc.
- --------------------------------------------------------------------------------
3. THE CLASSES AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS
AUTHORIZED TO ISSUE
The attached Schedule A is incorporated into and forms part of this form.
- --------------------------------------------------------------------------------
4. RESTRICTIONS IF ANY ON SHARE TRANSFERS:
The right to transfer shares of the Corporation is restricted in that no
shareholder shall be entitled to transfer any share or shares in the capital
of the Corporation to any person who is not a shareholder of the Corporation
unless the transfer has been approved by the board of directors of the
Corporation.
----------------------------------------------------------------------------
5. NUMBER OR MINIMUM AND MAXIMUM NUMBER, OF DIRECTORS THAT THE CORPORATION MAY
HAVE:
Not less than one (1) director and not more than seven (7) directors
- --------------------------------------------------------------------------------
6. RESTRICTION IF ANY ON BUSINESS THE CORPORATION MAY CARRY ON.
None.
- --------------------------------------------------------------------------------
7. IF CHANGE OF NAME EFFECTED, PREVIOUS NAME.
N/A.
- --------------------------------------------------------------------------------
8. DETAILS OF INCORPORATION.
Formed by Amalgamation April 17, 1998
- --------------------------------------------------------------------------------
9. OTHER PROVISIONS IF ANY.
The attached Schedule B is incorporated into and forms part of this form.
- --------------------------------------------------------------------------------
DATE SIGNATURE TITLE
May 12, 1998 Joseph A. LaSala, Jr. Vice President
- --------------------------------------------------------------------------------
FILED
07/25/94
[STAMP-"REGISTERED ON THE ALBERTA
REGISTRIES CORES SYSTEM MAY 27 1998]
<PAGE>
SCHEDULE A
UNION PACIFIC RESOURCES INC.
The Corporation is authorized to issue:
(a) One class of shares, to be designated as "Common Shares", in an
unlimited number; and
(b) One class of shares, to be designated as "First Preferred Shares",
issuable in series, in an unlimited number;
such shares having attached thereto the following rights, privileges,
restrictions and conditions:
A. Common Shares
The Common Shares shall have attached thereto the following rights, privileges,
restrictions and conditions:
(i) the right to one vote at all meetings of shareholders of the
Corporation, except meetings at which only holders of a
specified class of shares are entitled to vote;
(ii) subject to the prior rights and privileges attaching to any
other class of shares of the Corporation, the right to receive
any dividend declared by the Corporation; and
(iii) subject to the prior rights and privileges attaching to any
other class of shares of the Corporation, the right to receive
the remaining property and assets of the Corporation upon
dissolution.
B. First Preferred Shares
The First Preferred Shares shall have attached thereto the following rights,
privileges, restrictions and conditions:
(i) the First Preferred Shares may at any time and from time to
time be issued in one or more series, each series to consist
of such number of shares as may, before the issue thereof, be
determined by resolution of the directors of the Corporation;
and
(ii) subject to the provisions of the Business Corporations Act
(Alberta), the directors of the Corporation may by resolution
fix from time to time before the issue thereof the
designation, rights, privileges, restrictions and conditions
attaching to each series of the First Preferred Shares.
C. First Preferred Shares, Series A
Series A of the First Preferred Shares shall consist of 50,000 shares, which
shall be designated as the "First Preferred Shares, Series A" (the "Series A
Shares") and in addition to the rights, restrictions, conditions and limitations
attached to the First Preferred Shares as a class, shall have attached thereto
the following rights, restrictions, conditions and limitations:
<PAGE>
-2-
1. STATED VALUE
1.1 The Series A Shares of the Corporation shall have a stated value for
stated capital account purposes of $ 1,000 per share.
2. LIQUIDATION
2.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or other distribution of assets or property of the Corporation among
its shareholders for the purpose of winding-up its affairs, the holders of the
Series A Shares shall be entitled to receive $1,000 per such share, together
with an amount equal to all accrued and unpaid dividends thereon to and
including the date of payment whether or not such dividends have been declared
and whether or not the Corporation has monies properly applicable to the payment
of dividends. The holders of Series A Shares shall be entitled to be paid all
such amounts before any assets or property of the Corporation shall be
distributed to the holders of any Common Shares or other shares of the capital
of the Corporation ranking junior to the Series A Shares.
2.2 After payment to the holders of the Series A Shares of the amounts so
payable to them, they shall not be entitled to share in any further distribution
of the property or assets of the Corporation.
3. REDEMPTION OF SHARES
3.1 Subject to section 3.2, the Series A Shares are not redeemable by the
Corporation on or prior to June 30, 2001. Thereafter the Corporation may,
subject to applicable provisions of the Business Corporations Act (Alberta), as
now enacted, or as the same may from time to time be amended, reenacted or
replaced, redeem at any time all of the outstanding Series A Shares or, from
time to time any part thereof in such manner as the Board of Directors may
determine, or if the Board of Directors so determines, pro rata, on payment of
$1,000 for each such share to be redeemed, together with an amount equal to all
accrued and unpaid dividends to and including the date fixed for redemption (the
"Redemption Amount") whether or not such dividends have been declared and
whether or not the Corporation has monies properly applicable to the payment of
such dividends.
3.2 At any time after June 30, 1992 and before July 1, 1999, or upon the
occurrence of any of the following events:
(a) if the Corporation becomes insolvent, a receiver is appointed
to manage the business and affairs of the Corporation, or a
petition in bankruptcy is filed or presented against the
Corporation; or
(b) if the Corporation makes or proposes to make a sale of all or
substantially all of its assets in a manner which requires
approval of the Corporation's shareholders
a holder of Series A Shares shall, subject to the requirements of the Business
Corporations Act (Alberta) as now enacted, or as the same may from time to time
be amended, reenacted or replaced, be entitled to require the Corporation to
redeem, all or any of the Series A Shares registered in the name of such holder
on the books of the Corporation, by tendering to the Corporation at its
<PAGE>
-3-
registered office a share certificate or certificates representing the Series A
Shares which the registered holder desires to have the Corporation redeem,
together with a request in writing specifying that the registered holder desires
to have the Series A Shares represented by such certificate or certificates
redeemed by the Corporation and, if part only of the shares represented by such
certificate or certificates is to be redeemed, the number thereof so to be
redeemed, and the business date (hereinafter referred to as the "Redemption
Date") on which the holder desires to have the Corporation redeem such Series A
Shares. The Redemption Date shall not be less than ten (10) days after the day
on which the request in writing is given to the Corporation. Upon receipt of a
share certificate or certificates representing the Series A Shares which the
registered holder desires to have the Corporation redeem together with such a
request, the Corporation shall, on the Redemption Date, redeem such Series A
Shares by paying to such registered holder the Redemption Amount of each such
Series A Share being redeemed; provided that if the Corporation would be
prevented by law from redeeming all of the Series A Shares requested to be
redeemed, then the Corporation shall redeem, disregarding fractions, that number
of Series A Shares that it is permitted by law to redeem. Such payment shall be
made by cheque payable at par at any branch of the Corporation's bankers for the
time being in Canada or, with the written agreement of the holders of the Series
A Shares to be redeemed, in any other manner, including by issuance of
securities or delivery of property other than money. If a part only of the
shares represented by any certificate be redeemed a new certificate for the
balance shall be issued at the expense of the Corporation. The said Series A
Shares shall be redeemed on the Redemption Date and from and after the
Redemption Date such shares shall cease to be entitled to dividends and the
holder thereof shall not be entitled to exercise any of the rights of holders of
Series A Shares in respect thereof unless payment of the Redemption Amount is
not made on the Redemption Date, in which event the rights of the holder of the
said Series A Shares shall remain unaffected.
3.3 Series A Shares which are redeemed or deemed to be redeemed in
accordance with this Section 3 shall be and be deemed to be cancelled and shall
not be reissued.
4. VOTING PROVISION
Subject to the provisions of the Business Corporations Act (Alberta), the
holders of the Series A Shares shall be entitled, in addition to their rights to
vote as a class and as hereinafter provided, to receive notice of or attend any
meeting of the shareholders of the Corporation and to vote at any such meeting.
Holders of the Series A Shares shall be entitled to such number of votes, in the
aggregate, equal to fifteen eighty-fifths (15/85) of the number of votes
attached to all other shares entitled to vote at such meeting.
5. DIVIDENDS
5.1 The holder of Series A Shares shall be entitled to receive preferential
dividends in respect of each fiscal period of the Corporation equal to the
lesser of
(i) the Earned Income of the Corporation for the fiscal
period; and
<PAGE>
-4-
(ii) an amount equal to that proportion of $100 per share,
that the number of days in the fiscal period during
which the Series A Shares are issued and outstanding,
bears to 365.
Dividends in respect of a fiscal period will accrue and be payable out of the
monies properly applicable to the payment of dividends on the date the
Corporation's return of income for that fiscal period is required to be filed.
If on any dividend payment date, the dividend payable on such date is not paid
in full on all of the Series A Shares then outstanding, such dividend or the
unpaid part thereof shall be paid on a subsequent date or dates, to be
determined by the Board of Directors after they have determined that the
Corporation shall have sufficient monies properly applicable to the payment of
the dividend.
5.2 For the purposes of section 5.1, the Earned Income of the Corporation
for a fiscal period thereof shall be the amount reported by the Corporation, and
reviewed by a nationally-recognized firm of chartered accountants, in the
Corporation's return of income for the fiscal period as being the Corporation's
estimate of its taxable income under Part I of the Income Tax Act for such
fiscal period.
6. NO PREEMPTIVE RIGHTS
6.1 Holders of Series A Shares shall not be entitled as of right to
subscribe for or purchase or receive any shares, bonds, debentures or other
securities ofthe Corporation now or hereafter authorized, except as provided
for in these provisions.
7. RESTRICTIONS
7.1 So long as any Series A Shares are outstanding the Corporation shall
not, without approval of the holders of the Series A Shares;
7.1.1 declare, pay or set aside for payment any dividends on any
shares of the Corporation ranking on a parity with or junior
to the Series A Shares with respect to payment of dividends;
7.1.2 call for redemption, redeem, purchase or otherwise retire to
make any capital distribution in respect of any shares of the
Corporation ranking junior to, or on a parity with, the Series
A Shares with respect to distribution of assets in the event
of liquidation, dissolution or winding-up of the Corporation
or with respect to payment of dividends; or
7.1.3 issue any shares of a class ranking in priority to or on a
parity with the Series A Shares.
<PAGE>
-5-
8. APPROVAL BY HOLDERS OF SERIES A SHARES
8.1 For the purposes hereof, any consent or approval given by the holders
of Series A Shares shall be deemed to have been sufficiently given if it shall
have been given in writing by the holders of all the outstanding Series A Shares
or by a resolution passed at a meeting of holders of Series A Shares duly called
and held upon not less than 21 days notice to the holders and carried by the
affirmative vote of not less than two-thirds of the votes cast at such meeting.
For the purposes of such meeting, one holder of Series A Shares present in
person or represented by duly appointed proxy representing not less than 25% of
the then issued and outstanding Series A Shares shall constitute a quorum. If at
any such meeting a quorum is not present within one-half hour after the time
appointed for such meeting, then the meeting shall be adjourned to such date not
less than 21 nor more than 28 days thereafter and to such time and place as may
be designated by the chairman, and not less than 10 days written notice shall be
given of such adjourned meeting. At such adjourned meeting the holders of Series
A Shares present or represented by proxy may transact the business for which the
meeting was originally convened and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast at such meeting
shall constitute the consent or approval of the holders of Series A Shares. On
every poll taken at every meeting of the holders of Series A Shares or of the
holders of First Preferred Shares as a class, every holder of Series A Shares
shall be entitled to one vote in respect of each Series A Shares held.
9. NOTICES
9.1 Any notice required to be given under the provisions attaching to the
Series A Shares to the holders thereof shall be given by posting the same in a
postage paid envelope addressed to each holder at the last address of such
holder as it appears on the books of the Corporation or in the event of the
address of any such holder not so appearing, then to the address of such holder
last known to the Corporation; provided that accidental failure or omission to
give any notice as aforesaid to one or more of such holders shall not invalidate
any action or proceeding founded thereon. In the event of a threatened or actual
disruption in the mail service, notice as aforesaid shall be given to registered
holders of Series A Shares by means of publication once in a daily newspaper of
general circulation in the city of Calgary. Any notice given by mail shall be
deemed to be given on the day on which it is mailed. Any notice given by
publication shall be deemed to be given on the day of publication.
D. First Preferred Shares, Series B
Series B of the First Preferred Shares shall consist of 60,000 shares, which
shall be designated as the "First Preferred Shares, Series B" (the "Series B
Shares") and in addition to the rights, restrictions, conditions and limitations
attached to the First Preferred Shares as a class, shall have attached thereto
the following rights, restrictions, conditions and limitations:
<PAGE>
-6-
1. STATED VALUE
1.1 The Series B Shares of the Corporation shall have a stated value for
stated capital account purposes of $1,000 per share.
2. LIQUIDATION
2.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or other distribution of assets or property of the Corporation among
its shareholders for the purpose of winding-up its affairs, the holders of the
Series B Shares shall be entitled to receive $1,000 per such share, together
with an amount equal to all accrued and unpaid dividends thereon to and
including the date of payment whether or not such dividends have been declared
and whether or not the Corporation has monies properly applicable to the payment
of dividends. The holders of Series B Shares shall be entitled to be paid all
such amounts before any assets or property of the Corporation shall be
distributed to the holders of any Common Shares, First Preferred Shares, Series
A or other shares of the capital of the Corporation ranking junior to the Series
B Shares.
2.2 After payment to the holders of the Series B Shares of the amount so
payable to them, they shall not be entitled to share in any further distribution
of the property or assets of the Corporation.
3. REDEMPTION OF SHARES
3.1 Subject to section 3.2, the Series B Shares are not redeemable by the
Corporation on or prior to May 31, 2005. Thereafter the Corporation may, subject
to the applicable provisions of the Business Corporations Act (Alberta), as now
enacted, or as the same may from time to time be amended, reenacted or replaced,
redeem at any time all of the outstanding Series B Shares or, from time to time
any part thereof in such manner as the Board of Directors may determine, or if
the Board of Directors so determines, pro rata, on payment of $1,000 for each
such share to be redeemed, together with an amount equal to all accrued and
unpaid dividends to and including the date fixed for redemption (the "Redemption
Amount") whether or not such dividends have been declared and whether or not the
Corporation has monies properly applicable to the payment of such dividends.
3.2 At any time after May 31, 1996 and before June 1, 2003, or upon the
occurrence of any of the following events:
(a) if the Corporation becomes insolvent, a receiver is appointed
to manage the business and affairs of the Corporation, or a
petition in bankruptcy is filed or presented against the
Corporation; or
(b) if the Corporation makes or proposes to make a sale of all or
substantially all of its assets in a manner which requires
approval of the Corporation's shareholders,
a holder of Series B Shares shall, subject to the requirements of the Business
Corporations Act (Alberta) as now enacted, or as the same may from time to time
be amended, reenacted or replaced, be entitled to require the Corporation to
redeem, all or any of the Series B Shares registered in the
<PAGE>
-7-
name of such holder on the books of the Corporation, by tendering to the
Corporation at its registered office a share certificate or certificates
representing the Series B Shares which the registered holder desires to have the
Corporation redeem, together with a request in writing specifying that the
registered holder desires to have the Series B Shares represented by such
certificate or certificates redeemed by the Corporation and, if part only of the
shares represented by such certificate or certificates is to be redeemed, the
number thereof so to be redeemed, and the business date (hereinafter referred to
as the "Redemption Date") on which the holder desires to have the Corporation
redeem such Series B Shares. The Redemption Date shall not be less than ten (10)
days after the day on which the request in writing is given to the Corporation.
Upon receipt of a share certificate or certificates representing the Series B
Shares which the registered holder desires to have the Corporation redeem
together with such a request, the Corporation shall, on the Redemption Date,
redeem such Series B Shares by paying to such registered holder the Redemption
Amount of each such Series B Share being redeemed; provided that if the
Corporation would be prevented by law from redeeming all of the Series B Shares
requested to be redeemed, then the Corporation shall redeem, disregarding
fractions, that number of Series B Shares that it is permitted by law to redeem.
Such payment shall be made by cheque payable at par at any branch of the
Corporation's bankers for the time being in Canada or, with the written
agreement of the holders of the Series B Shares to be redeemed, in any other
manner, including by issuance of securities or delivery of property other than
money. If a part only of the shares represented by any certificate is to be
redeemed, a new certificate for the balance of the shares not to be redeemed
shall be issued at the expense of the Corporation. The said Series B Shares
shall be redeemed on the Redemption Date and from and after the Redemption Date
such shares shall cease to be entitled to dividends and the holder thereof shall
not be entitled to exercise any of the rights of holders of Series B Shares in
respect thereof unless payment of the Redemption Amount is not made on the
Redemption Date, in which event the rights of the holders of the said Series B
Shares shall remain unaffected.
3.3 Series B Shares which are redeemed or deemed to be redeemed in
accordance with this section 3 shall be and be deemed to be cancelled and shall
not be reissued.
4. VOTING PROVISION
4.1 Subject to the provisions of the Business Corporations Act (Alberta),
the holders of the Series B Shares shall be entitled, in addition to their
rights to vote as a class and as hereinafter provided, to receive notice of or
attend any meeting of the shareholders of the Corporation and to vote at any
such meeting. Holders of the Series B Shares shall be entitled to such number of
votes, in the aggregate, equal to fifteen percent (15%) of the number of votes
entitled to vote at such meetings.
5. DIVIDENDS
5.1 The holder of Series B Shares shall be entitled to receive preferential
dividends (in priority to any dividends paid to the holders of Common Shares,
First Preferred Shares, Series A or other shares of the capital of the
Corporation ranking junior to the Series B Shares) in respect of each fiscal
period of the Corporation equal to the lesser of
(a) the Earned Income, as defined in section 5.2, of the
Corporation for the fiscal period; and
<PAGE>
-8-
(b) an amount equal to that proportion of $100 per share, that the
number of days in the fiscal period during which the Series B
Shares are issued and outstanding, bears to 365.
Dividends in respect of a fiscal period will accrue and be payable out of the
monies properly applicable to the payment of dividends on the date which is two
months after the date on which the Corporation's return of income for that
fiscal period is required to be filed.
If on any dividend payment date, the dividend payable on such date is not paid
in full on all of the Series B Shares then outstanding, such dividend or the
unpaid part thereof shall be paid on a subsequent date or dates, to be
determined by the Board of Directors after they have determined that the
Corporation shall have sufficient monies properly applicable to the payment of
the dividend.
5.2 For the purposes of section 5.1, the Earned Income of the Corporation
for a fiscal period thereof shall be the amount reported by the Corporation, and
reviewed by a nationally-recognized firm of chartered accountants, in the
Corporation's return of income for the fiscal period as being the Corporation's
estimate of its taxable income under Part I of the Income Tax Act (Canada) for
such fiscal period.
6. NO PREEMPTIVE RIGHTS
6.1 Holders of Series B Shares shall not be entitled as of right to
subscribe for or purchase or receive any shares, bonds, debentures or other
securities of the Corporation now or hereafter authorized, except as provided
for in these provisions.
7. RESTRICTIONS
7.1 So long as any Series B Shares are outstanding the Corporation shall
not, without approval of the holders of the Series B Shares;
(a) declare, pay or set aside for payment any dividends on any
shares of the Corporation ranking on a parity with or junior
to the Series B Shares with respect to payment of dividends;
(b) call for redemption, redeem, purchase or otherwise retire to
make any capital distribution in respect of any shares of the
Corporation ranking junior to, or on a parity with, the Series
B Shares with respect to the distribution of assets in the
event of a liquidation, dissolution or winding-up of the
Corporation or with respect to the payment of dividends; or
(c) issue any shares of a class ranking in priority to or on a
parity with the Series B Shares.
<PAGE>
-9-
8. APPROVAL BY HOLDERS OF SERIES B SHARES
8.1 For the purposes hereof, any consent or approval given by the holders
of Series B Shares shall be deemed to have been sufficiently given if it shall
have been given in writing by the holders of all the outstanding Series B Shares
or by a resolution passed at a meeting of holders of Series B Shares duly called
and held upon not less than 21 days notice to the holders and carried by the
affirmative vote of not less than two-thirds of the votes cast at such meeting.
For the purposes of such meeting, one holder of Series B Shares present in
person or represented by duly appointed proxy representing not less than 25% of
the then issued and outstanding Series B shares shall constitute a quorum. If at
any such meeting a quorum is not present within one-half hour after the time
appointed for such meeting, then the meeting shall be adjourned to such date not
less than 21 nor more than 28 days thereafter and to such time and place as may
be designated by the chairman, and not less than 10 days written notice shall be
given of such adjourned meeting. At such adjourned meeting the holders of Series
B Shares present or represented by proxy may transact the business for which the
meeting was originally convened and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast at such meeting
shall constitute the consent or approval of the holders of Series B Shares. On
every poll taken at every meeting of the holders of Series B Shares or of the
holders of First Preferred Shares as a class, every holder of Series B Shares
shall be entitled to one vote in respect of each Series B Share held.
9. NOTICES
9.1 Any notice required to be given under the provisions attaching the
Series B Shares to the holders thereof shall be given by posting the same in a
postage paid envelope addressed to each holder at the last address of such
holder as it appears on the books of the Corporation or in the event of the
address of any such holder not so appearing, then to the address of such holder
last known to the Corporation; provided that accidental failure or omission to
give any notice as aforesaid to one or more of such holders shall not invalidate
any action or proceeding founded thereon. In the event of a threatened or actual
disruption in the mail service, notice as aforesaid shall be given to registered
holders of Series B Shares by means of publication once in a daily newspaper of
general circulation in the City of Calgary. Any notice given by mail shall be
deemed to be given on the day on which it is mailed. Any notice given by
publication shall be deemed to be given on the day of publication.
<PAGE>
SCHEDULE B
1. The number of shareholders of the Corporation, exclusive of persons who
are in its employment or that of an affiliate and are shareholders of
the Corporation and exclusive of persons who, having been formerly in
the employment of the Corporation, or that of an affiliate, were, while
in that employment, shareholders of the Corporation, and have continued
to be shareholders of the Corporation after termination of that
employment, is limited to not more than fifty persons, two or more
persons who are the joint registered owners of one or more shares being
counted as one shareholder.
2. Any invitation to the public to subscribe for securities of the
Corporation is prohibited.
3. The Corporation has a lien on the shares of a shareholder or his legal
representative for a debt of that shareholder to the Corporation.
<PAGE>
UNION PACIFIC RESOURCES INC.
BY-LAW NO. 1
<PAGE>
INDEX
Page
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DEFINITIONS.................................................................1
REGISTERED OFFICE...........................................................1
SEAL .......................................................................2
DIRECTORS...................................................................2
Number ............................................................2
Vacancies..........................................................2
Powers ............................................................2
Duties ............................................................2
Qualification......................................................2
Term of Office.....................................................3
Election ..........................................................3
Consent to Election................................................3
Removal ..........................................................4
Vacation of Office.................................................4
Validity of Acts...................................................4
MEETINGS OF DIRECTORS.......................................................4
Place of Meeting...................................................4
Notice ............................................................4
Waiver of Notice...................................................5
Omission of Notice.................................................5
Telephone Participation............................................5
Adjournment........................................................5
Quorum and Voting..................................................5
Resolution in Lieu of Meeting......................................5
COMMITTEES OF DIRECTORS.....................................................6
General ..........................................................6
Audit Committee....................................................7
REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES...........................7
SUBMISSION OF CONTRACTS OR TRANSACTIONS TO..................................8
SHAREHOLDERS FOR APPROVAL...................................................8
CONFLICT OF INTEREST........................................................8
FOR THE PROTECTION OF DIRECTORS AND OFFICERS................................8
INDEMNITIES TO DIRECTORS AND OTHERS.........................................9
OFFICERS ..................................................................10
Appointment of Officers...........................................10
Removal of Officers and Vacation of Office........................10
Vacancies.........................................................10
Chairman of the Board.............................................10
President.........................................................10
Vice-President....................................................11
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Secretary.........................................................11
Treasurer.........................................................11
Assistant Secretary and Assistant Treasurer.......................11
Managing Director.................................................12
Duties of Officers may be Delegated...............................12
SHAREHOLDERS' MEETINGS.....................................................12
Annual Meeting....................................................12
Special Meetings..................................................12
Meeting on Requisition of Shareholders............................12
Notice .........................................................12
Waiver of Notice..................................................13
Omission of Notice................................................13
Record Dates......................................................13
Chairman of the Meeting...........................................14
Votes .........................................................14
Right to Vote.....................................................14
Proxies .........................................................15
Telephone Participation...........................................16
Adjournment.......................................................16
Quorum .........................................................16
Resolution in Lieu of Meeting.....................................17
SHARES AND TRANSFERS.......................................................17
Issuance .........................................................17
Security Certificates.............................................17
Agent .........................................................17
Dealings with Registered Holder...................................17
Surrender of Security Certificates................................17
Defaced, Destroyed, Stolen or Lost Security Certificates..........18
Enforcement of Lien for Indebtedness..............................18
DIVIDENDS..................................................................18
VOTING SECURITIES IN OTHER BODIES CORPORATE................................19
NOTICES, ETC...............................................................19
Service .........................................................19
Failure to Locate Shareholder.....................................19
Shares Registered in More than one Name...........................20
Persons Becoming Entitled by Operation of Law.....................20
Deceased Shareholder..............................................20
Signatures upon Notices...........................................20
Computation of Time...............................................20
Proof of Service..................................................20
CUSTODY OF SECURITIES......................................................20
EXECUTION OF CONTRACTS, ETC................................................21
FISCAL PERIOD..............................................................22
<PAGE>
UNION PACIFIC RESOURCES INC.
BY-LAW NO. 1
A by-law relating generally to the conduct of the business and
affairs of UNION PACIFIC RESOURCES INC. (hereinafter called the "Corporation").
IT IS HEREBY ENACTED as a by-law of the Corporation as
follows:
DEFINITIONS
1. In this by-law and all other by-laws of the Corporation, unless the
context otherwise specifies or requires:
(a) "Act" means the Business Corporations Act (Alberta) and the regulations
made thereunder, as from time to time amended, and in the case of such
amendment any reference in the by-laws shall be read as referring to
the amended provisions thereof;
(b) "board" means the board of directors of the Corporation;
(c) "by-laws" means the by-laws of the Corporation from time to time in
force and effect;
(d) all terms contained in the by-laws which are defined in the Act shall
have the meanings given to such terms in the Act;
(e) words importing the singular number only shall include the plural and
vice versa; words importing the masculine gender shall include the
feminine and neuter genders; and
(f) the headings used in the by-laws are inserted for reference purposes
only and are not to be considered or taken into account in construing
the terms or provisions thereof or to be deemed in any way to clarify,
modify or explain the effect of any such terms or provisions.
REGISTERED OFFICE
2. The Corporation shall at all times have a registered office within
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Alberta. Subject to subsection (4) of section 19 of the Act, the directors of
the Corporation may at any time:
(a) change the address of the registered office within Alberta;
(b) designate, or revoke or change a designation of, a records office
within Alberta; or
(c) designate, or revoke or change a designation of, a post office box
within Alberta as the address for service by mail of the Corporation.
<PAGE>
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SEAL
3. The corporate seal of the Corporation shall be such as the directors
may by resolution from time to time adopt.
DIRECTORS
4. Number. The number of directors shall be the number fixed by the
articles, or where the articles specify a variable number, the number shall be
not less than the minimum and not more than the maximum number so specified and
shall be determined from time to time within such limits by resolution of the
shareholders or the board of directors. Subject to subsection (4) of section 100
of the Act, at least half of the directors shall be resident Canadians.
5. Vacancies. Subject to section 106 of the Act, a quorum of directors may
fill a vacancy among the directors, except a vacancy resulting from an increase
in the number or minimum number of directors or from a failure to elect the
number or minimum number of directors required by the articles. If there is not
a quorum of directors, or if there has been a failure to elect the number or
minimum number of directors required by the articles, the directors then in
office shall forthwith call a special meeting of shareholders to fill the
vacancy and, if they fail to call a meeting or if there are no directors then in
office, the meeting may be called by any shareholder. If the shareholders have
adopted an amendment to the articles to increase the number or minimum number of
directors, and have not, at the meeting at which they adopted the amendment,
elected an additional number of directors authorized by the amendment, the
directors then in office shall forthwith call a special meeting of shareholders
to fill the vacancy.
A director appointed or elected to fill a vacancy holds office for the
unexpired term of his predecessor.
6. Powers. Subject to any unanimous shareholder agreement, the directors
shall manage the business and affairs of the Corporation and may exercise all
such powers and do all such acts and things as may be exercised or done by the
Corporation and are not expressly directed or required to be done in some other
manner by the Act, the articles, the by-laws, any special resolution of the
Corporation, a unanimous shareholder agreement or by statute.
7. Duties. Every director and officer of the Corporation in exercising his
powers and discharging his duties shall:
(a) act honestly and in good faith with a view to the best interests of the
Corporation; and
(b) exercise the care, diligence and skill that a reasonably prudent person
would exercise in comparable circumstances.
8. Qualification. The following persons are disqualified from being a
director of the Corporation:
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(a) anyone who is less than 18 years of age;
(b) anyone who
(i) is a dependent adult as defined in the Dependent Adults Act or
is the subject of a certificate of incapacity under that Act,
(ii) is a formal patient as defined in the Mental Health Act,
(iii) is the subject of an order under The Mentally Incapacitated
Persons Act appointing a committee of his person or estate or
both, or
(iv) has been found to be a person of unsound mind by a court
elsewhere than in Alberta;
(c) a person who is not an individual; and
(d) a person who has the status of bankrupt.
Unless the articles otherwise provide, a director of the Corporation is
not required to hold shares issued by the Corporation.
9. Term of Office. A director's term of office (subject to the provisions,
if any, of the Corporation's articles or any unanimous shareholder agreement,
and subject to his election for an expressly stated term) shall be from the date
of the meeting at which he is elected or appointed until the close of the first
annual meeting of shareholders following his election or appointment or until
his successor is elected or appointed.
10. Election. Subject to sections 101 and 102 of the Act, shareholders of
the Corporation shall, by ordinary resolution at the first meeting of
shareholders and at each succeeding annual meeting at which an election of
directors is required, elect directors to hold office for a term expiring not
later than the close of the next annual meeting of shareholders following the
election. A director not elected for an expressly stated term ceases to hold
office at the close of the first annual meeting of shareholders following his
election but, if qualified, is eligible for re-election. Notwithstanding the
foregoing, if directors are not elected at a meeting of shareholders, the
incumbent directors continue in office until their successors are elected.
If a meeting of shareholders fails to elect the number or the minimum
number of directors required by the articles by reason of the disqualification
or death of any candidate, the directors elected at that meeting may exercise
all the powers of the directors if the number of directors so elected
constitutes a quorum.
11. Consent to Election. A person who is elected or appointed a director
is not a director unless he was present at the meeting when he was elected or
appointed and did not refuse to act as a director or, if he was not present at
the meeting when he was elected or appointed, he consented
<PAGE>
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to act as a director in writing before his election or appointment or within 10
days after it or he has acted as a director pursuant to the election or
appointment.
12. Removal. Subject to sections 102 and 104 of the Act, the shareholders
of the Corporation may by ordinary resolution at a special meeting remove any
director from office before the expiration of his term of office and may, by a
majority of votes cast at the meeting, elect any person in his stead for the
remainder of his term.
13. Vacation of Office. A director of the Corporation ceases to hold office
when:
(a) he dies or resigns;
(b) he is removed from office; or
(c) he becomes disqualified.
A resignation of a director becomes effective at the time a written
resignation is sent to the Corporation, or at the time specified in the
resignation, whichever is later.
14. Validity of Acts. An act of a director or officer is valid
notwithstanding an irregularity in his election or appointment or a defect in
his qualification. An act of the directors or a committee of directors is valid
notwithstanding non-compliance with paragraphs 4, 21 or 23 hereof.
MEETINGS OF DIRECTORS
15. Place of Meeting. Unless the articles otherwise provide, meetings of
directors and of any committee of directors may be held at any place. A meeting
of directors may be convened by the Chairman of the Board (if any), the
President or any director at any time and the Secretary shall upon direction of
any of the foregoing convene a meeting of directors.
16. Notice. Notice of the time and place for the holding of any meeting of
directors or of any committee of directors shall be sent to each director or
each director who is a member of such committee, as the case may be, not less
than forty-eight (48) hours before the time of the meeting; provided that a
meeting of directors or of any committee of directors may be held at any time
without notice if all the directors or members of such committee are present
(except where a director attends the meeting for the express purpose of
objecting to the transaction of any business on the grounds that the meeting is
not lawfully called) or if all the absent directors waive notice of the meeting.
The notice of a meeting of directors shall specify any matter referred to in
subsection (3) of section 110 of the Act that is to be dealt with at the
meeting, but need not specify the purpose or the business to be transacted at
the meeting.
For the first meeting of directors to be held following the election of
directors at an annual or special meeting of the shareholders or for a meeting
of directors at which a director is appointed to fill a vacancy in the board, no
notice of such meeting need be given to the newly elected
<PAGE>
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or appointed director or directors in order for the meeting to be duly
constituted, provided a quorum of the directors is present.
17. Waiver of Notice. Notice of any meeting of directors or of any
committee of directors or the time for the giving of any such notice or any
irregularity in any meeting or in the notice thereof may be waived by any
director in writing or by telecopy, telegram, cable or telex addressed to the
Corporation or in any other manner, and any such waiver may be validly given
either before or after the meeting to which such waiver relates. Attendance of a
director at any meeting of directors or of any committee of directors is a
waiver of notice of such meeting, except when a director attends a meeting for
the express purpose of objecting to the transaction of any business on the
grounds that the meeting is not lawfully called.
18. Omission of Notice. The accidental omission to give notice of any
meeting of directors or of any committee of directors to or the non-receipt of
any notice by any person shall not invalidate any resolution passed or any
proceeding taken at such meeting.
19. Telephone Participation. A director may participate in a meeting of
directors or of any committee of directors by means of telephone or other
communication facilities that permit all persons participating in the meeting to
hear each other, and a director participating in a meeting by those means is
deemed for the purposes of the Act and this by-law to be present at that
meeting.
20. Adjournment. Any meeting of directors or of any committee of directors
may be adjourned from time to time by the chairman of the meeting, with the
consent of the meeting, to a fixed time and place. Notice of an adjourned
meeting of directors or committee of directors is not required to be given if
the time and place of the adjourned meeting is announced at the original
meeting. Any adjourned meeting shall be duly constituted if held in accordance
with the terms of the adjournment and a quorum is present thereat. The directors
who formed a quorum at the original meeting are not required to form the quorum
at the adjourned meeting. If there is no quorum present at the adjourned
meeting, the original meeting shall be deemed to have terminated forthwith after
its adjournment. Any business may be brought before or dealt with at the
adjourned meeting which might have been brought before or dealt with at the
original meeting in accordance with the notice calling the same.
21. Quorum and Voting. Subject to the articles, a majority of the number of
directors constitutes a quorum at any meeting of directors and, notwithstanding
any vacancy among the directors, a quorum of directors may exercise all the
powers of the directors. Subject to subsections (3) and (4) of section 109 of
the Act, directors shall not transact business at a meeting of directors unless
a quorum is present and at least half of the directors present are resident
Canadians. Questions arising at any meeting of directors shall be decided by a
majority of votes. In the case of an equality of votes, the chairman of the
meeting in addition to his original vote shall have a second or casting vote.
22. Resolution in Lieu of Meeting. Subject to the articles or a unanimous
shareholder agreement, a resolution in writing, signed by all the directors
entitled to vote on that resolution at a meeting of directors or committee of
directors, is as valid as if it had been passed at a meeting of
<PAGE>
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directors or committee of directors. A resolution in writing dealing with all
matters required by the Act or this by-law to be dealt with at a meeting of
directors, and signed by all the directors entitled to vote at that meeting,
satisfies all the requirements of the Act and this by-law relating to meetings
of directors.
COMMITTEES OF DIRECTORS
23. General. The directors may from time to time appoint from their number
a managing director, who must be a resident Canadian, or a committee of
directors, at least half of whom shall be resident Canadians, and may delegate
to the managing director or such committee any of the powers of the directors,
except that no managing director or committee shall have the authority to:
(a) submit to the shareholders any question or matter requiring the
approval of the shareholders;
(b) fill a vacancy among the directors or in the office of auditor;
(c) issue securities except in the manner and on the terms authorized by
the directors;
(d) declare dividends;
(e) purchase, redeem or otherwise acquire shares issued by the Corporation,
except in the manner and on the terms authorized by the directors;
(f) pay a commission referred to in section 39 of the Act;
(g) approve a management proxy circular;
(h) approve any annual financial statements to be placed before the
shareholders of the Corporation; or
(i) adopt, amend or repeal by-laws of the Corporation.
Notwithstanding the foregoing and subject to the articles or any
unanimous shareholder agreement, the directors may, by resolution, delegate to a
director, managing director or committee of directors the power to:
(a) borrow money on the credit of the Corporation;
(b) issue, reissue, sell or pledge debt obligations of the Corporation;
(c) subject to section 42 of the Act, give a guarantee on behalf of the
Corporation to secure performance of an obligation of any person; and
<PAGE>
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(d) mortgage, hypothecate, pledge or otherwise create a security interest
in all or any property of the Corporation, owned or subsequently
acquired, to secure any obligation of the Corporation.
24. Audit Committee. Subject to subsection (3) of section 165 of the Act,
if any of the issued shares of the Corporation, or securities of the Corporation
which may or might be exchanged for or converted into shares of the Corporation,
were part of a distribution to the public and the Corporation has more than
fifteen shareholders, the directors shall elect annually from among their number
an audit committee to be composed of not fewer than three directors, a majority
of whom are not officers or employees of the Corporation or any of its
affiliates.
Each member of the audit committee shall serve during the pleasure of
the board of directors and, in any event, only so long as he shall be a
director. The directors may fill vacancies in the audit committee by election
from among their number.
The audit committee shall have power to fix its quorum at not less than
a majority of its members and to determine its own rules of procedure subject to
any regulations imposed by the board of directors from time to time and to the
following paragraph.
The auditor of the Corporation is entitled to receive notice of every
meeting of the audit committee and, at the expense of the Corporation, to attend
and be heard thereat, and, if so requested by a member of the audit committee,
shall attend every meeting of the committee held during the term of office of
the auditor. The auditor of the Corporation or any member of the audit committee
may call a meeting of the committee.
The audit committee shall review the financial statements of the
Corporation prior to approval thereof by the board and shall have such other
powers and duties as may from time to time by resolution be assigned to it by
the board.
REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES
25. Subject to the articles or any unanimous shareholder agreement, the
directors of the Corporation may fix the remuneration of the directors, officers
and employees of the Corporation. Any remuneration paid to a director of the
Corporation shall be in addition to the salary paid to such director in his
capacity as an officer or employee of the Corporation. The directors may also by
resolution award special remuneration to any director in undertaking any special
services on the Corporation's behalf other than the routine work ordinarily
required of a director of the Corporation. The confirmation of any such
resolution by the shareholders shall not be required. The directors, officers
and employees shall also be entitled to be paid their travelling and other
expenses properly incurred by them in connection with the affairs of the
Corporation.
The aggregate remuneration paid to the directors and the
aggregate remuneration paid to the five highest paid officers and employees,
other than directors, shall be disclosed to the shareholders at every annual
meeting.
<PAGE>
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SUBMISSION OF CONTRACTS OR TRANSACTIONS TO
SHAREHOLDERS FOR APPROVAL
26. The directors in their discretion may submit any contract, act or
transaction for approval, ratification or confirmation at any annual meeting of
the shareholders or at any special meeting of the shareholders called for the
purpose of considering the same and any contract, act or transaction that shall
be approved, ratified or confirmed by resolution passed by a majority of the
votes cast at any such meeting (unless any different or additional requirement
is imposed by the Act or by the Corporation's articles or any other by-law)
shall be as valid and as binding upon the Corporation and upon all the
shareholders as though it had been approved, ratified and/or confirmed by every
shareholder of the Corporation.
CONFLICT OF INTEREST
27. A director or officer of the Corporation who is a party to a material
contract or proposed material contract with the Corporation, or is a director or
an officer of or has a material interest in any person who is a party to a
material contract or proposed material contract with the Corporation shall
disclose the nature and extent of his interest at the time and in the manner
provided in the Act. Except as provided in the Act, no such director of the
Corporation shall vote on any resolution to approve such contract. If a material
contract is made between the Corporation and one or more of its directors or
officers, or between the Corporation and another person of which a director or
officer of the Corporation is a director or officer or in which he has a
material interest, (i) the contract is neither void nor voidable by reason only
of that relationship, or by reason only that a director with an interest in the
contract is present at or is counted to determine the presence of a quorum at a
meeting of directors or committee of directors that authorized the contract, and
(ii) a director or officer or former director or officer of the Corporation to
whom a profit accrues as a result of the making of the contract is not liable to
account to the Corporation for that profit by reason only of holding office as a
director or officer, if the director or officer disclosed his interest in
accordance with the provisions of the Act and the contract was approved by the
directors or the shareholders and it was reasonable and fair to the Corporation
at the time it was approved. This paragraph is subject to any unanimous
shareholder agreement.
FOR THE PROTECTION OF DIRECTORS AND OFFICERS
28. No director or officer for the time being of the Corporation shall be
liable to the Corporation for the acts, receipts, neglects or defaults of any
other director or officer or employee or for joining in any receipt or act for
conformity or for any loss, damage or expense happening to the Corporation
through the insufficiency or deficiency of title to any property acquired by the
Corporation or for or on behalf of the Corporation or for the insufficiency or
deficiency of any security in or upon which any of the monies of or belonging to
the Corporation shall be placed out or invested or for any loss or damage
arising from the bankruptcy, insolvency or tortious act of any person, firm or
corporation including any person, firm or corporation with whom or which any
monies, securities or effects shall be lodged or deposited or for any loss,
conversion, misapplication or misappropriation of or any damage resulting from
any dealings with any monies, securities or other assets belonging to the
Corporation or for any other loss, damage or misfortune whatever
<PAGE>
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which may happen in the execution of the duties of his respective office of
trust or in relation thereto, unless the same shall happen by or through his
failure to exercise the powers and to discharge the duties of his office
honestly, in good faith with a view to the best interests of the Corporation,
and in connection therewith to exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances, provided
that nothing herein contained shall relieve a director or officer from the duty
to act in accordance with the Act or relieve him from liability under the Act.
The directors for the time being of the Corporation shall not be under any duty
or responsibility in respect of any contract, act or transaction whether or not
made, done or entered into in the name or on behalf of the Corporation, except
such as shall have been submitted to and authorized or approved by the
directors. If any director or officer of the Corporation shall be employed by or
shall perform services for the Corporation otherwise than as a director or
officer or shall be a member of a firm or a shareholder, director or officer of
a body corporate which is employed by or performs services for the Corporation,
the fact of his being a shareholder, director or officer of the Corporation or
body corporate or member of the firm shall not disentitle such director or
officer or such firm or body corporate, as the case may be, from receiving
proper remuneration for such services.
INDEMNITIES TO DIRECTORS AND OTHERS
29. (1) Subject to section 119 of the Act, except in respect of an action
by or on behalf of the Corporation or body corporate to procure a judgment in
its favour, the Corporation shall indemnify a director or officer of the
Corporation, a former director or officer of the Corporation or a person who
acts or acted at the Corporation's request as a director or officer of a body
corporate of which the Corporation is or was a shareholder or creditor, and his
heirs and legal representatives, against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, reasonably
incurred by him in respect of any civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or having been a
director or officer of the Corporation or body corporate, if:
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
(2) The Corporation shall, subject to the approval of a Court (as
defined in the Act), indemnify a person referred to in subparagraph 29(1) hereof
in respect of an action by or on behalf of the Corporation or a body corporate
to procure a judgment in its favour, to which he is made a party by reason of
being or having been a director or an officer of the Corporation or body
corporate, against all costs, charges and expenses reasonably incurred by him in
connection with such action if he fulfills the conditions set out in
subparagraph 29(1)(a) and (b) hereof.
(3) Notwithstanding anything in this paragraph 29, a person referred
to in subparagraph 29(1) shall be entitled to indemnity from the Corporation in
respect of all costs, charges and expenses reasonably incurred by him in
connection with the defence of any civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or
<PAGE>
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having been a director or officer of the Corporation or body corporate, if the
person seeking indemnity:
(a) was substantially successful on the merits of his defence of the action
or proceeding; and
(b) fulfills the conditions set out in subparagraph 29(1)(a) and (b)
hereof.
OFFICERS
30. Appointment of Officers. Subject to the articles or any unanimous
shareholder agreement, the directors annually or as often as may be required may
appoint from among themselves a Chairman of the Board and shall appoint a
President and a Secretary and if deemed advisable may appoint one or more
Vice-Presidents, a Treasurer and one or more Assistant Secretaries and/or one or
more Assistant Treasurers. None of such officers except the Chairman of the
Board need be a director of the Corporation although a director may be appointed
to any office of the Corporation. Two or more offices of the Corporation may be
held by the same person. In case and whenever the same person holds the offices
of Secretary and Treasurer he may but need not be known as the
Secretary-Treasurer. The directors may from time to time appoint such other
officers, employees and agents as they shall deem necessary who shall have such
authority and shall perform such functions and duties as may from time to time
be prescribed by resolution of the directors. The directors may from time to
time and subject to the provisions of the Act, vary, add to or limit the duties
and powers of any officer, employee or agent.
31. Removal of Officers and Vacation of Office. Subject to the articles or
any unanimous shareholder agreement, all officers, employees and agents, in the
absence of agreement to the contrary, shall be subject to removal by resolution
of the directors at any time, with or without cause.
An officer of the Corporation ceases to hold office when he dies,
resigns or is removed from office. A resignation of an officer becomes effective
at the time a written resignation is sent to the Corporation, or at the time
specified in the resignation, whichever is later.
32. Vacancies. If the office of President, Vice-President, Secretary,
Assistant Secretary, Treasurer, Assistant Treasurer, or any other office created
by the directors pursuant to paragraph 30 hereof shall be or become vacant by
reason of death, resignation or in any other manner whatsoever, the directors
shall, in the case of the President and Secretary, and may, in the case of any
other officers, appoint an individual to fill such vacancy.
33. Chairman of the Board. The Chairman of the Board (if any) shall, if
present, preside as chairman at all meetings of the board and of shareholders.
He shall sign such contracts, documents or instruments in writing as require his
signature and shall have such other powers and shall perform such other duties
as may from time to time be assigned to him by resolution of the directors.
34. President. The President shall be the chief executive officer of the
Corporation (except as may otherwise be specified by the board of directors) and
shall, subject to the direction
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of the board of directors, exercise general supervision and control over the
business and affairs of the Corporation. In the absence of the Chairman of the
Board (if any), and if the President is also a director of the Corporation, the
President shall, when present, preside as chairman at all meetings of directors
and shareholders. He shall sign such contracts, documents or instruments in
writing as require his signature and shall have such other powers and shall
perform such other duties as may from time to time be assigned to him by
resolution of the directors or as are incident to his office.
35. Vice-President. The Vice-President or, if more than one, the
Vice-Presidents in order of seniority, shall be vested with all the powers and
shall perform all the duties of the President in the absence or inability or
refusal to act of the President, provided, however, that a Vice-President who is
not a director shall not preside as chairman at any meeting of directors or
shareholders. The Vice-President or, if more than one, the Vice-Presidents shall
sign such contracts, documents or instruments in writing as require his or their
signatures and shall have such other powers and shall perform such other duties
as may from time to time be assigned to him or them by resolution of the
directors.
36. Secretary. The Secretary shall give or cause to be given notices for
all meetings of directors, any committee of directors and shareholders when
directed to do so and shall, subject to the provisions of the Act, maintain the
records referred to in subsections (1), (3) and (5) of section 20 of the Act. He
shall sign such contracts, documents or instruments in writing as require his
signature and shall have such other powers and shall perform such other duties
as may from time to time be assigned to him by resolution of the directors or as
are incident to his office.
37. Treasurer. Subject to the provisions of any resolution of the
directors, the Treasurer shall have the care and custody of all the funds and
securities of the Corporation and shall deposit the same in the name of the
Corporation in such bank or banks or with such other depositary or depositaries
as the directors may by resolution direct. He shall prepare and maintain
adequate accounting records. He shall sign such contracts, documents or
instruments in writing as require his signature and shall have such other powers
and shall perform such other duties as may from time to time be assigned to him
by resolution of the directors or as are incident to his office. He may be
required to give such bond for the faithful performance of his duties as the
directors in their uncontrolled discretion may require and no director shall be
liable for failure to require any such bond or for the insufficiency of any such
bond or for any loss by reason of the failure of the Corporation to receive any
indemnity thereby provided.
38. Assistant Secretary and Assistant Treasurer. The Assistant Secretary
or, if more than one, the Assistant Secretaries in order of seniority, and the
Assistant Treasurer or, if more than one, the Assistant Treasurers in order of
seniority, shall be vested with all the powers and shall perform all the duties
of the Secretary and Treasurer, respectively, in the absence or inability or
refusal to act of the Secretary or Treasurer as the case may be. The Assistant
Secretary or, if more than one, the Assistant Secretaries and the Assistant
Treasurer or, if more than one, the Assistant Treasurers shall sign such
contracts, documents or instruments in writing as require his or their
signatures respectively and shall have such other powers and shall perform such
other duties as may from time to time be assigned to him or them by resolution
of the directors.
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39. Managing Director. The directors may from time to time appoint from
their number a Managing Director who must be a resident Canadian and may
delegate to the Managing Director any of the powers of the directors subject to
the limits on authority provided by subsection (3) of section 110 of the Act.
The Managing Director shall conform to all lawful orders given to him by the
directors and shall at all reasonable times give to the directors or any of them
all information they may require regarding the affairs of the Corporation. Any
agent or employee appointed by the Managing Director shall be subject to
discharge by the directors.
40. Duties of Officers may be Delegated. In case of the absence or
inability or refusal to act of any officer of the Corporation or for any other
reason that the directors may deem sufficient, the directors may delegate all or
any of the powers of such officer to any other officer or to any director for
the time being.
SHAREHOLDERS' MEETINGS
41. Annual Meeting. Subject to sections 126 and 127 of the Act, the annual
meeting of shareholders shall be held at the registered office of the
Corporation or at a place elsewhere within Alberta determined by the directors
on such day in each year and at such time as the directors may determine.
42. Special Meetings. The directors of the Corporation may at any time call
a special meeting of shareholders to be held on such day and at such time and,
subject to section 126 of the Act, at such place within Alberta as the directors
may determine.
43. Meeting on Requisition of Shareholders. The holders of not less than
five percent (5%) of the issued shares of the Corporation that carry the right
to vote at a meeting sought to be held may requisition the directors to call a
meeting of shareholders for the purposes stated in the requisition. The
requisition shall state the business to be transacted at the meeting and shall
be sent to each director and to the registered office of the Corporation.
Subject to subsection (3) of section 137 of the Act, upon receipt of the
requisition, the directors shall call a meeting of shareholders to transact the
business stated in the requisition. If the directors do not within twenty-one
days after receiving the requisition call a meeting, any shareholder who signed
the requisition may call the meeting.
44. Notice. A notice in writing of a meeting of shareholders stating the
day, hour and place of meeting and if special business is to be transacted
thereat, stating (i) the nature of that business in sufficient detail to permit
the shareholder to form a reasoned judgment on that business and (ii) the text
of any special resolution to be submitted to the meeting, shall be sent to each
shareholder entitled to vote at the meeting, who on the record date for notice
is registered on the records of the Corporation or its transfer agent as a
shareholder, to each director of the Corporation and to the auditor of the
Corporation not less than 21 days and not more than 50 days (exclusive of the
day of mailing and of the day for which notice is given) before the date of the
meeting; provided that a meeting of shareholders may be held for any purpose on
any day and at any time and, subject to section 126 of the Act, at any place
without notice if all the shareholders and all other persons entitled to attend
such meeting are present in person or represented by proxy at the meeting
(except
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where a shareholder or other person attends the meeting for the express purpose
of objecting to the transaction of any business on the grounds that the meeting
is not lawfully called) or if all the shareholders and all other persons
entitled to attend such meeting and not present in person nor represented by
proxy thereat waive notice of the meeting.
A director of the Corporation is entitled to receive notice of and to
attend and be heard at every meeting of shareholders of the Corporation.
The auditor of the Corporation is entitled to receive notice of every
meeting of shareholders of the Corporation and, at the expense of the
Corporation, to attend and be heard at every meeting on matters relating to his
duties as auditor.
45. Waiver of Notice. Notice of any meeting of shareholders or the time for
the giving of any such notice or any irregularity in any meeting or in the
notice thereof may be waived by any shareholder, the duly appointed proxy of any
shareholder, any director or the auditor of the Corporation in writing or by
telecopy, telegram, cable or telex addressed to the Corporation or in any other
manner, and any such waiver may be validly given either before or after the
meeting to which such waiver relates. Attendance of a shareholder or any other
person entitled to attend a meeting of shareholders is a waiver of notice of
such meeting, except when he attends a meeting for the express purpose of
objecting to the transaction of any business on the grounds that the meeting is
not lawfully called.
46. Omission of Notice. The accidental omission to give notice of any
meeting of shareholders to or the non-receipt of any notice by any person shall
not invalidate any resolution passed or any proceeding taken at any such
meeting.
47. Record Dates. The directors may fix in advance a date as the record
date for the determination of shareholders (i) entitled to receive payment of a
dividend, (ii) entitled to participate in a liquidation distribution or (iii)
for any other purpose except the right to receive notice of or to vote at a
meeting of shareholders, but such record date shall not precede by more than 50
days the particular action to be taken.
The directors may also fix in advance a date as the record date for the
determination of shareholders entitled to receive notice of a meeting of
shareholders, but such record date shall not precede by more than 50 days or by
less than 21 days the date on which the meeting is to be held.
If no record date is fixed,
(a) the record date for the determination of shareholders entitled to
receive notice of a meeting of shareholders shall be
(i) at the close of business on the last business day preceding
the day on which the notice is sent; or
(ii) if no notice is sent, the day on which the meeting is held;
and
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(b) the record date for the determination of shareholders for any purpose
other than to establish a shareholder's right to receive notice of a
meeting or to vote shall be at the close of business on the day on
which the directors pass the resolution relating to that purpose.
48. Chairman of the Meeting. In the absence of the Chairman of the Board
(if any), the President and any Vice-President who is a director, the
shareholders present entitled to vote shall elect another director as chairman
of the meeting and if no director is present or if all the directors present
decline to take the chair then the shareholders present shall elect one of their
number to be chairman.
49. Votes. Votes at meetings of shareholders may be given either personally
or by proxy. Every question submitted to any meeting of shareholders shall be
decided on a show of hands except when a ballot is required by the chairman of
the meeting or is demanded by a shareholder or proxyholder entitled to vote at
the meeting. A shareholder or proxyholder may demand a ballot either before or
on the declaration of the result of any vote by show of hands. At every meeting
at which he is entitled to vote, every shareholder present in person and every
proxyholder shall have one (1) vote on a show of hands. Upon a ballot at which
he is entitled to vote every shareholder present in person or by proxy shall
(subject to the provisions, if any, of the articles) have one (1) vote for every
share registered in his name. In the case of an equality of votes the chairman
of the meeting shall not, either on a show of hands or on a ballot, have a
second or casting vote in addition to the vote or votes to which he may be
entitled as a shareholder or proxyholder.
At any meeting, unless a ballot is demanded by a shareholder or
proxyholder entitled to vote at the meeting a declaration by the chairman of the
meeting that a resolution has been carried unanimously or by a particular
majority or lost or not carried by a particular majority shall be conclusive
evidence of the fact without proof of the number or proportion of votes recorded
in favour of or against the resolution.
If at any meeting a ballot is demanded on the election of a chairman or
on the question of adjournment or termination, the ballot shall be taken
forthwith without adjournment. If a ballot is demanded on any other question or
as to the election of directors, the ballot shall be taken in such manner and
either at once or later at the meeting or after adjournment as the chairman of
the meeting directs. The result of a ballot shall be deemed to be the resolution
of the meeting at which the ballot was demanded. A demand for a ballot may be
withdrawn.
50. Right to Vote. Subject to section 132 of the Act or unless the articles
otherwise provide, each share of the Corporation entitles the holder of it to
one vote at a meeting of shareholders.
Where a body corporate or association is a shareholder of the
Corporation, any individual authorized by a resolution of the directors or
governing body of the body corporate or association to represent it at meetings
of shareholders of the Corporation is the person entitled to vote at all such
meetings of shareholders in respect of the shares held by such body corporate or
association.
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Where a person holds shares as a personal representative, such person
or his proxy is the person entitled to vote at all meetings of shareholders in
respect of the shares so held by him.
Where a person mortgages, pledges or hypothecates his shares, such
person or his proxy is the person entitled to vote at all meetings of
shareholders in respect of such shares so long as such person remains the
registered owner of such shares unless, in the instrument creating the mortgage,
pledge or hypothec, he has expressly empowered the person holding the mortgage,
pledge or hypothec to vote in respect of such shares, in which case, subject to
the articles, such holder or his proxy is the person entitled to vote in respect
of the shares.
Where two or more persons hold shares jointly, one of those holders
present at a meeting of shareholders may in the absence of the others vote the
shares, but if two or more of those persons who are present, in person or by
proxy, vote, they shall vote as one on the shares jointly held by them.
51. Proxies. Every shareholder, including a shareholder that is a body
corporate, entitled to vote at a meeting of shareholders may by means of a proxy
appoint a proxyholder and one or more alternate proxyholders, who are not
required to be shareholders, to attend and act at the meeting in the manner and
to the extent authorized by the proxy and with the authority conferred by the
proxy.
An instrument appointing a proxyholder shall be in written or printed
form and shall be executed by the shareholder or by his attorney authorized in
writing and is valid only at the meeting in respect of which it is given or any
adjournment of that meeting.
An instrument appointing a proxyholder may be in the following form or
in any other form which complies with the requirements of the Act:
The undersigned shareholder of ____________________ hereby
appoints ________________________ of ______________________,
whom failing, _____________________ of _____________________
as the nominee of the undersigned to attend and act for and on
behalf of the undersigned at the meeting of the shareholders
of the said Corporation to be held on the ___ day of _______,
19__ and at any adjournment thereof in the same manner, to the
same extent and with the same power as if the undersigned were
personally present at the said meeting or such adjournment
thereof.
Dated the ___ day of _________, 19__.
------------------------
Signature of Shareholder
The directors may specify in a notice calling a meeting of shareholders
a time not exceeding forty-eight (48) hours, excluding Saturdays, Sundays and
holidays, preceding the meeting
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or an adjournment of the meeting before which time proxies to be used at the
meeting must be deposited with the Corporation or its agent.
The chairman of the meeting of shareholders may in his discretion
accept any written communication (including without limitation any telecopy,
telegram, cable or telex) as to the authority of anyone claiming to vote on
behalf of and to represent a shareholder notwithstanding that no instrument of
proxy conferring such authority has been deposited with the Corporation, and any
votes given in accordance with such written communication accepted by the
chairman of the meeting shall be valid and shall be counted.
52. Telephone Participation. A shareholder or any other person entitled to
attend a meeting of shareholders may participate in the meeting by means of
telephone or other communication facilities that permit all persons
participating in the meeting to hear each other and a person participating in
such a meeting by those means is deemed for the purposes of the Act and this
by-law to be present at the meeting.
53. Adjournment. The chairman of the meeting may with the consent of the
meeting adjourn any meeting of shareholders from time to time to a fixed time
and place and if the meeting is adjourned by one or more adjournments for an
aggregate of less than thirty (30) days it is not necessary to give notice of
the adjourned meeting other than by announcement at the time of an adjournment.
If a meeting of shareholders is adjourned by one or more adjournments for an
aggregate of thirty (30) days or more, notice of the adjourned meeting shall be
given as for an original meeting but, unless the meeting is adjourned by one or
more adjournments for an aggregate of more than ninety (90) days, subsection (1)
of section 143 of the Act does not apply.
Any adjourned meeting shall be duly constituted if held in accordance
with the terms of the adjournment and a quorum is present thereat. The persons
who formed a quorum at the original meeting are not required to form the quorum
at the adjourned meeting. If there is no quorum present at the adjourned
meeting, the original meeting shall be deemed to have terminated forthwith after
its adjournment. Any business may be brought before or dealt with at the
adjourned meeting which might have been brought before or dealt with at the
original meeting in accordance with the notice calling the same.
54. Quorum. Two (2) persons present and each holding or representing by
proxy at least one (1) issued share of the Corporation shall be a quorum at any
meeting of shareholders for the election of a chairman of the meeting and for
the adjournment of the meeting to a fixed time and place but not for the
transaction of any other business; for all other purposes two (2) persons
present and holding or representing by proxy one-twentieth of the shares
entitled to vote at the meeting shall be a quorum. If a quorum is present at the
opening of a meeting of shareholders, the shareholders present may proceed with
the business of the meeting, notwithstanding that a quorum is not present
throughout the meeting.
Notwithstanding the foregoing, if the Corporation has only one
shareholder, or one shareholder holding a majority of the shares entitled to
vote at the meeting, that shareholder present in person or by proxy constitutes
a meeting and a quorum for such meeting.
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55. Resolution in Lieu of Meeting. A resolution in writing signed by all
the shareholders entitled to vote on that resolution is as valid as if it had
been passed at a meeting of the shareholders. A resolution in writing dealing
with all matters required by the Act or this by-law to be dealt with at a
meeting of shareholders, and signed by all the shareholders entitled to vote at
that meeting, satisfies all the requirements of this Act or the by-law relating
to meetings of shareholders.
SHARES AND TRANSFERS
56. Issuance. Subject to the articles, any unanimous shareholder agreement
and to section 28 of the Act, shares in the Corporation may be issued at the
times and to the persons and for the consideration that the directors determine;
provided that a share shall not be issued until the consideration for the share
is fully paid in money or in property or past service that is not less in value
than the fair equivalent of the money that the Corporation would have received
if the share had been issued for money.
57. Security Certificates. A security holder is entitled at his option to a
security certificate that complies with the Act or a non-transferable written
acknowledgment of his right to obtain a security certificate from the
Corporation in respect of the securities of the Corporation held by him.
Security certificates shall (subject to compliance with section 45 of the Act)
be in such form as the directors may from time to time by resolution approve and
such certificates shall be signed by at least one director or officer of the
Corporation or by or on behalf of a registrar, transfer agent or branch transfer
agent of the Corporation, or by a trustee who certifies it in accordance with a
trust indenture. Any signatures required on a security certificate may be
printed or otherwise mechanically reproduced on it. If a security certificate
contains a printed or mechanically reproduced signature of a person, the
Corporation may issue the security certificate, notwithstanding that the person
has ceased to be a director or an officer of the Corporation, and the security
certificate is as valid as if he were a director or an officer at the date of
its issue.
58. Agent. The directors may from time to time by resolution appoint or
remove (i) one or more trust companies registered under the Trust Companies Act
as its agent or agents to maintain a central securities register or registers or
(ii) an agent or agents to maintain a branch securities register or registers
for the Corporation.
59. Dealings with Registered Holder. Subject to the Act, the Corporation
may treat the registered owner of a security as the person exclusively entitled
to vote, to receive notices, to receive any interest, dividend or other payments
in respect of the security, and otherwise to exercise all the rights and powers
of an owner of the security.
60. Surrender of Security Certificates. Subject to the Act, no transfer of
a security issued by the Corporation shall be registered unless or until the
security certificate representing the security to be transferred has been
presented for registration or, if no security certificate has been issued by the
Corporation in respect of such security, unless or until a duly executed
transfer in respect thereof has been presented for registration.
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61. Defaced, Destroyed, Stolen or Lost Security Certificates. In case of
the defacement, destruction, theft or loss of a security certificate, the fact
of such defacement, destruction, theft or loss shall be reported by the owner to
the Corporation or to an agent of the Corporation (if any), on behalf of the
Corporation, with a statement verified by oath or statutory declaration as to
the defacement, destruction, theft or loss and the circumstances concerning the
same and with a request for the issuance of a new security certificate to
replace the one so defaced, destroyed, stolen or lost. Upon the giving to the
Corporation (or if there be an agent, hereinafter in this paragraph referred to
as the "Corporation's agent", then to the Corporation and the Corporation's
agent) of a bond of a surety company (or other security approved by the
directors) in such form as is approved by the directors or by the Chairman of
the Board (if any), the President, a Vice-President, the Secretary or the
Treasurer of the Corporation, indemnifying the Corporation (and the
Corporation's agent if any) against all loss, damage or expense, which the
Corporation and/or the Corporation's agent may suffer or be liable for by reason
of the issuance of a new security certificate to such owner, and provided the
Corporation or the Corporation's agent does not have notice that the security
has been acquired by a bona fide purchaser and before a purchaser described in
section 64 of the Act has received a new, reissued or re-registered security, a
new security certificate may be issued in replacement of the one defaced,
destroyed, stolen or lost, if such issuance is ordered and authorized by any one
of the Chairman of the Board (if any), the President, a Vice-President, the
Secretary or the Treasurer of the Corporation or by resolution of the directors.
62. Enforcement of Lien for Indebtedness. Subject to subsection (8) of
section 45 of the Act, if the articles of the Corporation provide that the
Corporation has a lien on the shares registered in the name of a shareholder or
his legal representative for a debt of that shareholder to the Corporation, the
directors of the Corporation may sell any such shares in such manner as they
think fit until the debt has been paid in full. No sale shall be made until such
time as the debt ought to be paid and until a demand and notice in writing
stating the amount due and demanding payment and giving notice of intention to
sell in default shall have been served on the holder or his legal representative
of the shares subject to the lien and default shall have been made in payment of
such debt for seven days after service of such notice. Upon any such sale, the
proceeds shall be applied, firstly, in payment of all costs of such sale, and,
secondly, in satisfaction of such debt and the residue (if any) shall be paid to
such shareholder or his legal representative or as he shall direct. Upon any
such sale, the directors may enter or cause to be entered the purchaser's name
in the securities register of the Corporation as holder of the shares, and the
purchaser shall not be bound to see to the regularity or validity of, or be
affected by, any irregularity or invalidity in the proceedings, or be bound to
see to the application of the purchase money, and after his name or the name of
his legal representative has been entered in the securities register, the
regularity and validity of the sale shall not be impeached by any person.
DIVIDENDS
63. The directors may from time to time by resolution declare and the
Corporation may pay dividends on its issued shares, subject to the provisions
(if any) of the Corporation's articles.
The directors shall not declare and the Corporation shall not
pay a dividend if there are reasonable grounds for believing that:
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(a) the Corporation is, or would be after the payment be, unable to pay its
liabilities as they become due; or
(b) the realizable value of the Corporation's assets would thereby be less
than the aggregate of its liabilities and stated capital of all
classes.
The Corporation may pay a dividend by issuing fully paid shares of the
Corporation and, subject to section 40 of the Act, the Corporation may pay a
dividend in money or property.
64. In case several persons are registered as the joint holders of any
securities of the Corporation, any one of such persons may give effectual
receipts for all dividends and payments on account of dividends, principal,
interest and/or redemption payments in respect of such securities.
VOTING SECURITIES IN OTHER BODIES CORPORATE
65. All securities of any other body corporate carrying voting rights held
from time to time by the Corporation may be voted at all meetings of
shareholders, bondholders, debenture holders or holders of such securities, as
the case may be, of such other body corporate and in such manner and by such
person or persons as the directors of the Corporation shall from time to time
determine and authorize by resolution. The duly authorized signing officers of
the Corporation may also from time to time execute and deliver for and on behalf
of the Corporation proxies and arrange for the issuance of voting certificates
or other evidence of the right to vote in such names as they may determine
without the necessity of a resolution or other action by the directors.
NOTICES, ETC.
66. Service. Any notice or document required by the Act, the articles or
the by-laws to be sent to any shareholder or director of the Corporation may be
delivered personally to or sent by mail addressed to:
(a) the shareholder at his latest address as shown in the records of the
Corporation or its transfer agent; and
(b) the director at his latest address as shown in the records of the
Corporation or in the last notice filed under section 101 or 108 of the
Act.
Such notice or document shall be deemed to have been sent on the day of personal
delivery or mailing. With respect to every notice or document sent by mail it
shall be sufficient to prove that the envelope or wrapper containing the notice
or document was properly addressed and put into a post office or into a post
office letter box.
67. Failure to Locate Shareholder. If the Corporation sends a notice or
document to a shareholder and the notice or document is returned on three
consecutive occasions because the shareholder cannot be found, the Corporation
is not required to send any further notices or documents to the shareholder
until he informs the Corporation in writing of his new address.
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68. Shares Registered in More than one Name. All notices or documents
shall, with respect to any shares in the capital of the Corporation registered
in more than one name, be sent to whichever of such persons is named first in
the records of the Corporation and any notice or document so sent shall be
deemed to have been duly sent to all the holders of such shares.
69. Persons Becoming Entitled by Operation of Law. Every person who by
operation of law, transfer or by any other means whatsoever shall become
entitled to any shares in the capital of the Corporation shall be bound by every
notice or document in respect of such shares which prior to his name and address
being entered on the records of the Corporation in respect of such shares shall
have been duly sent to the person or persons from whom he derives his title to
such shares.
70. Deceased Shareholder. Any notice or document sent to any shareholder in
accordance with paragraph 66 hereof shall, notwithstanding that such shareholder
be then deceased and whether or not the Corporation has notice of his decease,
be deemed to have been duly sent in respect of the shares held by such
shareholder (whether held solely or with other persons) until some other person
be entered in his stead in the records of the Corporation as the holder or one
of the holders thereof and shall be deemed to have been duly sent to his heirs,
executors, administrators and legal representatives and all persons (if any)
interested with him in such shares.
71. Signatures upon Notices. The signature of any director or officer of
the Corporation upon any notice may be written, stamped, typewritten or printed
or partly written, stamped, typewritten or printed.
72. Computation of Time. All computations of time required to be made
pursuant to the articles or by-laws of the Corporation shall be made (i) in
accordance with the provisions of the Interpretation Act, to the extent such
provisions are applicable, and (ii) in any other case, in accordance with the
customary meaning ascribed to the words requiring such computation of time.
73. Proof of Service. A certificate of any officer of the Corporation in
office at the time of the making of the certificate or of an agent of the
Corporation as to facts in relation to the sending of any notice or document to
any shareholder, director, officer or auditor or publication of any notice or
document shall be conclusive evidence thereof and shall be binding on every
shareholder, director, officer or auditor of the Corporation, as the case may
be.
CUSTODY OF SECURITIES
74. All securities (including without limitation warrants) owned by the
Corporation may be lodged (in the name of the Corporation) with a chartered bank
or a trust company or in a safety deposit box or, if so authorized by resolution
of the directors, with such other depositaries or in such other manner as may be
determined from time to time by the directors.
All securities (including without limitation warrants) belonging to the
Corporation may be issued and held in the name of a nominee or nominees of the
Corporation (and if issued or
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held in the names of more than one nominee shall be held in the names of the
nominees jointly with right of survivorship) and shall be endorsed in blank with
endorsement guaranteed in order to enable transfer thereof to be completed and
registration thereof to be effected.
EXECUTION OF CONTRACTS, ETC.
75. Contracts, documents or instruments in writing requiring the signature
of the Corporation shall be signed on the Corporation's behalf by any officer of
the Corporation or any person designated by an officer of the Corporation or any
person or persons authorized by resolution of the directors and all contracts,
documents or instruments in writing so signed shall be binding upon the
Corporation without any further authorization or formality. The directors are
authorized from time to time by resolution to appoint any person or persons on
behalf of the Corporation either to sign contracts, documents or instruments in
writing generally or to sign specific contracts, documents or instruments in
writing.
The corporate seal of the Corporation may, when required, be affixed by
any such person to contracts, documents or instruments in writing signed by him
as aforesaid or by the person or persons appointed as aforesaid by resolution of
the directors.
The term "contracts, documents or instruments in writing" as used in
this by-law shall include deeds, mortgages, hypothecs, charges, cheques, drafts,
orders for the payment of money, notes, acceptances, bills of exchange,
conveyances, transfers and assignments of property, real or personal, immovable
or movable, agreements, releases, receipts and discharges for the payment of
money or other obligations, conveyances, transfers and assignments of securities
and all paper writings.
The signature or signatures of any such person or any person or persons
appointed as aforesaid by resolution of the directors may, if specifically
authorized by resolution of the directors, be printed, engraved, lithographed or
otherwise mechanically reproduced upon all contracts, documents or instruments
in writing or bonds, debentures or other securities of the Corporation executed
or issued by or on behalf of the Corporation and all contracts, documents or
instruments in writing or securities of the Corporation on which the signature
or signatures of any of the foregoing persons shall be so reproduced, by
authorization by resolution of the directors, shall be deemed to have been
manually signed by such persons whose signature or signatures is or are so
reproduced and shall be as valid to all intents and purposes as if they had been
signed manually and notwithstanding that the persons whose signature or
signatures is or are so reproduced may have ceased to hold office at the date of
the delivery or issue of such contracts, documents or instruments in writing or
securities of the Corporation.
<PAGE>
-22-
FISCAL PERIOD
76. The fiscal period of the Corporation shall terminate on such day in
each year as the board of directors may from time to time by resolution
determine.
ENACTED the 17th day of April, 1998.
/s/ [illegible] /s/ [illegible]
- ----------------------------- ------------------------------
President Secretary
<PAGE>
UNION PACIFIC RESOURCES INC.
BY-LAW NO. 2
A by-law respecting the borrowing of money, the giving of
guarantees and the giving of security by UNION PACIFIC RESOURCES INC.
(hereinafter called the "Corporation").
IT IS HEREBY ENACTED as a by-law of the Corporation as
follows:
The directors of the Corporation may from time to time:
(a) borrow money on the credit of the Corporation;
(b) issue, reissue, sell or pledge debt obligations of the Corporation,
including without limitation, bonds, debentures, notes or other
evidences of indebtedness or guarantee of the Corporation, whether
secured or unsecured;
(c) give a guarantee on behalf of the Corporation to secure performance of
an obligation of any individual, partnership, association, body
corporate, trustee, executor, administrator or legal representative;
(d) mortgage, hypothecate, pledge or otherwise create an interest in or
charge on all or any property of the Corporation, owned or subsequently
acquired, to secure payment of a debt or performance of any other
obligation of the Corporation;
(e) delegate to one or more directors, a committee of directors or one or
more officers of the Corporation as may be designated by the directors,
all or any of the powers conferred by the foregoing clauses of this
by-law to such extent and in such manner as the directors shall
determine at the time of each such delegation.
In the event any provision of any other by-law of the
Corporation now in force is inconsistent with or in conflict with any provision
of this by-law, the provisions of this by-law shall prevail to the extent
necessary to remove the inconsistency or conflict.
This by-law shall remain in force and be binding upon the
Corporation as regards any party acting on the faith thereof until a copy,
certified by the Secretary of the Corporation, of a by-law repealing or
replacing this by-law shall have been received by such party and duly
acknowledged in writing.
ENACTED the 17th day of April, 1998.
/s/ [illegible] /s/ [illegible]
- --------------------------- ---------------------------
President Secretary
<PAGE>
[Draft--8/20/98]
THIS INDENTURE among UNION PACIFIC RESOURCES
GROUP INC., a Utah corporation (hereinafter called
the "Company" and in its capacity as the guarantor
with respect to the Securities (as hereinafter
defined) issued by any of the Subsidiary Issuers (as
hereinafter defined), the "Guarantor") having its
principal office at 801 Cherry Street, Fort Worth,
Texas 76101, UNION PACIFIC RESOURCES INC., an Alberta
corporation ("UPRI"), having its principal executive
office at 400, 425 First Street, S.W., Calgary,
Alberta, Canada T2P 4V4, UPR CAPITAL COMPANY, a Nova
Scotia unlimited liability company ("UPR Capital"
and, together with UPRI, the "Subsidiary Issuers")
and THE BANK OF NEW YORK, a New York banking
association, trustee (hereinafter called the
"Trustee"), is made and entered into as of this th
day of 199 . The Company and the Subsidiary
Issuers, each in its capacity as an Issuer of
Securities is herein referred to as an "Issuer".
Recitals of the Company
Each of the Issuers and the Guarantor has duly authorized the
execution and delivery of this Indenture to provide for the issuance of
debentures, notes, bonds or other evidences of indebtedness, to be issued in one
or more fully registered series.
All things necessary to make this Indenture a valid agreement
of each of the Issuers and the Guarantor, in accordance with its terms, have
been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms
and conditions upon which the Securities are and are to be authenticated, issued
and delivered, and in consideration of the premises and the purchase of
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture
and of any indenture supplemental hereto, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United
States of America at the date of such computation,
<PAGE>
2
(4) all references in this instrument to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof' and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision; and
(5) "including" and words of similar import shall be deemed to
be followed by "without limitation".
(6) all references to the "applicable Issuer" are to the
Issuer of the Securities being described;
(7) all references to the "Guarantee" and the "Guarantor" are
operative only where a Subsidiary Issuer is, was or may become the
Issuer of the relevant series of Securities, and only with respect to
such series of Securities.
Certain terms, used principally in Article Six, are defined in
that Article.
"Act", when used with respect to any Securityholder, has the
meaning specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee to authenticate Securities under Section 614.
"Board of Directors" when used with reference to any of the
Issuers or the Guarantor means either the board of directors of such Issuer or
the Guarantor, as the case may be, or any duly authorized committee of that
board.
"Board Resolution" when used with reference to any of the
Issuers or the Guarantor means a copy of a resolution certified by the Secretary
or an Assistant Secretary of such Issuer or the Guarantor, as the case may be,
to have been duly adopted by the Board of Directors of such Issuer or the
Guarantor, as the case may be, and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means each day which is neither a Saturday,
Sunday or other day on which banking institutions in the pertinent Place or
Places of Payment are authorized or required by law or executive order to be
closed.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" when
used with reference to any of the Issuers or the Guarantor shall mean,
respectively, a written request, order or consent signed in the name of such
Issuer or the Guarantor, as the case may be, by its Chairman of
<PAGE>
3
the Board, President or a Vice President, and by its Treasurer, an Assistant
Treasurer, Controller, an Assistant Controller, Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in New York, New York at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at 101 Barclay Street, Floor 21 West, New York, New York,
10286, attention: Corporate Trust Administration.
"Debt" means indebtedness for money borrowed.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company
pursuant to either Section 204 or 301, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Domestic Subsidiary" means a Subsidiary of the Company which
is incorporated or conducting its principal operations within the United States
of America or any State thereof or off the coast of the United States of America
but within an area over which the United States of America or any State thereof
has jurisdiction.
"Event of Default" has the meaning specified in Article Five.
"Funded Debt" of any Person means all indebtedness for
borrowed money created, incurred, assumed or guaranteed in any manner by such
Person, and all indebtedness, contingent or otherwise incurred or assumed by
such Person in connection with the acquisition of any business, property or
asset, which in each case matures more than one year after, or which by its
terms is renewable or extendible or payable out of the proceeds of similar
indebtedness incurred pursuant to the terms of any revolving credit agreement or
any similar agreement at the option of such Person for a period ending more than
one year after the date as of which Funded Debt is being determined; provided,
however, that Funded Debt shall not include (i) any indebtedness for the
payment, redemption or satisfaction of which money (or evidences or
indebtedness, if permitted under the instrument creating or evidencing such
indebtedness) in the necessary amount shall have been irrevocably deposited in
trust with a trustee or proper depository either on or before the maturity or
redemption date thereof or (ii) any indebtedness of such Person to any of its
Subsidiaries or of any Subsidiary to such Person or any other Subsidiary or
(iii) any indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to the assets of such projects.
"Global Security" means with respect to any series of
Securities issued hereunder, a Security which is executed by the applicable
Issuer and authenticated and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, and which the Guarantor executed, as
applicable, the notation of any Guarantee pursuant to Article Twelve all in
accordance with this Indenture and an indenture supplemental hereto, if any, or
Board Resolution and pursuant to a Company Request, which shall be registered in
the name of the Depositary or its nominee and which shall represent, and shall
be denominated in an amount equal to the aggregate principal amount of, all of
the Outstanding Securities of such series or any portion thereof, in either case
having the same terms including, without limitation, the same original issue
date, date or dates on which principal is due, and interest rate or method of
determining interest.
"Guarantee" means the irrevocable and unconditional guarantee
by the Guarantor of any Security of any series of any Subsidiary Issuer
authenticated and delivered (i) as contemplated by Section 301 and endorsed on
such Security, if specified in a Board Resolution of the Guarantor, or (ii)
otherwise pursuant to Article Twelve.
<PAGE>
4
"Guarantor" means the Person named as the "Guarantor" in the
first paragraph of this instrument until any successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean any such successor Person.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or amended by
one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of
Securities established as contemplated by Section 301.
"Independent", when used with respect to any specified Person,
means such a Person who (i) is in fact independent, (2) does not have any direct
financial interest or any material indirect financial interest in the applicable
Issuer or the Guarantor or in any other obligor upon the Securities or in any
Affiliate of the applicable Issuer or the Guarantor or of such other obligor,
and (3) is not connected with the applicable Issuer or the Guarantor or such
other obligor or any Affiliate of the applicable Issuer or the Guarantor or of
such other obligor, as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to the Trustee, such Person shall be appointed by a Company Order and approved
by the Trustee, and such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within the meaning
hereof.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any series
of Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Issuer" means (i) any of the Persons named as an "Issuer" in
the first paragraph of this instrument until any successor Person shall have
become such pursuant to the applicable provisions of this Indenture in respect
of any such Person, and thereafter "Issuer", in respect of such Person shall
mean any such successor Person, and (ii) when used with respect to Securities,
shall mean the Issuer of Securities of the relevant series.
"Maturity", when used with respect to any Securities, means
the date on which the principal of any such Security becomes due and payable as
therein or herein provided, whether on a Repayment Date, at the Stated Maturity,
or by declaration of acceleration, call for redemption or otherwise.
"Mortgage" means any mortgage, pledge, lien, encumbrance,
charge or security interest of any kind.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate be signed also by an
engineer or an accountant or other expert, such engineer, accountant or other
expert (except as otherwise expressly provided in this Indenture) may be in the
employ of the applicable Issuer or the Guarantor, and shall be acceptable to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may (except as otherwise expressly provided in this Indenture) be an employee of
or of counsel to the applicable Issuer or the Guarantor. Such counsel shall be
acceptable to the Trustee, whose acceptance shall not be unreasonably withheld.
<PAGE>
5
"Original Issue Discount Security" means (i) any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof, and (ii)
any other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.
"Outstanding", when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancelation,
(ii) such Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent in trust for the Holders of such Securities; provided
that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) such Securities in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of
Section 306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by
a person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities owned by the applicable Issuer, the Guarantor or any
other obligor upon the Securities or any Affiliate of the applicable Issuer, the
Guarantor or of such other obligor shall be disregarded and deemed not to be
Outstanding. In determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which a Responsible Officer assigned to the corporate
trust department of the Trustee knows to be owned by the applicable Issuer, the
Guarantor or any other obligor upon the Securities or any Affiliate of the
applicable Issuer, the Guarantor or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the applicable Issuer, the Guarantor or any other obligor upon
the Securities or any Affiliate of the applicable Issuer, the Guarantor or such
other obligor.
"Paying Agent" means any Person authorized by any Issuer to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of such Issuer.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means with respect to any series of
Securities issued hereunder the city or political subdivision so designated with
respect to the series of Securities in question in accordance with the
provisions of Section 301.
"Predecessor Securities" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 306 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
<PAGE>
6
"Principal Property" means (i) any property owned or leased by
the applicable Issuer, the Guarantor or any Subsidiary of the applicable Issuer
or the Guarantor, or any interest of the applicable Issuer, the Guarantor or any
Subsidiary of the applicable Issuer or the Guarantor in property, located within
the United States of America or any State thereof (including property located
off the coast of the United States of America held pursuant to lease from any
Federal, State or other governmental body) which is considered by the applicable
Issuer or the Guarantor to be capable of producing oil or gas or minerals in
commercial quantities and (ii) any refinery, smelter or processing or
manufacturing plant owned or leased by the applicable Issuer, the Guarantor or
any Subsidiary of the applicable Issuer or the Guarantor and located within the
United States of America or any State thereof, except (a) facilities related
thereto employed in transportation, distribution or marketing or (b) any
refinery, smelter or processing or manufacturing plant, or portion thereof,
which the Board of Directors declares is not material to the business of the
applicable Issuer or the Guarantor and their respective subsidiaries taken as a
whole.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Security
on any Interest Payment Date means the date specified in such Security as the
Regular Record Date.
"Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to
be repaid, means the price at which it is to be repaid pursuant to such
Security.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer, trust officer, or assistant trust officer, the controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company
which owns or leases (as lessor or lessee) a Principal Property but does not
include the Subsidiary Issuers or any Subsidiary of the Company the principal
business of which is leasing machinery, equipment, vehicles or other properties
none of which is a Principal Property or financing accounts receivable, or
engaging in ownership and development of any real property which is not a
Principal Property.
"Security" or "Securities" means any note or notes, bond or
bonds, debenture or debentures, or any other evidences of indebtedness. as the
case may be, of any series authenticated and delivered from time to time under
this Indenture.
"Security Register" shall have the meaning specified in
Section 305.
"Security Registrar" means the Person who keeps the Security
Register specified in Section 305.
"Securityholder" means a Person in whose name a Security is
registered in the Security Register.
<PAGE>
7
"Special Record Date" for the payment of any Defaulted
Interest (as defined in Section 307) means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of any specified Person means any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by the specified Person or by one or more of its
Subsidiaries, or both.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at
the date as of which this instrument was executed except as provided in Section
905 and except to the extent that any subsequent amendment thereto shall
retroactively apply to this Indenture.
"Trustee" means the Person named as the Trustee in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean and include each Person who is then a Trustee hereunder. If
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Vice President" when used with respect to the applicable
Issuer, the Guarantor or the Trustee means any vice president, whether or not
designated by a number or a word or words added before or after the title "vice
president", including, without limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation,
means stock of any class or classes (however designated) having by the terms
thereof ordinary voting power to elect a majority of the members of the board of
directors (or other governmental body) of such corporation other than stock
having such power only by reason of the happening of a contingency.
Section 102. Compliance Certificates and Opinions. Upon any
application or request by the applicable Issuer or the Guarantor to the Trustee
to take any action under any provision of this Indenture, such Issuer and the
Guarantor shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such Counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for the written
statement required by Section 1004) shall include
(1) a statement that each individual signing such certificate
or opinion has read and understands such covenant or condition and the
definitions herein relating thereto;
(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 each such individual,
he has made such examination or investigation that he believes is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been compiled with; and
<PAGE>
8
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person. or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to the other matters, and any such Person may certify, or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of an Issuer or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of such
Issuer or the Guarantor stating that the information with respect to such
factual matters is in the possession of such Issuer or the Guarantor unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent. waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
applicable Issuer and the Guarantor. If any Securities are denominated in coin
or currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
Securities shall be deemed to be that amount of United States dollars that could
be obtained for such principal amount on the basis of the spot rate of exchange
into United States dollars for the currency in which such Securities are
denominated (as evidenced to the Trustee by an Officers' Certificate) as of the
date the taking of such action by the Holders of such requisite principal amount
is evidenced to the Trustee as provided in the immediately preceding sentence.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601 ) conclusive in favor of
the Trustee and the applicable Issuer and the Guarantor, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
<PAGE>
9
(d) If the applicable Issuer or the Guarantor shall solicit
from the Holders any request, demand, authorization, direction, notice. consent,
waiver or other action, such Issuer or the Guarantor may, at its option, by
Board Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other action, but such Issuer or the Guarantor shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Securities
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Securities Outstanding shall be computed as of the record date;
provided that no such authorization, agreement or consent by the Holders on the
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind the
Holder of every Security issued upon the transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the Company in reliance thereon whether or not notation of
such action is made upon such Security.
Section 105. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Securityholder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
at 101 Barclay Street, Floor 21 West, New York, New York, 10286,
attention: Corporate Trust Administration, or at any other address
previously furnished in writing by the Trustee, or
(2) an Issuer or the Guarantor by the Trustee or by any
Securityholder shall be sufficient for every purpose hereunder (except
as provided in Section 501(4) or, in the case of a request for
repayment, as specified in the Security carrying the right to
repayment) if in writing and mailed, first-class postage prepaid, to
such Issuer or the Guarantor addressed to it at the address of its
principal office specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Trustee by
the Company.
Section 106. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securityholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or otherwise, it shall be impractical to
mail notice of any event to any Securityholder when such notice is required to
be given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee, the applicable Issuer and
the Guarantor shall be deemed to be a sufficient giving of such notice.
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Section 107. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with the duties imposed by any
of Sections 310 to 317, inclusive, of the Trust Indenture Act through the
operation of Section 318(c)thereof, or with the duties imposed by any of
Sections 77 to 88, inclusive, of the Business Corporation Act (Alberta) such
imposed duties shall control.
Section 108. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns. All covenants and
agreements in this Indenture by any Issuer or the Guarantor shall bind its
successors and assigns, whether so expressed or not.
Section 110. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 111. Benefits of Indenture. Nothing in this Indenture
or in any Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 112. Governing Law. This Indenture shall be
construed in accordance with and governed by the laws of the State of New York.
Section 113. Counterparts. This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
Section 114. Judgment Currency. Each of the Issuers and the
Guarantor agrees, to the fullest extent that it may effectively do so under
applicable law, that (a) if for the purpose of obtaining judgment in any court
it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, on the Securities of any series (the "Required
Currency") into a currency in which judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in the City of New
York the Required Currency with the Judgment Currency on the New York Banking
Day (as defined below) preceding that on which final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alterative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in the City of New York or a
day on which banking institutions in the City of New York are authorized or
required by law or executive order to close.
<PAGE>
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ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with applicable laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities, subject, with respect to the Securities of any series, to the rules
of any securities exchange on which such Securities are listed.
Section 202. Forms of Securities. Each Security shall be in
one of the forms approved from time to time by or pursuant to a Board
Resolution, or established in one or more indentures supplemental hereto. Prior
to the delivery of a Security to the Trustee for authentication in any form
approved by or pursuant to a Board Resolution, the applicable Issuer shall
deliver to the Trustee the Board Resolution by or pursuant to which such form of
Security has been approved, which Board Resolution shall have attached thereto a
true and correct copy of the form of Security which has been approved thereby
or, if a Board Resolution authorizes a specific officer or officers to approve a
form of Security, a certificate of such officer or officers approving the form
of Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
applicable Issuer.
Section 203. Form of Trustee's Certificate of Authentication.
The form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
________________________________________
as Trustee,
By: _____________________________
Authorized Signatory
Dated: _______________________
<PAGE>
12
Section 204. Securities Issuable in the Form of a Global
Security. (a) If the applicable Issuer shall establish pursuant to Sections 202
and 301 that the Securities of a particular series are to be issued in whole or
in part in the form of one or more Global Securities, then the applicable Issuer
and the Guarantor shall execute and the Trustee or its agent shall, in
accordance with Section 303 and the Company Request delivered to the Trustee or
its agent thereunder, authenticate and deliver, such Global Security or
Securities, which (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, the Outstanding Securities of such
series to be represented by such Global Security or Securities, or such portion
thereof as the applicable Issuer shall specify in a Company Request, (ii) shall
be registered in the name of the Depositary for such Global Security or
Securities or its nominee, (iii) shall be delivered by the Trustee or its agent
to the Depositary or pursuant to the Depositary's instruction and (iv) shall
bear a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for the individual Securities represented hereby,
this Global Security may not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary."
(b) Notwithstanding any other provisions of this Section 204
or of Section 305, and subject to the provisions of paragraph (c) below, unless
the terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
305, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If any time the Depositary for a Global Security
notifies the applicable Issuer that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary for the
Securities for such series ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, the applicable Issuer shall appoint a successor Depositary with
respect to such Global Security. If a successor Depositary for such Global
Security is not appointed by the applicable Issuer within 90 days after the
applicable Issuer receives such notice or becomes aware of such ineligibility,
the applicable Issuer and the Guarantor will execute, and the Trustee or its
agent, upon receipt of a Company Request for the authentication and delivery of
individual Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The applicable Issuer may at any time and in its sole
discretion determine that the Securities of any series or portion thereof issued
or issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. Furthermore, if there shall
have occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
with respect to any series of Securities, the Trustee may determine that the
Securities of such series shall no longer be represented by a Global Security or
Securities. In such event the applicable Issuer and the Guarantor will execute,
and the Trustee, upon receipt of a Company Request for the authentication and
delivery of individual Securities of such series in exchange in whole or in part
for such Global Security, will authenticate and deliver individual Securities of
such series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series or portion thereof in exchange for such Global Security
or Securities.
(iii) If specified by the applicable Issuer pursuant to
Sections 202 and 301 with respect to Securities issued or issuable in the form
of a Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Securities of
such series of like tenor and terms in definitive form on such terms as are
acceptable to the applicable Issuer and such Depositary. Thereupon the
applicable Issuer and the Guarantor shall execute, and the Trustee or its agent
shall authenticate and deliver, without service charge, (1) to each
<PAGE>
13
Person specified by such Depositary a new Security or Securities of the same
series of like tenor and terms and of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and (2) to such Depositary
a new Global Security of like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities delivered to
the Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the applicable Issuer and the Guarantor will execute and the
Trustee or its agent will authenticate and deliver individual Securities in
definitive registered form in authorized denominations. Upon the exchange of the
entire principal amount of a Global Security for individual Securities, such
Global Security, shall be canceled by the Trustee or its agent. Except as
provided in the preceding paragraph, Securities issued in exchange for a Global
Security pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or the Security Registrar. The Trustee or the Security
Registrar shall deliver such Securities to the Persons in whose names such
Securities are so registered.
Section 205. Form of Notation of Guarantees. UNION PACIFIC
RESOURCES GROUP INC., a Utah corporation (the "Guarantor", which term includes
any successor thereto under the Indenture (the "Indenture") referred to in the
Security on which this notation is endorsed) has unconditionally guaranteed,
pursuant to the terms of the Guarantees contained in Article Twelve of the
Indenture, the due and punctual payment of the principal of and any premium and
interest on this Security, when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption, early repayment or otherwise, in accordance with the terms of this
Security and the Indenture.
The obligations of the Guarantor to the Holders of the
Securities and to the trustee pursuant to the Guarantees and the Indenture are
expressly set forth in Article Twelve of the Indenture, and reference is hereby
made to such Article and Indenture for the precise terms of the Guarantees.
The Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which this
notation of the Guarantees is endorsed shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized
signatories.
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in
Series; Terms of Particular Series. The aggregate principal amount of Securities
which may be authenticated and delivered and Outstanding under this Indenture is
not limited.
The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors of the applicable Issuer and the Guarantor. All
Securities of each series under this Indenture shall in all respects be equally
and ratably entitled to the benefits hereof with respect to such series without
preference, priority or distinction on account of the actual time of the
authentication and delivery or Stated Maturity of the Securities of such series.
Each series of Securities shall be created either by or
pursuant to a Board Resolution of the applicable Issuer and the Guarantor or by
or pursuant to an indenture supplemental hereto. The Securities of each such
series may bear such date or dates, be payable at such place or places, have
such Stated Maturity or Maturities, be issuable at such premium over or discount
from their face
<PAGE>
14
value, bear interest at such rate or rates (which may be fixed or floating),
from such date or dates, payable in such installments and on such dates and at
such place or places to the Holders of Securities registered as such on such
Regular Record Dates, or may bear no interest, and may be redeemable or
repayable at such Redemption Price or Prices or Repayment Price or Prices, as
the case may be, whether at the option of the Holder or otherwise, and upon such
terms, all as shall be provided for in or pursuant to the Board Resolution of
the applicable Issuer and the Guarantor or in or pursuant to the supplemental
indenture creating that series. There may also be established in or pursuant to
a Board Resolution or in or pursuant to a supplemental indenture prior to the
issuance of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that
series, at the option of the Holders thereof, for or into new
Securities of a different series or other securities or other property,
including shares of capital stock of the applicable Issuer or the
Guarantor or any subsidiary of such Issuer or the Guarantor or
securities directly or indirectly convertible into or exchangeable for
any such shares;
(2) a sinking or purchase fund or other analogous obligation;
(3) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies (including European Currency
Units) in which the Securities of such series shall be denominated and
in which payments of principal of, and any premium and interest on,
such Securities shall or may be payable;
(4) if the principal of (and premium, if any) or interest, if
any, on the Securities of such series are to be payable, at the
election of the applicable Issuer or a holder thereof, in a currency or
currencies or units based on or related to currencies (including
European Currency Units) other than that in which the Securities are
stated to be payable, the period or periods within which, and the terms
and conditions upon which, such election may be made;
(5) if the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of such series may be
determined with reference to an index based on (i) a currency or
currencies or units based on or related to currencies (including
European Currency Units) other than that in which the Securities are
stated to be payable, (ii) changes in the price of one or more other
securities or groups or indexes of securities or (iii) changes in the
prices of one or more commodities or groups or indexes of commodities,
or any combination of the foregoing, the manner in which such amounts
shall be determined;
(6) if the aggregate principal amount of the Securities of
that series is to be limited, such limitations;
(7) the exchange of Securities of that series, at the option
of the Holders thereof, for other Securities of the same series of the
same aggregate principal amount of a different authorized kind or
different authorized denomination or denominations, or both;
(8) the appointment by the Trustee of an Authenticating Agent
in one or more places other than the location of the office of the
Trustee with power to act on behalf of the Trustee and subject to its
direction in the authentication and delivery of the Securities of any
one or more series in connection with such transactions as shall be
specified in the provisions of this Indenture or in or pursuant to the
Board Resolution or the supplemental indenture creating such series;
(9) the portion of the principal amount of Securities of the
series, if other than the total principal amount thereof, which shall
be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502 or provable in bankruptcy pursuant to Section
504;
<PAGE>
15
(10) any Event of Default with respect to the Securities of
such series, if not set forth herein and any additions, deletions or
other changes to the Events of Default set forth herein that shall be
applicable to the Securities of such series (including a provision
making any Event of Default set forth herein inapplicable to the
Securities of that series);
(11) any covenant solely for the benefit of the Securities of
such series and any additions, deletions or other changes to the
provisions of Article Ten or any definitions relating to such Article
that shall be applicable to the Securities of such series (including a
provision making any Section of such Article inapplicable to the
Securities of such series);
(12) the applicability of Section 403 of this Indenture to the
Securities of such series;
(13) if the Securities of the series shall be issued in whole
or in part in the form of a Global Security or Global Securities, the
terms and conditions, if any, upon which such Global Security or Global
Securities may be exchanged in whole or in part for other individual
Securities; and the Depositary for such Global Security or Global
Securities (if other than the Depositary specified in Section 101
hereof);
(14) the subordination of the Securities of such series to any
other indebtedness of the Company, including without limitation, the
Securities of any other series; and
(15) any other terms of the series, which shall not be
inconsistent with the provisions of this Indenture,
all upon such terms as may be determined in or pursuant to a Board Resolution or
in or pursuant to a supplemental indenture with respect to such series. All
Securities of the same series shall be substantially identical in tenor and
effect, except as to denomination.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such series.
The Securities of each series shall be distinguished from the Securities of each
other series in such manner, reasonably satisfactory to the Trustee, as the
Board of Directors of the applicable Issuer may determine.
Unless otherwise provided with respect to Securities of a
particular series, the Securities of any series may only be issuable in
registered form, without coupons.
Any terms or provisions in respect of the Securities of any
series issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.
Section 302. Denominations. The Securities of each series
shall be issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
Section 303. Execution, Authentication and Delivery and
Dating. The Securities shall be executed on behalf of each of the applicable
Issuer and any Guarantees to be endorsed in the Securities shall be executed on
behalf of the Guarantor by its Chairman of the Board, its President, one of its
Vice Presidents or its Treasurer. The signature of any of these officers on the
Securities and the Guarantees, as the case may be, may be manual or facsimile.
The notation any Guarantees endorsed on the Securities shall be executed as
provided in Section 205.
Securities or Guarantees, as the case may be, bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the applicable Issuer or the Guarantor shall bind such Issuer or
Guarantor, as the case may be, notwithstanding that such
<PAGE>
16
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or Guarantees or did not hold
such offices at the date of such Securities or Guarantees.
At any time and from time to time after the execution and
delivery of this Indenture, the applicable Issuer may deliver Securities
executed by it bearing the notation of any Guarantees endorsed thereon, as
applicable, in each case executed by the Guarantor to the Trustee for
authentication; and the Trustee shall, upon Company Order, authenticate and
deliver such Securities as in this Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee
shall be entitled to receive, in addition to any Officers' Certificate and
Opinion of Counsel required to be furnished to the Trustee pursuant to Section
102, and the Board Resolution and any certificate relating to the issuance of
the series of Securities required to be furnished pursuant to Section 202, an
Opinion of Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority
hereunder for the Trustee to authenticate and deliver such Securities;
(2) the form and terms (or in connection with the issuance of
medium-term Securities under Section 311, the manner of determining the
terms) of such Securities have been established in conformity with the
provisions of this Indenture;
(3) all laws and requirements with respect to the execution
and delivery by the applicable Issuer and, if applicable, the Guarantor
of such Securities and Guarantees, if applicable, have been complied
with, each of the applicable Issuer and the Guarantor, if applicable,
has the corporate power to issue such Securities and Guarantees, if
applicable, and such Securities and Guarantees, if applicable, have
been duly authorized and delivered by the applicable Issuer and, if
applicable, the Guarantor and, assuming due authentication and delivery
by the Trustee, constitute legal, valid and binding obligations of the
applicable Issuer and, if applicable, the Guarantor, respectively,
enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws and legal principles affecting creditors'
rights generally from time to time in effect and to general equitable
principles, whether applied in an action at law or in equity) and
entitled to the benefits of this Indenture, equally and ratably with
all other Securities and Guarantees, if applicable, of such series
Outstanding;
(4) the Indenture is qualified under the Trust Indenture Act;
and
(5) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the applicable Issuer
and, if applicable, the Guarantor of the supplemental indenture with respect to
that series of Securities have been complied with, each of the applicable Issuer
and, if applicable, the Guarantor has corporate power to execute and deliver any
such supplemental indenture and has taken all necessary corporate action for
those purposes and any such supplemental indenture has been executed and
delivered and constitutes the legal, valid and binding obligation of the
applicable Issuer and, if applicable, the Guarantor enforceable in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws and legal
principles affecting creditors' rights generally from time to time in effect and
to general equitable principles, whether applied in an action at law or in
equity.
The Trustee shall not be required to authenticate such
Securities if the issue thereof will adversely affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture.
<PAGE>
17
Unless otherwise provided in the form of Security for any
series, all Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 304. Temporary Securities. Pending the preparation of
definitive Securities of any series, the applicable Issuer may execute, and the
Guarantor may execute, as applicable, the notation of any Guarantees pursuant to
Article Twelve or any Guarantees endorsed on and, upon receipt of the documents
required by Section 303, together with a Company Order, the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities or Guarantees or
notations of Guarantees may determine, as evidenced by their execution of such
Securities or Guarantees or notations, as the case may be.
If temporary Securities of any series are issued, the
applicable Issuer will cause definitive Securities of such series to be prepared
without unreasonable delay. After the preparation of definitive Securities, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the applicable Issuer in a Place of Payment,
without charge to the Holder; and upon surrender for cancelation of any one or
more temporary Securities the applicable Issuer shall execute and the Guarantor
shall execute, as applicable, the notation of any Guarantees pursuant to Article
Twelve or the Guarantees endorsed on and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
such series of authorized denominations and of like tenor and terms. Until so
exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange. Each of the
Issuers shall keep or cause to be kept a register (herein sometimes referred to
as the "Security Register") in which, subject to such reasonable regulations as
it may prescribe, such Issuer shall provide for the registration of Securities,
or of Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the applicable Issuer as provided in Section 1002.
Subject to Section 204, upon surrender for transfer of any
Security of any series at the office or agency of the applicable Issuer in a
Place of Payment, the applicable Issuer shall execute, and the Guarantor shall
execute, as applicable, the notation of any Guarantees pursuant to Article
Twelve or the Guarantees endorsed on and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities and the notation of Guarantees pursuant to Article Twelve or the
Guarantees endorsed thereon of such series of any authorized denominations, of a
like aggregate principal amount and Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder,
Securities of any series may be exchanged for other Securities of such series of
any authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and terms, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the applicable Issuer shall execute, and the Guarantor shall
execute, as applicable, the notation of any Guarantees pursuant to Article
Twelve or the Guarantees endorsed on and the Trustee shall authenticate and
deliver, the Securities and the notation of Guarantees pursuant to Article
Twelve or the Guarantees endorsed thereon which the Securityholder making the
exchange is entitled to receive.
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All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the applicable Issuer and, if
applicable, the Guarantor, evidencing the same debt, and entitled to the same
benefits under the Indenture, as the Securities surrendered upon such transfer
or exchange.
Every Security presented or surrendered for transfer or
exchange shall (if so required by the applicable Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the applicable Issuer and the Security Registrar duly executed,
by the Holder thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the applicable Issuer may (unless
otherwise provided in such Security) require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities, other than exchanges pursuant to
Section 304 or 906 not involving any transfer.
The applicable Issuer shall not be required (i) to issue,
transfer or exchange any Security of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
1103 and ending at the close of business on the date of such mailing, or (ii) to
transfer or exchange any Security so selected for redemption in whole or in
part, except for the portion of such Security not so selected for redemption.
None of the applicable Issuer, the Guarantor, the Trustee, any
agent of the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The applicable Issuer initially appoints the Trustee to act as
Security Registrar for the Securities on its behalf. The applicable Issuer may
at any time and from time to time authorize any Person to act as Security
Registrar in place of the Trustee with respect to any series of Securities
issued under this Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee, or if the
applicable Issuer, the Guarantor and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and (ii) there
is delivered to the applicable Issuer, the Guarantor and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the applicable Issuer or the Trustee that such
Security has been acquired by a bona fide purchaser, the applicable Issuer shall
execute and the Guarantor shall execute, as applicable, the notation of any
Guarantees pursuant to Article Twelve or the Guarantees endorsed thereon and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Security, a new
Security of like tenor, series, Stated Maturity and principal amount, bearing a
number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the applicable Issuer or the
Guarantor, each in its discretion may, instead of issuing a new Security, pay
such Security.
Upon the issuance of any new Security under this Section, the
applicable Issuer or the Guarantor, as the case may be, may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
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19
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security and any Guarantees thereof shall
constitute an original additional contractual obligation of the applicable
Issuer and the Guarantor, whether or not the destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other nights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder, and, except as hereinafter provided, such Defaulted Interest
may be paid by the applicable Issuer or the Guarantor, at its election in each
case, as provided in Clause (1) or Clause (2) below:
(1) The applicable Issuer or the Guarantor may elect to make
payment of any Defaulted Interest to the Persons in whose names any
such Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest which shall be fixed in the
following manner. The applicable Issuer or the Guarantor shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each such Security and the date of the proposed payment, and
at the same time such Issuer or the Guarantor shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the applicable
Issuer or the Guarantor of such Special Record Date and, in the name
and at the expense of such Issuer or the Guarantor, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to the
Holder of each such Security at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names such
Securities (or their respective Predecessor Securities) are registered
on such Special Record Date and shall no longer be payable pursuant to
the following Clause (2).
(2) The applicable Issuer or the Guarantor may make payment of
any Defaulted Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by such Issuer or the Guarantor
to the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.
If any installment of interest the Stated Maturity of which is
on or prior to the Redemption Date for any Security called for redemption
pursuant to Article Eleven is not paid or duly
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20
provided for on or prior to the Redemption Date in accordance with the foregoing
provisions of this Section, such interest shall be payable as part of the
Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners. The applicable Issuer, the
Guarantor, the Trustee and any agent of such Issuer, the Guarantor, or the
Trustee may treat the Person in whose name any Security is registered in the
Security Register as the owner of such Security for the purpose of receiving
payment of principal of (and premium, if any), and (subject to Section 307)
interest on, such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither such Issuer, the Guarantor, the Trustee
nor any agent of the such Issuer, the Guarantor or the Trustee shall be affected
by notice to the contrary.
Section 309. Cancelation. All Securities surrendered for
payment, redemption, transfer, conversion or exchange or credit against a
sinking fund shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and, if not already canceled, shall be promptly
canceled by it. Any Issuer or the Guarantor may at any time deliver to the
Trustee for cancelation any Securities previously authenticated and delivered
hereunder which such Issuer or the Guarantor may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. No Security shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. The Trustee shall dispose of all canceled Securities in
accordance with its customary procedures and shall deliver a certificate of such
disposition to the applicable Issuer or the Guarantor.
Section 310. Computation of Interest. Unless otherwise
provided as contemplated in Section 301, interest on the Securities shall be
calculated on the basis of a 360-day year of twelve 30-day months.
Solely for purposes of the Interest Act (Canada), the yearly
rate of interest to which interest calculated for a period of less than one year
on the basis of a year of 360 days consisting of 12 30-day periods is equivalent
is such rate of interest multiplied by a fraction of which (i) the numerator is
the product of (A) the actual number of days in the year commencing on the first
day of such period, multiplied by (B) the sum of (y) the product of 30
multiplied by the number of complete months elapsed in such period and (z) the
actual number of days elapsed in any incomplete month in such period; and (ii)
the denominator is the product of (a) 360 multiplied by (b) the actual number of
days in such period. The theory of "deemed reinvestment" shall not apply to the
computation of interest and no allowance, reduction or deduction shall be made
for the deemed reinvestment of interest in respect of any payments. Calculation
of interest shall be made using the nominal rate method, and not the effective
rate method, of calculation.
Section 311. Medium-term Securities. Notwithstanding any
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the applicable
Issuer or the Guarantor to deliver to the Trustee an Officers' Certificate,
Board Resolution, supplemental indenture, Opinion of Counsel or Company Request
otherwise required pursuant to Sections 202, 301 and 303 at or prior to the time
of authentication of each Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon
original issuance of the first Security of such series to be issued; provided
that any subsequent request by such Issuer or the Guarantor to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the applicable Issuer or the Guarantor that as of
the date of such request, the statements made in the Officers' Certificate
delivered pursuant to Section 102 shall be true and correct as if made on such
date.
An Officers' Certificate, supplemental indenture or Board
Resolution delivered by the applicable Issuer or the Guarantor to the Trustee in
the circumstances set forth in the preceding paragraph may provide that
Securities which are the subject thereof will be authenticated and
<PAGE>
21
delivered by the Trustee or its agent on original issue from time to time upon
the telephonic or written order of persons designated in such Officers'
Certificate, Board Resolution or supplemental indenture (any such telephonic
instructions to be confirmed promptly in writing by such persons) and that such
persons are authorized to determine, consistent with such Officers' Certificate,
supplemental indenture or Board Resolution, such terms and conditions of said
Securities as are specified in such Officers' Certificate, supplemental
indenture or Board Resolution.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to any series of
Securities (except as to any surviving rights of conversion, transfer or
exchange of Securities of such series expressly provided for herein or in the
form of Security for such series and the rights, obligations and immunities of
the Trustee), and the Trustee, on demand of and at the expense of the applicable
Issuer or the Guarantor, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series, when
(1) either
(A) all Securities of that series theretofore
authenticated and delivered (other than (i) Securities of such
series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306, and
(ii) Securities of such series for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the applicable Issuer or the Guarantor and thereafter
repaid to such Issuer or the Guarantor or discharged from such
trust, as provided in Section 1003) have been delivered to the
Trustee canceled or for cancelation; or
(B) all such Securities of that series not
theretofore delivered to the Trustee canceled or for
cancelation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
applicable Issuer or the Guarantor,
and the applicable Issuer or the Guarantor, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient without reinvestment thereof to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee canceled or for cancelation, for principal (and
premium, if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable), or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the applicable Issuer or the Guarantor has paid or caused
to be paid all other sums payable hereunder by such Issuer or the
Guarantor with respect to the Securities of such series;
(3) No Event of Default under Sections 501(5) or (6) shall
have occurred or be continuing on the date of such deposit and no
default or Event of Default under Sections 501(5) or (6) shall occur on
or before the 123rd day after the date of such deposit; and
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22
(4) the applicable Issuer or the Guarantor has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture with respect to the
Securities of such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the applicable Issuer and the
Guarantor to the Trustee with respect to that series under Section 607 shall
survive and the obligations of the Trustee under Sections 402 and 1003 shall
survive.
Section 402. Application of Trust Money. All money and
obligations deposited with the Trustee pursuant to Section 401 or Section 403
and all money received by the Trustee in respect of such obligations shall be
held in trust and applied by it, in accordance with the provisions of the series
of Securities in respect of which it was deposited and this Indenture, to the
payment, either directly or through any Paying Agent (including the applicable
Issuer or the Guarantor acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money and obligations have been
deposited with or received by the Trustee; but such money and obligations need
not be segregated from other funds except to the extent required by law.
Section 403. Satisfaction, Discharge and Defeasance of
Securities of any Series. If this Section 403 is specified, as contemplated by
Section 301, to be applicable to Securities of any series, the applicable Issuer
and the Guarantor shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of any such series at the time outstanding,
and the Trustee, at the expense of such Issuer and the Guarantor, shall execute
proper instruments acknowledging satisfaction, discharge and defeasance of such
indebtedness, when
(1) either
(A) with respect to all Securities of such series at
the time outstanding,
(i) the applicable Issuer or the Guarantor
has deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an
amount sufficient, together with any obligations
deposited pursuant to clause (ii) below, without
reinvestment thereof, to pay and discharge the entire
indebtedness on all such Securities for principal
(and premium, if any) and interest, on the days on
which such principal (and premium, if any) or
interest, as the case may be, is due and payable in
accordance with the terms of this Indenture and such
Securities, to the date of maturity or date of
redemption thereof as contemplated by the penultimate
paragraph of this Section 403, as the case may be; or
(ii) the applicable Issuer or the Guarantor
has deposited or caused to be deposited with the
Trustee as obligations in trust for such purpose such
amount of direct obligations of, or obligations the
principal of and interest on which are fully
guaranteed by, the government which issued the
currency in which such Securities are denominated
(other than such obligations as are redeemable at the
option of the issuer thereof) as will, together with
the income to accrue thereon without consideration of
any reinvestment thereof, be sufficient, in the
written opinion of a firm of nationally recognized
independent public accountants delivered to the
Trustee, together with any funds deposited pursuant
to clause (i) above, to pay and discharge the entire
indebtedness on all such Securities for principal
(and premium, if any) and interest, on the days on
which such principal (and premium, if any) or
interest, as the case may be, is due and payable in
accordance with the terms of this Indenture and such
Securities, to the date of maturity or date of
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23
redemption thereof as contemplated by the penultimate
paragraph of this Section 403, as the case may be; or
(B) the applicable Issuer or the Guarantor has
properly fulfilled such other means of satisfaction and
discharge as is specified, as contemplated by Section 301, to
be applicable to the Securities of such series;
(2) the applicable Issuer or the Guarantor has paid or caused
to be paid all other sums payable with respect to the Securities of
such series at the time Outstanding;
(3) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the applicable Issuer or the Guarantor is a party
or by which it is bound;
(4) no Event of Default or event which, after notice or lapse
of time or both, would become an Event of Default shall have occurred
and be continuing on the date of such deposit;
(5) each of the applicable Issuer and the Guarantor has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction, discharge and defeasance of the entire
indebtedness on all Securities of any such series at the time
Outstanding have been complied with;
(6) each of the applicable Issuer and the Guarantor shall have
delivered to the Trustee (A) an Opinion of Counsel to the effect that
Holders of the Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such
Issuer's or Guarantor's exercise of its option under this Section 403
and will be subject to Federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
option had not been exercised, and, in the case of Securities being
discharged, accompanied by a ruling to that effect from the Internal
Revenue Service, unless, as set forth in such Opinion of Counsel, there
has been a change in the applicable federal income tax law since the
date of this Indenture such that a ruling from the Internal Revenue
Service is no longer required and (B) an Opinion of Counsel, subject to
such qualifications, exceptions, assumptions and limitations as are
reasonably deemed necessary by such counsel and are reasonably
satisfactory to counsel for the Trustee, to the effect that the trust
resulting from the deposit referred to in paragraph (1) above does not
violate the Investment Company Act of 1940; and
(7) each of the applicable Issuer and the Guarantor shall have
delivered to the Trustee an Officers' Certificate stating that the
deposit referred to in paragraph (1) above was not made by such Issuer
or Guarantor, as applicable, with the intent of preferring the Holders
over other creditors of such Issuer or Guarantor, as applicable, or
with the intent of defeating, hindering, delaying or defrauding
creditors of such Issuer, Guarantor or others.
Any deposits with the Trustee referred to in Section 403(l)(A)
above shall be irrevocable. If any Securities of such series at the time
outstanding are to be redeemed prior to their Stated Maturity, whether pursuant
to any optional redemption provisions or in accordance with any mandatory
sinking fund requirement, the applicable Issuer and the Guarantor shall make
such arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Upon the satisfaction of the conditions set forth in this
Section 403 with respect to all the Securities of any series at the time
Outstanding, the terms and conditions of such series, including the terms and
conditions with respect thereto set forth in this Indenture (except as to any
surviving rights of conversion, transfer or exchange of Securities of such
series expressly provided for herein or in the form of Security for such series
and the rights, obligations and immunities of the
<PAGE>
24
Trustee), shall no longer be binding upon, or applicable to, the applicable
Issuer and the Guarantor, provided that neither such Issuer nor the Guarantor
shall be discharged from any payment obligations in respect of Securities of
such series which are deemed not to be Outstanding under clause (iii) of the
definition thereof if such obligations continue to be valid obligations of such
Issuer or the Guarantor under applicable law.
Notwithstanding the satisfaction of the conditions set forth
in this Section 403 with respect to all Securities of any series at the time
Outstanding, the obligations of the applicable Issuer and the Guarantor to the
Trustee with respect to that series under Section 607 and the obligations of the
Trustee with respect to that series under Section 5402 and 1003 shall survive.
If the Trustee or any Paying Agent is unable to apply in
accordance with this Section 403 any deposit by reason of such deposit being
deemed to be a preference or an asset of a bankruptcy estate of the applicable
Issuer or the Guarantor under the Federal Bankruptcy Code in connection with a
default or an Event of Default under Sections 501(5) or(6), such Issuer's and
the Guarantor's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 403
until such time, if any, as the Trustee or such Paying Agent is permitted to
apply such deposit in accordance with this Section 403; provided, however, that
if such Issuer or the Guarantor has made any payment of interest on or principal
of any of the Securities because of the reinstatement of its obligations, such
Issuer or the Guarantor shall be subrogated to the Securityholders to receive
such payment from any deposit held by the Trustee or such Paying Agent.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default", wherever
used herein, means with respect to any series of Securities 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), unless such event is either
inapplicable to a particular series or it is specifically deleted or modified in
the supplemental indenture creating such series of Securities or in the form of
Security for such series:
(1) default in the payment of any interest upon any Security
of that series 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 of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the applicable Issuer or the Guarantor in this Indenture in
respect of the Securities of such series (other than a covenant or
warranty in respect of the Securities of such series a default in the
performance of which or the breach of which is elsewhere in this
Section specifically dealt with), all of such covenants and warranties
in the Indenture which are not expressly stated to be for the benefit
of a particular series of Securities being deemed in respect of the
Securities of all series for this purpose, and continuance of such
default or breach for a period of 90 days after there has been given,
by registered or certified mail, to such Issuer or the Guarantor by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of such series, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
<PAGE>
25
(5) the entry of an order for relief against the applicable
Issuer or the Guarantor under the Federal Bankruptcy Code by a court
having jurisdiction in the premises or a decree or order by a court
having jurisdiction in the premises adjudging such Issuer or the
Guarantor a bankrupt or insolvent under any other applicable Federal or
State law, or the equivalent legislation in the jurisdiction of
incorporation or formation of such Issuer if not the United States or
the entry of a decree or order approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of such Issuer or the Guarantor under the Federal Bankruptcy
Code or any other applicable Federal or State law, or the equivalent
legislation in the jurisdiction of incorporation or formation of such
Issuer if not the United States or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of such
Issuer or the Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days, or
(6) the consent by the applicable Issuer or the Guarantor to
the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code or any other
applicable Federal or State law or the equivalent legislation in the
jurisdiction of incorporation for formation of such Issuer if not then
United States, or the consent by it to the filing of any such petition
or to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Issuer or the
Guarantor or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by such Issuer or the
Guarantor in furtherance of any such action; or
(7) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or in the
form of Security for such series.
Section 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default described in paragraph ( 1), (2), (3), (4), or
(7) (if the Event of Default under paragraph (4) or (7) is with respect to less
than all series of Securities then Outstanding) of Section 501 occurs and is
continuing with respect to any series, then and in each and every such case,
unless the principal of all the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then Outstanding
hereunder (each such series acting as a separate class), by notice in writing to
the applicable Issuer and the Guarantor (and to the Trustee if given by
Holders), may declare the principal amount (or, if the Securities of such series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all the Securities of such
series then Outstanding and all accrued interest thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Securities of
such series contained to the contrary notwithstanding. If an Event of Default
described in paragraph (4) or (7) (if the Event of Default under paragraph (4)
or (7) is with respect to all series of Securities then Outstanding), (5) or (6)
of Section 501 occurs and is continuing, then and in each and every such case,
unless the principal of all the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (treated as
one class), by notice in writing to the applicable Issuer and the Guarantor (and
to the Trustee if given by Holders), may declare the principal amount (or, if
any Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Securities
then Outstanding and all accrued interest thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Securities
contained to the contrary notwithstanding.
At any time after such a declaration of acceleration has been
made with respect to the Securities of any series and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
<PAGE>
26
amount of the Outstanding Securities of such series, by written notice to the
applicable Issuer, the Guarantor and the Trustee, may rescind and annul such
declaration and its consequences if
(1 ) the applicable Issuer or the Guarantor has paid or
deposited with the Trustee a sum sufficient to pay
(A) all overdue installments of interest on the
Securities of such series,
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise than
by such declaration of acceleration, and interest thereon at
the rate or rates prescribed therefor by the terms of the
Securities of such series, to the extent that payment of such
interest is lawful,
(C) interest upon overdue installments of interest at
the rate or rates prescribed therefor by the terms of the
Securities of such series to the extent that payment of such
interest is lawful, 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 all other amounts due the Trustee under Section
607;
and
(2) all Events of Default with respect to such series of
Securities, other than the nonpayment of the principal of the
Securities of such series which have become due solely by such
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. Each of the Issuers and the Guarantor covenants that if
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase
fund or analogous obligation when the same becomes due by the terms of
the Securities of any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the applicable Issuer or the Guarantor will, upon
demand of the Trustee, pay to it, for the benefit of the Holder of any such
Security (or the Holders of any such series in the case of Clause (3) above),
the whole amount then due and payable on any such Security (or on the Securities
of any such series in the case of Clause (3) above) for principal (and premium,
if any) and interest, with interest, to the extent that payment of such interest
shall be legally enforceable, upon the overdue principal (and premium, if any)
and upon overdue installments of interest, at such rate or rates as may be
prescribed therefor by the terms of any such Security (or of Securities of any
such series in the case of Clause (3) above); 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 and all other amounts due the
Trustee under Section 607.
If the applicable Issuer or the Guarantor fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, and may prosecute such proceeding to judgment or
final decree, and may enforce the same against such Issuer or the Guarantor or
any other
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27
obligor upon the Securities of such series and collect the money adjudged or
decreed to be payable in the manner provided by law out of the property of such
Issuer or the Guarantor or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any series of
Securities occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities of
such series 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 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any applicable Issuer or the Guarantor or any other
obligor upon the Securities or the property of the applicable Issuer or the
Guarantor or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on such Issuer or the Guarantor for the
payment of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceedings or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary and 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
all other amounts due the Trustee under Section 607 (such compensation,
expenses, disbursements and advances of the Trustee intending to
constitute expenses of administration under the Federal Bankruptcy Code
or the equivalent legislation in the jurisdiction of incorporation or
formation of such Issuer, if not the United States)) and of the
Securityholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607 (such
compensation, expenses, disbursements and advances of the Trustee intending to
constitute expenses of administration under the Federal Bankruptcy Code or the
equivalent legislation in the jurisdiction of incorporation or formation of such
Issuer, if not the United States).
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan or 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 Securityholder in
any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 agent and
counsel, be for the ratable benefit of the Holders of the Securities of the
series in respect of which such judgment has been recovered.
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28
Section 506. Application of Money Collected. Any money
collected by the Trustee with respect to a series of Securities pursuant to this
Article 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
of such series 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 607.
SECOND: To the payment of the amounts then due and unpaid upon
the Securities of that series for principal (and premium, if any) and interest,
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 principal (and premium, if any) and
interest, respectively.
THIRD: To the applicable Issuer.
Section 507. Limitation on Suits. No Holder of any Security
of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or 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 with respect to Securities of
such series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of such series 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
indemnity reasonably satisfactory to the Trustee 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
(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 of such
series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.
Section 508. Unconditional Right of Securityholders to Receive
Principal, Premium and Interest. Notwithstanding any other provisions 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 (subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies. If the
Trustee or any Securityholder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, then and in every such case the applicable Issuer, the
Guarantor, the Trustee and the Securityholders shall, subject to any
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29
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Securityholders shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the
Securityholders 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 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security 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 or by law to the Trustee
or to the Securityholders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Securityholders, as the case
may be.
Section 512. Control by Securityholders. The Holders of a
majority in principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Securities of such series, provided
that
(1) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines
that the action so directed may not lawfully be taken or would conflict
with this Indenture or if the Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed would
involve it in personal liability or be unjustly prejudicial to the
Holders not taking part in such direction, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series.
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 514. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section shall not apply to any
suit instituted by the Trustee,
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30
to any suit instituted by any Securityholder, or group of Securityholders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Securities of any series to which the suit relates, or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date).
Section 515. Waiver of Stay or Extension Laws. Each of the
Issuers and the Guarantor 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 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 each of the Issuers and the Guarantor
(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.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default with respect to any series of
Securities,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture with
respect to the Securities of such series, 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,
with respect to Securities of such series, 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; but in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any
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31
trust or power conferred upon the Trustee, under this Indenture with
respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 602. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to Securities of any series,
the Trustee shall transmit by mail to all Securityholders of such series, as
their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived: provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking or purchase fund installment or
analogous obligation with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Securityholders of such series; and
provided further, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
Section 603. Certain Rights, of Trustee. Except as otherwise
provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of any Issuer or the Guarantor
mentioned herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
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32
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of any Issuer or the Guarantor, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
certificates of authentication, shall be taken as the statements of the Issuers
and the Guarantor, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Issuers or the Guarantor of
Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Paying
Agent, the Security Registrar or any other agent of the Issuers or the
Guarantor, in its individual or an other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with each of the Issuers and the Guarantor with the same rights it would have if
it were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the applicable
Issuer or the Guarantor.
Section 607. Compensation and Reimbursement. Each of the
Issuers and the Guarantor agrees
(1) to pay to the Trustee from time to time such compensation,
as the parties shall agree from time to time, for all services rendered
by it hereunder, including extraordinary services such as default
administration (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust):
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including, the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense. disbursement or advance
as may be attributable to acts or omissions of the Trustee, if any,
relating to incurring such expenses, disbursements and advances that
are in breach of applicable standard of care imposed upon the Trustee
pursuant to this Indenture; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred unless such loss,
liability or expense was incurred in breach of applicable standard of
care imposed on the Trustee by this Indenture, arising out of or in
connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the
applicable Issuer and the Guarantor under this Section the Trustee shall have a
lien prior to the Securities upon all property and
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33
funds held or collected by the Trustee as such, except funds held in trust for
the payment of principal of (and premium, if any) or interest on particular
Securities.
Section 608. Disqualification; Conflicting Interests. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 310(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 301(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded for purposes of the
conflicting interest provisions of such Section 310 (b) the Securities of every
other series issued under this Indenture. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
Section 609. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder with respect to each series of
Securities, which shall be a corporation organized and doing business under the
laws of the United States of America or of any State, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by Federal or State
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee with respect to any series of Securities shall cease to be
eligible in accordance with the provisions of this Section or in accordance with
Section 310(a)(5) of the Trust Indenture Act, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign with respect to any series of
Securities at any time by giving written notice thereof to the applicable Issuer
and the Guarantor. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of notice of
such removal, the removed Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fall to comply with Section 310(b) of
the Trust Indenture Act pursuant to Section 608(a) with respect to any
series of Securities after written request therefor by the applicable
Issuer or the Guarantor or by any Securityholder who has been a bona
fide Holder of a Security of that series for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609
with respect to any series of Securities and shall fail to resign after
written request therefor by the applicable Issuer or the Guarantor or
by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect
to any series of Securities, or
(4) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the
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34
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the applicable Issuer or the Guarantor by a Board
Resolution may remove the Trustee, with respect to the series, or in the case of
Clause (4), with respect to all series, or (ii) subject to Section 514, any
Securityholder who has been a bona fide Holder of a Security of such series for
at least 6 months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee with respect to the series, or, in the
case of Clause (4), with respect to all series.
(e) If the Trustee shall resign, be removed or become
incapable of acting with respect to any series of Securities, or if a vacancy
shall occur in the office of the Trustee with respect to any series of
Securities for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee for that series of Securities. If, within one year
after such resignation, removal or incapacity, or the occurrence of such
vacancy, a successor Trustee with respect to such series of Securities shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the applicable Issuer and the
Guarantor and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to such series and supersede the successor Trustee appointed by
such Issuer and the Guarantor with respect to such series. If no successor
Trustee with respect to such series shall have been so appointed by such Issuer
and the Guarantor or the Securityholders of such series and accepted appointment
in the manner hereinafter provided, any Securityholder who has been a bona fide
Holder of a Security of that series for at least 6 months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(f) The applicable Issuer shall give notice of each
resignation and each removal of the Trustee with respect to any series and each
appointment of a successor Trustee with respect to any series by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities of that series as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor Trustee and the
address of its principal Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Issuers, the Guarantor and to the predecessor Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
predecessor Trustee shall become effective with respect to any series as to
which it is resigning or being removed as Trustee, and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the predecessor Trustee with respect to any
such series, but, on request of any of the Issuers, the Guarantor or the
successor Trustee, such predecessor Trustee shall, upon payment of its
reasonable charges, if any, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the predecessor
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such predecessor Trustee hereunder with respect
to all or any such series, subject nevertheless to its lien, if any, provided
for in Section 607. Upon request of any such successor Trustee, each of the
Issuers and the Guarantor shall execute any and all instruments for more fully
and certainly vesting in and confining to such successor Trustee all such
rights, powers and trusts.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series of one or
more Issuers, the applicable Issuer, the Guarantor, the predecessor Trustee and
each successor Trustee with respect to the Securities of any applicable series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not being
succeeded shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that
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35
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.
No successor Trustee with respect to any series of Securities
shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible with respect to that series
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 6.13. Preferential Collection of Claims Against
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of any
Issuer or the Guarantor within 3 months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such 3-month period and
valid as against the applicable Issuer or the Guarantor and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in paragraph (2) of this
Subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed
by or against such Issuer or the Guarantor upon the date of such
default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such
3-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the applicable Issuer or the Guarantor and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than such Issuer or the
Guarantor) who is liable thereon, and (ii) the proceeds of the bona
fide sale of any such claim by the Trustee to a third person, and (iii)
distributions made in cash, securities or other property in respect of
claims filed against such Issuer or the Guarantor in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law or equivalent
legislation in the jurisdiction of incorporation of such Issuer if not
the United States;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such 3-month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was
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36
created after the beginning of such 3-month period and such property
was received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee had no reasonable
cause to believe that a default as defined in Subsection (c) of this
Section would occur within 3 months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such 3-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaving or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
applicable Issuer or the Guarantor in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, the same percentage of their respective claims, figured
before crediting to the claim of the Trustee anything on account of the receipt
by it from such Issuer or the Guarantor of the funds and property in such
special account and before crediting to the respective claims of the Trustee and
the Securityholders and the holders of other indenture securities dividends on
claims filed against such Issuer or the Guarantor in bankruptcy or receivership
or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law or equivalent legislation in the jurisdiction of
Incorporation of such Issuer, if not the United States, but after crediting
thereon receipts on account of the indebtedness represented by their respective
claims from all sources other than from such dividends and from the funds and
property so held in such special account. As used in this paragraph, with
respect to any claim, the term "dividends" shall include any distribution with
respect to such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law or
equivalent legislation in the jurisdiction of Incorporation of such Issuer, if
not the United States, whether such distribution is made in cash, securities, or
other property but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Securityholders and
the holders of other indenture securities in accordance with the provisions of
this paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such 3-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such 3-month
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37
period. it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim.
which would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after the
beginning of such 3-month period; and
(ii) such receipt of property or reduction of claim
occurred within 3 months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any Indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within 7 days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
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38
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the applicable Issuer or the Guarantor for the purpose of
financing the purchase, processing, manufacturing, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with such Issuer or the
Guarantor arising from the making, drawing, negotiating or incurring of
the draft, bill of exchange, acceptance or obligation.
(5) The terms "Issuer" and "Guarantor" mean any obligor upon
the Securities.
Section 614. Appointment of Authenticating Agent. At any time
when any of the Securities remain Outstanding the Trustee, with the approval of
the each of the applicable Issuers and the Guarantor, may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than any of the Issuers or the Guarantor, subject to
supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and, if other than the applicable Issuer
or the Guarantor, to the applicable Issuer and the Guarantor. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and, if other than the applicable
Issuer or the Guarantor, to the applicable Issuer and the Guarantor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee, with the approval of the applicable
Issuer and the Guarantor, may appoint a successor Authenticating Agent which
shall be acceptable to such Issuer and the Guarantor and shall mail written
notice of such appointment by first-class mail, postage prepaid, to all Holders
of Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
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39
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent (other
than an Authenticating Agent appointed at the request of any of the Issuers or
the Guarantor from time to time and acceptable to the Trustee) reasonable
compensation for its services under this Section, and the Trustee shall be
entitled to be reimbursed for such payments, subject to the provisions of
Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_________________________________
as Trustee
By: ____________________________
As Authenticating Agent
By: ____________________________
Authorized Signatory
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40
ARTICLE SEVEN
Securityholders' Lists and Reports by
Trustee the Issuers and the Guarantor
Section 701. The Issuers and the Guarantor To Furnish Trustee
Names and Addresses of Securityholders. Each of the Issuers and the Guarantor
will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular
Record Date, in each year in such form as the Trustee may reasonably
require, a list of the names and addresses of the Holders of Securities
of such series as of such date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the applicable Issuer or the
Guarantor of any such request, a list of similar form and content as of
a date not more than 15 days prior to the time such list is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If three or more Holders of Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least 6 months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities, as the case may
be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to
the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
702(a), a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities of such series or all Securityholders, as
the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the
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41
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all Securityholders
of such series or all Securityholders, as the case may be, with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the each of the Issuers, the Guarantor and the Trustee that
neither the Company nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Securities in accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
Section 703. Reports by Trustee. (a) The term "reporting date"
as used in this Section means May 15 of each year. Within 60 days after the
reporting date in each year, beginning in 1999, the Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear in the Security
Register, a brief report dated as of such reporting date with respect to any of
the following events which may have occurred during the 12 months preceding the
date of such report (but if no such event has occurred within such period no
report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of Securities of any series, on
any property or funds held or collected by it as Trustee, except that
the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more than
1/2 of 1% of the principal amount of the Securities of such series
outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or by any other obligor
on the Securities) to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a
creditor relationship arising in an manner described in Section
613(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has
not previously reported;
and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of
a default, notice of which has been or is to be withheld by the Trustee
in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders,
as their names and addresses appear in the Security Register, a brief report
with respect to the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
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42
made by the Trustee (as such) since the date of the last report transmitted
pursuant to Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of any series, on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this Subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate 10% or less of
the principal amount of the Securities Outstanding of such series at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission. The
applicable Issuer will notify the Trustee when the Securities are listed on any
stock exchange.
Section 704. Reports by the Issuers and the Guarantor. Each of
the Issuers and the Guarantor will
(1) file with the Trustee, within 15 days after such Issuer
and the Guarantor is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which such Issuer and the Guarantor may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if such Issuer and the Guarantor
is not required to file information, documents or reports pursuant to
either of said Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional Information, documents and reports with
respect to compliance by such Issuer and the Guarantor with the
conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit by mail to all Securityholders, as their names
and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by such Issuer and the
Guarantor pursuant to paragraphs (1) and (2) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc. only on Certain
Terms. The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the
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43
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 of every covenant of this Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or
both, would become an Event of 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 or transfer and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Section 802. Subsidiary Issuers May Consolidate, etc. only on
Certain Terms. Each of the Subsidiary Issuers shall not consolidate or
amalgamate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:
(1) the corporation formed by such consolidation or
amalgamation or into which such Subsidiary Issuer is merged or the
Person which acquires by conveyance or transfer the properties and
assets of such Subsidiary Issuer substantially as an entirety shall be
a corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia or of Canada
or any province or territory thereof, 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 of every covenant of this Indenture on
the part of such Subsidiary Issuer to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) such Subsidiary Issuer has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, amalgamation, merger, conveyance or transfer and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
Section 803. Successor Corporation Substituted. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of an Issuer or the Guarantor substantially as an entirety
in accordance with Section 801 or Section 802, the successor corporation formed
by such consolidation or amalgamation or into which such Issuer or the Guarantor
is merged or to which such conveyance or transfer is made shall succeed to, and
be substituted for, and may exercise every right and power of, such Issuer or
the Guarantor under this Indenture with the same effect as if such successor
corporation had been named as such Issuer or the Guarantor herein. In the event
of any such conveyance or transfer, such Issuer or the Guarantor as the
predecessor corporation may be dissolved, wound up or liquidated at any time
thereafter.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, any
Issuer and the Guarantor, when authorized by a
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44
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to such
Issuer or the Guarantor, and the assumption by any such successor of
the covenants of such Issuer or the Guarantor herein and in the
Securities contained; or
(2) to add to the covenants of such Issuer or the Guarantor,
or to surrender any right or power herein conferred upon such Issuer or
the Guarantor, for the benefit of the Holders of the Securities of any
or all series (and if such covenants or the surrender of such right or
power are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included or such
surrenders are expressly being made solely for the benefit of one or
more specified series); or
(3) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; or
(4) to add to this Indenture such provisions as may be
expressly permitted by the TIA, excluding, however, the provisions
referred to in Section 316(a)(2) of the TIA as in effect at the date as
of which this instrument was executed or any corresponding provision
similar federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article
Two, and to provide for the issuance of any series of Securities as
provided in Article Three and to set forth the terms thereof, and/or to
add to the rights of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment
by another corporation as a successor Trustee hereunder with respect to
one or more series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to Section 611; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of
Default are to be in respect of less than all series of Securities,
stating that such Events of Default are expressly being included solely
for the benefit of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as
well as fully registered form.
No supplemental indenture for the purposes identified in
Clauses (2), (3), (5) or (7) above may be entered into if to do so would
adversely affect the interest of the Holders of Securities of any series.
Section 902. Supplemental Indentures with Consent of
Securityholders. With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
applicable Issuer, the Guarantor and the Trustee, the applicable Issuer and the
Guarantor, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series under this Indenture; provided, however, that no
such
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supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Maturity of the principal of, or the Stated
Maturity of any premium on, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest or any
premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any Place
of Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity or the Stated Maturity, as the case may be, thereof (or, in
the case of redemption or repayment, on or after the Redemption Date or
the Repayment Date, as the case may be); or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences, provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section 513
or Section 1008, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not (except to the
extent required in the case of a supplemental indenture entered into under
Section 901(4) or 901(6) in which case such supplemental indenture shall not
adversely affect the Trustee's own rights, duties or immunities without the
consent of the Trustee) be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes, and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
Section 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the TIA as then in effect.
Section 906. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the applicable Issuer and the
Guarantor shall
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46
so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by such Issuer and the Guarantor and authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. With
respect to each series of Securities, each of the Issuers will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture, and will duly
comply with all the other terms, agreements and conditions contained in, or made
in the Indenture for the benefit of, the Securities of such series.
Section 1002. Maintenance of Office or Agency. Each of the
Issuers will maintain an office or agency in each Place of Payment where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for transfer or exchange and where notices and demands to or upon
such Issuer in respect of the Securities and this Indenture may be served. Each
applicable Issuer will give prompt written notice to the Trustee of the
location, and of any change in the location, of such office or agency. If at any
time any Issuer shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the principal Corporate Trust
Office of the Trustee, and each of the Issuers hereby appoints the Trustee its
agent to receive all such presentations, surrenders, notices and demands.
The Guarantor will maintain an office or agency in each Place
of Payment where Securities to which the Guarantees apply where such Securities
may be presented or surrendered for payment pursuant to the Guarantees and where
notice and demands to or upon the Guarantor in respect of the Guarantees and
this Indenture may be served. The Guarantor will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Guarantor shall fail to maintain any such office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders and demands may be made or served at the Principal
Corporate Trust Office of the Trustee, and the Guarantor hereby appoints the
Trustee as its agent to receive all such presentations, surrenders and demands.
Section 1003. Money for Security Payments to be Held in Trust.
If any of the Issuers or the Guarantor shall at any time act as its own Paying
Agent for any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on, any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
Whenever the Issuers or the Guarantor shall have one or more
Paying Agents for any series of Securities, it will, on or prior to each due
date of the principal of (and premium, if any) or interest on, any Securities of
such series, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal (and premium, if any)
or interest, and (unless such Paying Agent is the Trustee) the applicable Issuer
will promptly notify the Trustee of its action or failure so to act.
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47
The applicable Issuer will cause each Paying Agent other than
the Trustee for any series of Securities to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on Securities of such series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the applicable
Issuer (or any other obligor upon the Securities of such series) in the
making of any such payment of principal (and premium, if any) or
interest on the Securities of such series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
Any of the Issuers may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture with respect to any
series of Securities or for any other purpose, pay, or by Company Order direct
any Paying Agent to pay, to the Trustee all sums held in trust by any of the
Issuers or such Paying Agent in respect of each and every series of Securities
as to which it seeks to discharge this Indenture or, if for any other purpose,
all sums so held in trust by any of the Issuers in respect of all Securities,
such sums to be held by the Trustee upon the same trusts as those upon which
such sums were held by any of the Issuers or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the any of the Issuers or the Guarantor, in trust for the payment
of the principal of (and premium, if any) or interest on any Security of any
series and remaining unclaimed for two years after such principal (and premium,
if any) or interest has become due and payable shall be paid to such Issuer or
the Guarantor on Company Request, or (if then held by such Issuer or the
Guarantor) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to such Issuer or
the Guarantor for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of such Issuer
or the Guarantor as trustee thereof, shall thereupon cease. The Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the applicable Issuer or the Guarantor mail to the Holders of the
Securities as to which the money to be repaid was held in trust, as their names
and addresses appear in the Security Register, a notice that such moneys remain
unclaimed and that, after a date specified in the notice, which shall not be
less than 30 days from the date on which the notice was first mailed to the
Holders of the Securities as to which the money to be repaid was held in trust,
any unclaimed balance of such moneys then remaining will be paid to such Issuer
or the Guarantor free of the trust formerly impressed upon it.
Each of the Issuers and the Guarantor initially authorizes the
Trustee to act as Paying Agent for the Securities on its behalf. Any Issuer or
the Guarantor may at any time and from time to time authorize one or more
Persons to act as Paying Agent in addition to or in place of the Trustee with
respect to any series of Securities issued under this Indenture.
Section 1004. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written statement signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating that
(1) a review of the activities of the Company and the
Subsidiary Issuers during such year and of each of the Company's and
the Subsidiary Issuers' performance under this Indenture and under the
terms of the Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, each
of the Company and the Subsidiary Issuers has complied with all
conditions and covenants under this Indenture
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48
through such year, or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to him and
the nature and status thereof.
Section 1005. Corporate Existence. Subject to Article Eight
each of the Issuers and the Guarantors will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
Section 1006. Limitation on Liens and Sale Leaseback
Transactions. (a) So long as any of the Securities of any of the Issuers shall
be Outstanding, the Company will not, nor will it permit any Subsidiary to,
create, assume, incur or suffer to exist any Mortgage upon any stock or
Indebtedness, whether owned on the date of this Indenture or hereafter acquired,
of any Domestic Subsidiary, to secure any Debt of the Company or any other
Person (other than the Securities), without in any such case making effective
provision whereby all of the Securities Outstanding shall be directly secured
equally and ratably with such Debt, excluding, however, from the operation of
the foregoing provisions of this Subsection (a) any Mortgage upon stock or
indebtedness of any corporation existing at the time such corporation becomes a
Domestic Subsidiary, or existing upon stock or indebtedness of a Domestic
Subsidiary at the time of acquisition of such stock or indebtedness, and any
extension, renewal or replacement (or successive extensions, renewals or
replacements) in whole or in part of any such Mortgage; provided, however that
the principal amount of Debt secured thereby shall not exceed the principal
amount of Debt so secured at the time of such extension, renewal or replacement;
and provided further, that such Mortgage shall be limited to all or such part of
the stock or indebtedness which secured the Mortgage so extended, renewed or
replaced.
(b) So long as any of the Securities of any of the Issuers
shall be Outstanding, the Company will not, nor will it permit any Restricted
Subsidiary to, create, assume, incur or suffer to exist any Mortgage upon any
Principal Property, whether owned or leased on the date of this Indenture or
hereafter acquired, to secure any Debt of the Company or any other Person (other
than the Securities), without in any such case making effective provision
whereby all of the Securities outstanding shall be directly secured equally and
ratably with such Debt, excluding, however, from the operation of the foregoing
provisions of this Subsection (b):
(i) any Mortgage upon property owned or leased by any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(ii) any Mortgage upon property existing at the time of
acquisition thereof or to secure the payment of all or any part of the
purchase price thereof or to secure any Debt incurred prior to, at the
time of or within 180 days after the acquisition of such property for
the purpose of financing all or any part of the purchase price thereof;
(iii) any Mortgage upon property to secure all or any part of
the cost of exploration, drilling, development, construction,
alteration, repair or improvement of all or any part of such property,
or Debt incurred prior to, at the time of or within 180 days after the
completion of such exploration, drilling, development, construction,
alteration, repair or improvement for the purpose of financing all or
any part of such cost;
(iv) any Mortgage securing Debt of a Restricted Subsidiary
owing to the Company or to another Restricted Subsidiary;
(v) any Mortgage existing at the date of this Indenture; and
(vi) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any
Mortgage referred to in the foregoing clauses (i) to (v), inclusive;
provided, however, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of
such extension, renewal or replacement; and provided further, that such
Mortgage shall be limited to all or such part of
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49
the property which secured the Mortgage so extended, renewed or
replaced (plus improvements on such property).
Notwithstanding the foregoing provisions of this Subsection (b), the Company
may, and may permit any Restricted Subsidiary to create, assume, incur or suffer
to exist any Mortgage upon any Principal Property which is not excepted by
clauses (i) through (vi) above without equally and ratably securing the
Securities, provided that the aggregate amount of all Debt then outstanding
secured by such Mortgage and all similar Mortgages does not exceed 10% of the
total consolidated stockholders' equity of the Company as shown on the audited
consolidated balance sheet contained in the latest annual report to stockholders
of the Company. For the purpose of this Subsection (b), the following types of
transactions shall not be deemed to create a Mortgage to secure any Debt:
(i) the sale or other transfer of (A) any oil or gas or
minerals in place for a period of time until, or in an amount such
that, the purchaser will realize therefrom a specified amount of money
(however determined) or a specified amount of such oil or gas or
minerals, or (B) any other interest in property of the character
commonly referred to as a "production payment"; and
(ii) any Mortgage in favor of the United States of America or
any State thereof, or any other country, or any political subdivision
of any of the foregoing, to secure partial, progress, advance or other
payments pursuant to the provisions of any contract or statute, or any
Mortgage upon property of the Company or a Restricted Subsidiary
intended to be used primarily for the purpose of or in connection with
air or water pollution control, provided that no such Mortgage shall
extend to any other property of the Company or any Restricted
Subsidiary.
(c) So long as any of the Securities of any of the Issuers
shall be Outstanding, the Company will not, nor will it permit any Restricted
Subsidiary to, enter into any arrangement with any Person providing for the
leasing by the Company or a Restricted Subsidiary as lessee of any Principal
Property (except for temporary leases for a term, including renewals, of not
more than five years), which property has been or is to be sold or transferred
by the Company or such Restricted Subsidiary to such Person (herein referred to
as a "Sale-Leaseback Transaction"), unless (i) such Sale- Leaseback Transaction
occurs within 120 days from the date of acquisition of such Principal Property
or the date of the completion of construction or commencement of full operations
on such Principal Property, whichever is later, or (ii) the Company, within 120
days after such Sale-Leaseback Transaction, applies or causes to be applied to
the retirement of Funded Debt of the Company or any Subsidiary (other than
Funded Debt of the Company which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the
Securities) an amount not less than the net proceeds of the sale of such
Principal Property.
Notwithstanding the foregoing provisions of this paragraph
(c), the Company may, and may permit any Restricted Subsidiary to, effect any
Sale-Leaseback Transaction involving any Principal Property, provided that the
net sale proceeds from such Sale-Leaseback Transaction, together with all Debt
secured by Mortgages not specifically excluded pursuant to clauses (i) through
(vi) of paragraph (b) of this Section 1006 from the operation of such paragraph
(b), does not exceed 10% of the total consolidated stockholders' equity of the
Company as shown on the audited consolidated balance sheet contained in the
latest annual report to stockholders of the Company.
Section 1007. Limitation on Transfers of Principal Properties
to Unrestricted Subsidiaries. So long as any of the Securities of any of the
Issuers shall be Outstanding, the Company will not, nor will it permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose of any Principal
Property to any Unrestricted Subsidiary other than for cash or other
consideration which, in the opinion of the Board of Directors of the Company,
constitutes fair value for such Principal Property.
Section 1008. Waiver of Certain Covenants. Any of the Issuers
and the Guarantor may omit in respect of any series of Securities, in any
particular instance, to comply with any
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50
covenant or condition set forth in Sections 1006 and 1007, if before or after
the time for such compliance the Holders of at least a majority in principal
amount of the Securities at the time Outstanding of such series shall, by Act of
such Securityholders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. Any of the Issuers may
reserve the right to redeem and pay before Stated Maturity all or any part of
the Securities of any series, either by optional redemption, sinking or purchase
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 202 and on
such terms as are specified in such form or in the Board Resolution or indenture
supplemental hereto with respect to Securities of such series as provided in
Section 301. Redemption of Securities of any series shall be made in accordance
with the terms of such Securities and, to the extent that this Article does not
conflict with such terms, the succeeding Sections of this Article.
Section 1102. Election to Redeem; Notice to Trustee. The
election of an Issuer to redeem any Securities redeemable at the election of
such Issuer shall be evidenced by, or made pursuant to authority granted by, a
Board Resolution. In case of any redemption at the election of an Issuer of any
Securities of any series, such Issuer shall, at least 60 days prior to the
Redemption Date fixed by such Issuer (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed. No optional
redemption (other than in whole) of any series of Securities shall be made so
long as any Event of Default or any event which, after notice or lapse of time
or both, shall be an Event of Default shall have occurred and be continuing with
respect to such series of Securities.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of an
Issuer which is subject to a condition specified in the terms of such
Securities, such Issuer shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
Section 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of like tenor and terms of any series
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date pro rata, by lot or by the
Trustee, from the Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may include provision for the selection for redemption of portions of
the principal of Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of that series. Unless otherwise
provided in the terms of a particular series of Securities, the portions of the
principal of Securities so selected for partial redemption shall be equal to the
minimum authorized denomination of the Securities of such series, or an integral
multiple thereof, and the principal amount which remains outstanding shall not
be less than the minimum authorized denomination for Securities of such series.
If less than all the Securities of unlike tenor and terms of a series are to be
redeemed, the particular Securities to be redeemed shall be selected by the
applicable Issuer.
The Trustee shall promptly notify the applicable Issuer in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed.
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For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal of such Security which has been or is to
be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall
be given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the Securities to be
redeemed, from the Holder to whom the notice is given;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest, if
any, thereon shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for
payment of the Redemption Price, which shall be the office or agency of
the applicable Issuer in the Place of Payment; and
(6) that the redemption is on account of a sinking or purchase
fund, or other analogous obligation, if that be the case.
Notice of redemption of Securities to be redeemed at the
election of an Issuer shall be given by such Issuer or, at such Issuer's
request, by the Trustee in the name and at the expense of such Issuer.
Section 1105. Deposit of Redemption Price. Prior to 10:00a.m.
on any Redemption Date, the applicable Issuer shall deposit with the Trustee or
with a Paying Agent (or, if such Issuer is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money in
immediately available funds sufficient to pay the Redemption Price of all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date. Notice of
Redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified and from and after such date (unless the applicable Issuer
shall default in the payment of the Redemption Price) such Securities shall
cease to bear interest. Upon surrender of such Securities for redemption in
accordance with the notice, such Securities shall be paid by the applicable
Issuer at the Redemption Price. Installments of interest the Stated Maturity of
which is on or prior to the Redemption Date shall be payable to the Holders of
such Securities registered as such on the relevant Regular Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
Section 1107. Securities Redeemed in Part. Any Security which
is to be redeemed only in part shall be surrendered at the office or agency of
the applicable Issuer in the Place of Payment with respect to that series (with,
if the applicable Issuer or the Trustee so requires, due
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52
endorsement by, a written instrument of transfer in form satisfactory to the
applicable Issuer and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing) and the applicable Issuer shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and
Stated Maturity and of like tenor and terms, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
Section 1108. Provisions with Respect to any Sinking Funds.
Unless the form or terms of any series of Securities shall provide otherwise, in
lieu of making all or any part of any mandatory sinking fund payment with
respect to such series of Securities in cash, the applicable Issuer may at its
option (1) deliver to the Trustee for cancelation any Securities of such series
theretofore acquired by such Issuer, or (2) receive credit for any Securities of
such series (not previously so credited) acquired by such Issuer and theretofore
delivered to the Trustee for cancelation or redeemed by such Issuer other than
through the mandatory sinking fund, and if it does so then (i) Securities so
delivered or credited shall be credited at the applicable sinking fund
Redemption Price with respect to Securities of such series, and (ii) on or
before the 60th day next preceding each sinking fund Redemption Date with
respect to such series of Securities, such Issuer will deliver to the Trustee
(A) an Officers' Certificate specifying the portions of such sinking fund
payment to be satisfied by payment of cash and by delivery or credit of
Securities of such series acquired by such Issuer or so redeemed, and (B) such
Securities so acquired, to the extent not previously surrendered. Such Officers'
Certificate shall also state the basis for such credit and that the Securities
for which such Issuer elects to receive credit have not been previously so
credited and were not redeemed by such Issuer through operation of the mandatory
sinking fund, if any, provided with respect to such Securities and shall also
state that no Event of Default with respect to Securities of such series has
occurred and is continuing. All Securities so delivered to the Trustee shall be
canceled by the Trustee and no Securities shall be authenticated in lieu
thereof.
If the sinking fund payment or payments (mandatory or
optional) with respect to any series of Securities made in cash plus any unused
balance of any preceding sinking fund payments with respect to Securities of
such series made in cash shall exceed $50,000 (or a lesser sum if the applicable
Issuer shall so request), unless otherwise provided by the terms of such series
of Securities, that cash shall be applied by the Trustee on the sinking fund
Redemption Date with respect to Securities of such series next following the
date of such payment to the redemption of Securities of such series at the
applicable sinking fund Redemption Price with respect to Securities of such
series, together with accrued interest, if any, to the date fixed for
redemption, with the effect provided in Section 1106. The Trustee shall select,
in the manner provided in Section 1103, for redemption on such sinking fund
Redemption Date a sufficient principal amount of Securities of such series to
utilize that cash and shall thereupon cause notice of redemption of the
Securities of such series for the sinking fund to be given in the manner
provided in Section 1104 (and with the effect provided in Section 1106) for the
redemption of Securities in part at the option of the applicable Issuer. Any
sinking fund moneys not so applied or allocated by the Trustee to the redemption
of Securities of such series shall be added to the next cash sinking fund
payment with respect to Securities of such series received by the Trustee and,
together with such payment, shall be applied in accordance with the provisions
of this Section 1108. Any and all sinking fund moneys with respect to Securities
of any series held by the Trustee at the Maturity of Securities of such series,
and not held for the payment or redemption of particular Securities of such
series, shall be applied by the Trustee, together with other moneys, if
necessary, to be deposited sufficient for the purpose, to the payment of the
principal of the Securities of such series at Maturity.
On or before each sinking fund Redemption Date provided with
respect to Securities of any series, the applicable Issuer shall pay to the
Trustee in cash a sum equal to all accrued interest, if any, to the date fixed
for redemption on Securities to be redeemed on such sinking fund Redemption Date
pursuant to this Section 1108.
<PAGE>
53
ARTICLE TWELVE
Guarantees of Securities of Subsidiary Issuers
Section 1201. Guarantees. This Section 1201 and Section 1202
apply to the Securities of any series of any Subsidiary Issuer to the extent
that the form of the Guarantees to be endorsed on such Securities is not
otherwise established as contemplated by Section 3.01.
The Guarantor hereby fully and unconditionally guarantees to
each Holder of a Security of each series issued by a Subsidiary Issuer,
authenticated and delivered by the Trustee the due and punctual payment of the
principal (including any amount due in respect of any Original Issue Discount
Security) of and any premium and interest on such Security, and the due and
punctual payment of any sinking fund payments provided for pursuant to the terms
of such Security, when and as the same shall become due and payable, whether at
the Stated Maturity, by declaration of acceleration, call for redemption, early
repayment or otherwise, in accordance with the terms of such Security and this
Indenture. The Guarantor hereby agrees that in the event of an Event of Default
its obligations hereunder shall be as if it were a principal debtor and not
merely a surety, and shall be absolute and unconditional, irrespective of, and
shall be unaffected by, any invalidity, irregularity or unenforceability of any
Security of any series or this Indenture, any failure to enforce the provisions
of any Security of any series or this Indenture, any waiver, modification or
indulgence granted to the applicable Subsidiary Issuer with respect thereto, by
the Holder of any Security of any series of such Subsidiary Issuer or the
Trustee, or any other circumstances which may otherwise constitute a legal or
equitable discharge of a surety or Guarantor; provided, however, that,
notwithstanding the foregoing, no such waiver, modification or indulgence shall,
without the consent of the Guarantor, increase the principal amount of any
Security of a Subsidiary Issuer or the Interest rate thereon or increase any
premium payable upon redemption thereof. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the applicable Subsidiary Issuer, any right to require a
proceeding first against such Subsidiary Issuer, the benefit of discussion,
protest or notice with respect to any Security of such Subsidiary Issuer or the
indebtedness evidenced thereby or with respect to any sinking fund payment
required pursuant to the terms of such Security issued under this Indenture and
all demands whatsoever, and covenants that this Guarantee will not be discharged
with respect to such Security except by payment in full of the principal thereof
and any premium and interest thereon or as provided in Article Four or Section
801. If any Holder or the Trustee is required by any court or otherwise to
return to any Subsidiary Issuer, the Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to such Issuer or the
Guarantor any amount paid by such Issuer or the Guarantor to the Trustee or such
Holder, this Guarantee to the extent theretofore discharged, shall be reinstated
in full force and effect. The Guarantor further agrees that, as between the
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
the Maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Five hereof for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby.
The Guarantor also agrees, to pay any and all reasonable costs
and expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holders in enforcing any rights under this Guarantee.
The Guarantee hereby waives any right of set-off which the
Guarantor may have against the Holder of any Security of a Subsidiary Issuer in
respect of any amounts which are or may become payable by such Holder to such
Subsidiary Issuer.
The Guarantor shall be subrogated to all rights of the Holders
of any series of Securities and the Trustee against the applicable Subsidiary
Issuer in respect of any amounts paid to such Holders and the Trustee by the
Guarantor pursuant to the provisions of the Guarantees; provided, however, that
the Guarantor shall not be entitled to enforce or to receive any payments
arising out of or based upon, such right of subrogation until the principal of,
premium, if any, and interest, if any, on all of the Securities of such series
shall have been paid in full.
<PAGE>
54
No past, present or future stockholder, officer, director,
employee or incorporator of the Guarantor shall have any personal liability
under the Guarantees set forth in this Section 1201 by reason of his or its
status as such stockholder, officer, director, employee or incorporator.
The Guarantees set forth in this Section 1201 shall not be
valid or become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.
Section 1202. Execution of Guarantees. To evidence its
Guarantee to the Holders specified in Section 1201, the Guarantor hereby agrees
to execute the notation of the Guarantee in substantially the form set forth in
Section 205 to be endorsed on each Security of each Subsidiary Issuer
authenticated and delivered by the Trustee. The Guarantor hereby agrees that its
Guarantee set forth in Section 1201 shall remain in full force and effect
notwithstanding any failure to endorse on each Security of each Subsidiary.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
UNION PACIFIC RESOURCES GROUP INC.,
by
_____________________________
Name:
Title:
UNION PACIFIC RESOURCES INC,
by
_____________________________
Name:
Title:
UPR CAPITAL COMPANY,
by
_____________________________
Name:
Title:
THE BANK OF NEW YORK,
by
_____________________________
Name:
Title:
<PAGE>
Exhibit 5.1
[UNION PACIFIC RESOURCES LETTERHEAD]
August 25, 1998
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
RE: Union Pacific Resources Group Inc.
UPRG Capital Trust I
UPRG Capital Trust II
UPRG Capital Trust III
Union Pacific Resources Inc.
UPR Capital Company
Registration Statement on Form S-3
Dear Sirs:
I am the Managing Senior Counsel of Union Pacific Resources Group
Inc., a Utah corporation (the "Company"), and am rendering this opinion in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") of the Company, Union Pacific Resources Inc., an Alberta
corporation and indirect wholly owned subsidiary of the Company ("UPRI"), UPC
Capital Company, a Nova Scotia unlimited liability company and indirect wholly
owned subsidiary of the Company ("UPRCC" and together with UPRI, the
"Subsidiary Issuers") and UPRG Capital Trust I, UPRG Capital Trust II and UPRG
Capital Trust III, each a Delaware statutory business trust (collectively, the
"UPRG Trusts") being filed today with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to (a) the following Securities of the Company: (i) unsecured senior
debt securities (the "Company Senior Debt Securities"), (ii) unsecured
subordinated debt securities (the "Company Subordinated Debt Securities" and,
together with the Company Senior Debt Securities, the "Company Debt
Securities"), (iii) warrants to purchase Company Senior Debt Securities (the
"Debt Warrants"), (iv) shares of preferred stock, without par value, of the
Company (the "Preferred Stock"), (v) warrants to purchase shares of Preferred
Stock (the "Preferred Stock Warrants"), (vi) shares of common stock, without
par value, of the Company (the "Common Stock"), (vii) warrants to purchase
shares of Common Stock (the "Common Stock Warrants"), (viii) stock purchase
contracts ("Stock Purchase Contracts") to purchase shares of Common Stock or
Preferred Stock, (ix) stock purchase units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and Debt Securities (as
defined below), debt obligations of the United States of America or agencies
or instrumentalities thereof or Trust Preferred Securities (as defined below),
securing the holder's obligation to purchase shares of Common Stock or
Preferred Stock under the Stock Purchase Contract, in amounts, at prices and
on terms to be determined by market conditions at the time of offering; and
(x) guarantees of the Subsidiary Debt Securities (as defined below) (the
"Company Guarantees") and the Trust Preferred Securities; (b) the following
securities of the Subsidiary Issuers: (i) non-convertible unsecured senior
debt securities (the "Subsidiary Senior Debt Securities", together with the
Company Senior Debt Securities, the "Senior Debt Securities") and (ii)
non-convertible unsecured subordinated debt securities (the "Subsidiary
Subordinated Debt Securities" and, together with the Subsidiary Senior Debt
Securities, the "Subsidiary Debt Securities"; the Subsidiary Debt Securities,
together with the Company Debt Securities, the "Debt Securities") and (c) the
following securities of the UPRG Trusts: (i) preferred securities (the "Trust
Preferred Securities"), each of such securities listed under clauses (a), (b)
and (c) are for issuance from time to time pursuant to Rule 415 under the
Securities Act. The Debt Warrants, Preferred Stock Warrants and Common Stock
Warrants are referred to herein collectively as the "Warrants".
I have examined (i) the form of the Indenture (the "Senior Indenture")
between the Company, the Subsidiary Issuers and The Bank of New York, as trustee
(the "Senior Trustee"), pursuant to which the Senior Debt Securities will be
issued, and (ii) I have examined such other documents and made such other
investigations as I have deemed necessary or advisable for purposes of this
opinion. Based thereon, I am of the opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Utah.
<PAGE>
2. Each of the Subsidiary Issuers is a corporation or unlimited
liability company, as applicable, duly formed and validly
existing under the laws of the jurisdiction of its
formation.
3. The execution and delivery of the Senior Indenture by the
Company and each Subsidiary Issuer and the issuance and sale
of Senior Debt Securities have been validly authorized by
all necessary corporate action by the Company and each
Subsidiary Issuer, as applicable.
4. When (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or
securities laws of certain states shall have been complied
with, (iii) the Senior Indenture shall have been executed and
delivered by the Company, the Subsidiary Issuers and the
Senior Trustee and duly qualified under the Trust Indenture
Act of 1939, as amended, and (iv) the Senior Debt Securities
shall have been duly authorized, executed, authenticated and
delivered against payment therefor or upon exercise of
Warrants, and the Company shall have received any additional
consideration which is payable upon such exercise, the Senior
Debt Securities and the Company Guarantees shall each
constitute binding obligations of the Company and the
Subsidiary Issuers, as applicable, enforceable in accordance
with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws relating
to or affecting creditors' rights generally and subject to
general principles of equity.
5. When (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or
securities laws of certain states shall have been complied
with, and (iii) the Preferred Stock shall have been (A)
authorized, issued and sold as contemplated by the
Registration Statement and the Company shall have received
consideration therefor or (B) issued upon exercise of
Warrants, the Preferred Stock will be validly issued, fully
paid and non-assessable.
6. When (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or
securities laws of certain states shall have been complied
with, and (iii) the Common Stock shall have been (A)
authorized, issued and sold as contemplated by the
Registration Statement and the Company shall have received
consideration therefor or (B) issued upon exercise of
Warrants, the Common Stock will be validly issued, fully paid
and non-assessable.
7. When (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or
securities laws of certain states shall have been complied
with, (iii) a warrant agreement or agreements shall have been
authorized, executed and delivered by the Company and a
warrant agent, and (iv) the Warrants shall have been duly
executed and delivered against payment therefor, the Warrants
shall be legally issued.
8. When (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or
securities laws of certain states shall have been complied
with, (iii) a Stock Purchase Contract or Stock Purchase Unit
shall have been authorized and executed and delivered in
accordance with the Term 5 thereof and (iv) the Stock
Purchasers Contracts or Stock Purchase Units, as applicable,
shall have been delivered against payment therefor, the Stock
Purchase Contracts or Stock Purchase Units, as applicable,
shall be legally issued.
This opinion is limited to laws of the State of New York, the corporate
laws of the States of Utah and Delaware, and applicable Federal laws of the
United States; provided that, as to matters of the law of the Provinces of
Alberta and Nova Scotia and federal laws of Canada, I have relied exclusively
upon opinions attached hereto.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. I also consent to the use of my name under the caption
"Legal Opinions" in the Prospectus contained in the Registration Statement.
Very truly yours,
/s/ Mark L. Jones
Mark L. Jones
<PAGE>
Exhibit 5.2
[BENNETT JONES VERCHERE LETTERHEAD]
August 25, 1998
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
RE: Union Pacific Resources Group Inc.
UPRG Capital Trust I
UPRG Capital Trust II
UPRG Capital Trust III
Union Pacific Resources Inc.
UPR Capital Company
Registration Statement on Form S-3
Dear Sirs:
We are counsel for Union Pacific Resources Inc., an Alberta
corporation (the "Company"), and are rendering this opinion in connection with
the Registration Statement on Form S-3 (the "Registration Statement") of the
Company, Union Pacific Resources Group Inc., a Utah corporation and beneficial
owner of all of the stock of the Company ("UPRG"), UPC Capital Company, a Nova
Scotia unlimited liability company and affiliate of the Company ("UPCC" and
together with the Company, the "Subsidiary Issuers") and UPRG Capital Trust I,
UPRG Capital Trust II and UPRG Capital Trust III, each a Delaware statutory
business trust (collectively, the "UPRG Trusts") being filed today with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the following securities of
the Company: (i) non-convertible unsecured senior debt securities (the "Senior
Debt Securities")and (ii) non-convertible unsecured subordinated debt
securities (the "Subordinated Debt Securities", and together with the Senior
Debt Securities, the "Debt Securities").
We have examined (i) the form of the Indenture (the "Senior
Indenture") between UPRG, the Subsidiary Issuers and The Bank of New
York, as trustee (the "Senior Trustee"), pursuant to which the Senior Debt
Securities will be issued, and (ii) we have examined such other documents and
made such other investigations as we have deemed necessary or advisable for
purposes of this opinion. As to various questions of fact material to such
opinions and which were not independently established, we have relied upon
certificates of public officials and officers of the Company, copies of which
have been delivered to you today, and on the minute books of the Company. In
such examinations, we have assumed: (i) the genuineness of all signatures; (ii)
the authenticity of all documents submitted to us as originals; (iii) the
conformity to authentic originals of all documents submitted to us as certified,
notarial or true copies, reproductions or facsimile copies; and (iv) the
veracity of all information contained in such documents. We have also assumed,
for the purposes of the opinions expressed herein, that all agreements and other
documents have been duly authorized, executed and delivered by all of the
parties thereto other than the Company.
For purposes of the opinion expressed in paragraph 1 below,
we have relied solely upon a Certificate of Status dated August 21, 1998 issued
by the Registrar of Corporations appointed under the Business Corporations Act
(Alberta), a copy of which Certificate is being delivered to you today.
We are members of the Law Society of Alberta, are not
permitted to practice law in any other province of Canada and are not experts
in the laws of other provinces of Canada or of any other jurisdiction. This
opinion is rendered solely with respect to the laws of the Province of Alberta
and the federal laws of Canada applicable therein. Based thereon, we are of
the opinion that:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the Province of Alberta.
2. The execution and delivery of the Senior Indenture by the
Company and the issuance and sale of Senior Debt Securities
have been validly authorized by all necessary corporate
action by the Company. We draw to your attention that the
resolution of the directors of the Company authorizing the
execution of the Senior Indenture by the Company is qualified
by prohibiting execution of the Senior Indenture until an
order has been obtained by the Company under subsection 3(3)
of the Business Corporation Act (Alberta) that the Senior Debt
Securities issued or to be issued under the Senior Indenture
shall not be part of a distribution to the public pursuant to
such Act, thereby exempting the Senior Indenture and the
Senior Debt Securities from the application of Part 7 of the
Act and permitting a non-Canadian trust corporation to act as
trustee under the Senior Indenture.
3. A court of competent jurisdiction in the Province of Alberta
(a "Canadian Court") would give effect to the choice of the
law of the State of New York ("New York law") as the proper
law governing the Senior Debt Securities, provided that such
choice of law is bona fide (in the sense that it was not made
with a view to avoiding the consequences of the laws of any
other jurisdiction), provided that such choice of law is not
contrary to public policy, as that term is understood under
the laws of the Province of Alberta and the laws of Canada
applicable therein and provided the Canadian Court does not
determine there is no connection between New York law and the
Senior Debt Securities. In our opinion, there are no reasons
under the laws of the Province of Alberta or the laws of
Canada applicable therein for avoiding the choice of New York
law to govern the Senior Debt Securities.
4. In an action on a final and conclusive judgment in personam of
any federal or state court in the State of New York (a "New
York Court") that is not impeachable as void or voidable under
New York law, a Canadian Court would not refuse to recognize
the jurisdiction of the court rendering such judgment on that
basis of process being served on Union Pacific Resources Group
Inc. as the agent to receive service of process in the United
States of America appointed by the Company under the Senior
Indenture.
5. If the Senior Debt Securities are sought to be enforced in the
Province of Alberta in accordance with the laws applicable
thereto as chosen by the parties, namely New York law, a
Canadian Court would, subject to paragraph 3 above and to the
extent specifically pleaded and proved as a fact by expert
evidence, recognize the choice of New York law and, upon
appropriate evidence as to such law being adduced, apply such
law to all issues that under the conflict of laws rules of the
Province of Alberta are to be determined in accordance with
the proper or general law of a contract, provided that none of
the provisions of the Senior Debt Securities, or of New York
law, are contrary to public policy as that term is understood
under the laws of the Province of Alberta and the laws of
Canada applicable therein; provided, however, that, in matters
of procedure or to which under the laws in force in the
Province of Alberta, the application of the laws in force in
Alberta is imperative, the laws of the Province of Alberta
will be applied, a Canadian Court will not apply those New
York laws which the Canadian Court characterizes as
procedural, revenue, expropriatory, penal or similar laws, and
a Canadian Court will retain discretion to decline to hear
such action if it is contrary to public policy, as that term
is applied by a Canadian Court, for it to do so, or if it is
not the proper forum to hear such an action, or if concurrent
proceedings are being brought elsewhere. In our opinion, there
are no reasons under the laws of the Province of Alberta or
the laws of Canada applicable therein and no reasons, to our
knowledge with respect to the application of New York law by a
Canadian court, for avoiding enforcement of the Senior Debt
Securities, based on public policy, as that term is understood
under the laws of the province of Alberta and the federal laws
of Canada applicable therein.
6. The laws of the Province of Alberta and the laws of Canada
applicable therein permit an action to be brought in a
Canadian Court on a final and conclusive judgment in personam
for a fixed sum of money of a New York Court that is
subsisting and unsatisfied respecting the enforcement of the
Senior Debt Securities that is not impeachable as void or
voidable under New York law for a sum certain if: (A) such
judgment was not obtained by fraud or in a manner contrary to
natural justice and the enforcement thereof would not be
inconsistent with public policy as such term is applied by a
Canadian Court, or contrary to any order made by the Attorney
General of Canada under the Foreign Extraterritorial Measures
Act (Canada); (B) the enforcement of such judgment does not
constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws or other laws of a public
nature; (C) the action to enforce such judgment is commenced
within six years of the date of such judgment, except that
under the Currency Act (Canada), a Canadian Court may only
five judgment in Canadian dollars; (D) the court rendering
such judgment had jurisdiction over the judgment debtor, as
recognized by the courts of the Province of Alberta (in our
opinion, submission under the provisions of the Senior
Indenture to the jurisdiction of a New York Court will be
sufficient for this purpose); and (E) no new admissible
evidence relevant to the action is discovered prior to
rendering of judgment by the court in the Province of
Alberta. In our opinion, there are no reasons under the laws
of the Province of Alberta or the laws of Canada applicable
therein for avoiding recognition of judgments of a New York
Court under the Senior Debt Securities based on public policy,
as that term is understood under the laws of the Province of
Alberta and the federal laws of Canada applicable therein.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the
caption "Legal Opinions" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ Bennett Jones Verchere
Bennett Jones Verchere
<PAGE>
Exhibit 5.3
[MCINNES COOPER & ROBERTSON LETTERHEAD]
August 25, 1998
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas 76102
RE: Union Pacific Resources Group Inc.
UPRG Capital Trust I
UPRG Capital Trust II
UPRG Capital Trust III
Union Pacific Resources Inc.
UPR Capital Company
Registration Statement on Form S-3
Dear Sirs:
We are counsel for UPR Capital Company., a Novia Scotia unlimited
liability company (the "Company"), and are rendering this opinion in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") of the Company, Union Pacific Resources Group Inc., a Utah
corporation and beneficial owner of all of the equity of the Company ("UPRG"),
Union Pacific Resources Inc., an Alberta corporation and affiliate of the
Company ("UPRI" and together with the Company, the "Subsidiary Issuers") and
UPRG Capital Trust I, UPRG Capital Trust II and UPRG Capital Trust III, each a
Delaware statutory business trust (collectively, the "UPRG Trusts") being
filed today with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the following
securities of the Company; (i) non-convertible unsecured senior debt
securities (the "Senior Debt Securities")and (ii) non-convertible unsecured
subordinated debt securities (the "Subordinated Debt Securities", together
with the Senior Debt Securities, the "Debt Securities").
We have examined (i) the form of the Indenture (the "Senior
Indenture") between UPRG, the Subsidiary Issuers and The Bank of New York, as
trustee (the "Senior Trustee"), pursuant to which the Senior Debt Securities
will be issued, and (ii) we have examined such other documents and made such
other investigations as we have deemed necessary or advisable for purposes of
this opinion. In such examinations, we have assumed: (i) the genuineness of all
signatures; (ii) the authenticity of all documents submitted to us as originals;
(iii) the conformity to authentic originals of all documents submitted to us as
certified, notarial or true copies, reproductions or facsimile copies; and (iv)
the veracity of all information contained in such documents. We have assumed,
for the purposes of the opinion expressed herein, that all agreements and other
documents have been duly authorized, executed and delivered by all of the
parties thereto other than the Company.
This opinion is confined to the laws of the Province of Nova Scotia and
the federal laws of Canada applicable therein.
Based thereon, I am of the opinion that:
1. The Company is an unlimited liability company duly
incorporated and validly existing under the laws of the
Province of Nova Scotia.
2. The execution and delivery of the Senior Indenture by the
Company and the issuance and sale of Senior Debt Securities
have been validly authorized by all necessary corporate
action by the Company.
3. A court of competent jurisdiction in the Province of Nova
Scotia (a "Canadian Court") would give effect to the choice of
the law of the State of New York ("New York law") as the
proper law governing the Senior Debt Securities, provided that
such choice of law is bona fide (in the sense that it was not
made with a view to avoiding the consequences of the laws of
any other jurisdiction), and provided that such choice of law
is not contrary to public policy, as that term is understood
under the laws of the Province of Nova Scotia and the laws of
Canada applicable therein. In our opinion, there are no
reasons under the laws of the Province of Nova Scotia or the
laws of Canada applicable therein for avoiding the choice of
New York law to govern the Senior Debt Securities.
<PAGE>
4. In an action on a final and conclusive judgment in personam
of any federal or state court in the State of New York (a "New
York Court") that is not impeachable as void or voidable under
New York law, a Canadian Court would not refuse to recognize
the jurisdiction of the court rendering such judgment on that
basis of process being served on Union Pacific Resources Group
Inc. as the agent to receive service of process in the United
States of America appointed by the Company under the Senior
Indenture.
5. If the Senior Debt Securities are sought to be enforced in the
Province of Nova Scotia in accordance with the laws applicable
thereto as chosen by the parties, namely New York law, a
Canadian Court would, subject to paragraph 3 above and to the
extent specifically pleaded and proved as a fact by expert
evidence, recognize the choice of New York law and, upon
appropriate evidence as to such law being adduced, apply such
law to all issues that under the conflict of laws rules of the
Province of Nova Scotia are to be determined in accordance
with the proper or general law of a contract, provided that
none of the provisions of the Senior Debt Securities, or of
New York law, are contrary to public policy as that term is
understood under the laws of the Province of Nova Scotia and
the laws of Canada applicable therein; provided, however,
that, in matters of procedure or to which the laws in force
in Nova Scotia the application of the laws in force in Nova
Scotia is imperative, the laws of the Province of Nova Scotia
will be applied, a Canadian Court will not apply those New
York laws which the Canadian Court characterises as
procedural, revenue, expropriatory, penal or similar laws,
and a Canadian Court will retain discretion to decline to
hear such action if it is contrary to public policy, as that
term is applied by a Canadian Court, for it to do so, or if
it is not the proper forum to hear such an action, or if
concurrent proceedings are being brought elsewhere. In our
opinion, there are no reasons under the laws of the Province
of Nova Scotia or the laws of Canada applicable therein and
no reasons, to our knowledge with respect to the application
of New York law by a Canadian court, for avoiding enforcement
of the Senior Debt Securities, based on public policy, as
that term is understood under the laws of the province of
Nova Scotia and the federal laws of Canada applicable therein.
6. The laws of the Province of Nova Scotia and the laws of Canada
applicable therein permit an action to be brought in a
Canadian Court on a final and conclusive judgment in personam
for a fixed sum of money of a New York Court that is
subsisting and unsatisfied respecting the enforcement of the
Senior Debt Securities that is not impeachable as void or
voidable under New York law for a sum certain if: (A) such
judgment was not obtained by fraud or in a manner contrary
to natural justice and the enforcement thereof would not be
inconsistent with public policy as such term is applied by a
Canadian Court, or contrary to any order made by the Attorney
General of Canada under the Foreign Extraterritorial Measures
Act (Canada); (B) the enforcement of such judgment does not
constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws or other laws of a public
nature; (C) the action to enforce such judgment is commenced
within six years of the date of such judgment, except that
under the Currency Act (Canada), a Canadian Court may only
give judgment in Canadian dollars; (D) the court rendering
such judgment had jurisdiction over the judgement debtor, as
recognized by the courts of the Province of Nova Scotia (in
our opinion, submission under the provisions of the Senior
Indenture to the jurisdiction of a New York Court will be
sufficient for this purpose); and (E) no new admissible
evidence relevant to the action is discovered prior to
rendering of judgment by the court in the Province of Nova
Scotia. In our opinion, there are no reasons under the laws of
the Province of Nova Scotia or the laws of Canada applicable
therein for avoiding recognition of judgments of a New York
Court under the Senior Debt Securities based on public policy,
as that term is understood under the laws of the Province of
Nova Scotia and the federal laws of Canada applicable therein.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the
caption "Legal Opinions" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ McInnes Cooper & Robertson
McInnes Cooper & Robertson
<PAGE>
Exhibit 12
UNION PACIFIC RESOURCES GROUP INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in Thousands, Except Ratios)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Years Ended December 31,
Ended ----------------------------------------------------------------
6/30/98 1997 1996 1995 1994 1993
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings (loss) from continuing operations
before income taxes(a)................. $ (5,949) $466,434 $472,575 $457,979 $520,703 $440,077
Add (deduct) distributions greater (to
extent less) than income of
unconsolidated affiliates.............. (1,208) (3,791) (4,147) 2,263 (5,449) 1,323
Fixed charges from below.................. 125,976 64,473 57,702 27,566 11,841 10,809
Capitalized interest included in fixed
charges................................ (3,057) (3,846) (157) (972) (909) (1,475)
-------- -------- -------- -------- -------- --------
Earnings available for fixed charges $115,762 $523,270 $525,973 $486,836 $526,186 $450,734
======== ======== ======== ======== ======== ========
Fixed charges:
Interest expense, including
amortization of debt expense/
discount(b)......................... $117,488 $ 53,108 $ 50,582 $ 19,143 $ 4,612 $ 3,143
Portion of rentals representing an
interest factor.................... 5,431 7,519 6,963 7,451 6,320 6,191
Interest capitalized.................. 3,057 3,846 157 972 909 1,475
-------- -------- -------- -------- -------- --------
Total fixed charges................ $125,976 $ 64,473 $ 57,702 $ 27,566 $ 11,841 $ 10,809
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges....... 0.9(c) 8.1 9.1 17.7 44.4 41.7
======== ======== ======== ======== ======== ========
</TABLE>
- ----------
(a) Before cumulative effect of changes in accounting principles of $59,032 in
1992.
(b) Beginning in 1995, interest expense includes the effects of debt
incurred in October 1995 in connection with the Company's asset
restructuring and initial public offering and debt incurred in October
and November 1996 to refinance such initial debt (see Note 2 to the
Consolidated Financial Statements).
(c) Due to lower earnings, primarily caused by lower hydrocarbon prices and
higher fixed charges resulting from higher interest expense, earnings
are deficient by $10,214 to cover fixed charges.
<PAGE>
Exhibit 15.1
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
August 19, 1998
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
consolidated financial information of Union Pacific Resources Group Inc. for
the period ended June 30, 1997 as indicated in our report dated July 16, 1997;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which was included in your
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 is being
used in this Registration Statement.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that
Act.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
<PAGE>
Exhibit 15.2
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
August 21, 1998
Union Pacific Resources Group Inc.
801 Cherry Street
Fort Worth, Texas
We are aware that Union Pacific Resources Group Inc. has incorporated by
reference in this Registration Statement its Form 10-Q for the quarter ended
June 30, 1998 which includes our report dated July 26, 1998 covering the
unaudited financial information contained therein. Pursuant to Regulation C
of the Securities Act of 1933, that report is not considered a part of the
registration statement prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Union Pacific Resources Group Inc. on Form S-3 of our report dated January 26,
1998, appearing in the Annual Report on Form 10-K of Union Pacific Resources
Group Inc. for the year ended December 31, 1997 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Fort Worth, Texas
August 19, 1998
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Union Pacific Resources Group Inc. on Form S-3 of our reports dated January 28,
1998, and January 31, 1997, appearing in the Annual Report on Form 40-F of
Norcen Resources Limited for the year ended December 31, 1997 and 1996 and to
the reference to us under the heading "Experts" in the Prospectus which is part
of this Registration Statement.
/s/ Deloitte & Touche
DELOITTE & TOUCHE
Calgary, Alberta
Canada
August 21, 1998
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the reference of Arthur Andersen LLP under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Fort Worth, Texas
August 21, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that LYNNE V. CHENEY, a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, and MARK L. JONES, and each of
them acting individually, her true and lawful attorney, each with power to act
without the other and full power of substitution, to execute, deliver and
file, for and on her behalf, and in her name and in her capacity as Director,
Registration Statements on Form S-3 (or other appropriate form) for filing
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and any other documents in support thereof or supplemental or
amendatory thereto, and any subsequent registration statement filed by the
Corporation pursuant to Rule 462(b) of the Securities Act of 1933, as amended
with respect to issuance of debentures, notes and other debt obligations,
common stock, preferred stock, any convertible securities, warrants or rights
to purchase any of the foregoing, in an amount up to $1,000,000,000 (or the
equivalent in foreign denomination currency), of Union Pacific Resources Group
Inc., hereby granting to such attorneys and each of them full power and
authority to do and perform each and every act and thing whatsoever as such
attorney or attorneys may deem necessary or advisable to carry out fully the
intent of the foregoing as the undersigned might or could do personally or in
his capacity as Director, hereby ratifying and confirming all acts and things
which such attorney or attorneys may do or cause to be done by virtue of this
power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Lynne V. Cheney
------------------------------------
LYNNE V. CHENEY
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that PRESTON M. GEREN III,a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, his true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc. or affiliate, hereby granting to such attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as such attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in his capacity as Director, hereby ratifying
and confirming all acts and things which such attorney or attorneys may do or
cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Preston M. Geren III
--------------------------------
PRESTON M. GEREN III
<PAGE>
Exhibit 24.3
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that LAWRENCE M. JONES,a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, his true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc. or affiliate, hereby granting to such attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as such attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in his capacity as Director, hereby ratifying
and confirming all acts and things which such attorney or attorneys may do or
cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Lawrence M. Jones
---------------------------------
LAWRENCE M. JONES
<PAGE>
Exhibit 24.4
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that DREW LEWIS,a Director of Union
Pacific Resources Group Inc., a Utah Corporation (the "Corporation"), hereby
appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and each
of them acting individually, his true and lawful attorney, each with power to
act without the other and full power of substitution, to execute, deliver and
file, for and on his behalf, and in his name and in his capacity as Director,
a Registration Statement on Form S-3 (or other appropriate form) for filing
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and any other documents in support thereof or supplemental or
amendatory thereto, and any subsequent registration statement filed by the
Corporation pursuant to Rule 462(b) of the Securities Act of 1933, as amended
with respect to issuance of debentures, notes and other debt obligations,
common stock, preferred stock, any convertible securities, warrants or rights
to purchase any of the foregoing, in an amount up to $1,000,000,000 (or the
equivalent in foreign denomination currency), of Union Pacific Resources Group
Inc. or affiliate, hereby granting to such attorneys and each of them full
power and authority to do and perform each and every act and thing whatsoever
as such attorney or attorneys may deem necessary or advisable to carry out
fully the intent of the foregoing as the undersigned might or could do
personally or in his capacity as Director, hereby ratifying and confirming all
acts and things which such attorney or attorneys may do or cause to be done by
virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Drew Lewis
------------------------------
DREW LEWIS
<PAGE>
Exhibit 24.5
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that CLAUDINE B. MALONE,a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, her true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on her behalf, and in her name and in her capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc., hereby granting to such attorneys and each of
them full power and authority to do and perform each and every act and thing
whatsoever as such attorney or attorneys may deem necessary or advisable to
carry out fully the intent of the foregoing as the undersigned might or could
do personally or in her capacity as Director, hereby ratifying and confirming
all acts and things which such attorney or attorneys may do or cause to be
done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Claudine B. Malone
-------------------------------------
CLAUDINE B. MALONE
<PAGE>
Exhibit 24.6
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that JOHN W. PODUSKA, SR., PH.D.,a
Director of Union Pacific Resources Group Inc., a Utah Corporation (the
"Corporation"), hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and
MARK L. JONES, and each of them acting individually, his true and lawful
attorney, each with power to act without the other and full power of
substitution, to execute, deliver and file, for and on his behalf, and in his
name and in his capacity as Director, a Registration Statement on Form S-3 (or
other appropriate form) for filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and any other documents in
support thereof or supplemental or amendatory thereto, and any subsequent
registration statement filed by the Corporation pursuant to Rule 462(b) of the
Securities Act of 1933, as amended with respect to issuance of debentures,
notes and other debt obligations, common stock, preferred stock, any
convertible securities, warrants or rights to purchase any of the foregoing,
any stock purchase contracts and any stock purchase units in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc., hereby granting to such attorneys and each of
them full power and authority to do and perform each and every act and thing
whatsoever as such attorney or attorneys may deem necessary or advisable to
carry out fully the intent of the foregoing as the undersigned might or could
do personally or in his capacity as Director, hereby ratifying and confirming
all acts and things which such attorney or attorneys may do or cause to be
done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ John W. Poduska, Sr., Ph.D.
-------------------------------------
JOHN W. PODUSKA, SR., PH.D.
<PAGE>
Exhibit 24.7
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that MICHAEL E. ROSSI,a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, his true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc. or affiliate, hereby granting to such attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as such attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in his capacity as Director, hereby ratifying
and confirming all acts and things which such attorney or attorneys may do or
cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/Michael E. Rossi
--------------------------------
MICHAEL E. ROSSI
<PAGE>
Exhibit 24.8
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that SAMUEL K. SKINNER,a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, his true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc. or affiliate, hereby granting to such attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as such attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in his capacity as Director, hereby ratifying
and confirming all acts and things which such attorney or attorneys may do or
cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ Samuel K. Skinner
-------------------------------
SAMUEL K. SKINNER
<PAGE>
Exhibit 24.9
POWER OF ATTORNEY
UNION PACIFIC RESOURCES GROUP INC.
KNOW ALL MEN BY THESE PRESENTS, that JAMES R. THOMPSON, a Director of
Union Pacific Resources Group Inc., a Utah Corporation (the "Corporation"),
hereby appoints JACK L. MESSMAN, JOSEPH A. LASALA, JR., and MARK L. JONES, and
each of them acting individually, his true and lawful attorney, each with
power to act without the other and full power of substitution, to execute,
deliver and file, for and on his behalf, and in his name and in his capacity
as Director, a Registration Statement on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and any other documents in support thereof or
supplemental or amendatory thereto, and any subsequent registration statement
filed by the Corporation pursuant to Rule 462(b) of the Securities Act of
1933, as amended, with respect to issuance of debentures, notes and other debt
obligations, common stock, preferred stock, any convertible securities,
warrants or rights to purchase any of the foregoing, in an amount up to
$1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Group Inc. or affiliate, hereby granting to such attorneys
and each of them full power and authority to do and perform each and every act
and thing whatsoever as such attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as the undersigned
might or could do personally or in his capacity as Director, hereby ratifying
and confirming all acts and things which such attorney or attorneys may do or
cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
as of this 14th day of July, 1998.
/s/ James R. Thompson
--------------------------------
JAMES R. THOMPSON
<PAGE>
POWER OF ATTORNEY
UNION PACIFIC RESOURCES, INC.
KNOW ALL MEN BY THESE PRESENTS, that JOHN F. CURRAN, JOSEPH A. LASALA, JR.,
ROBERT A. LEHODEY, JACK L. MESSMAN, and JAMES G. SMELTZER, Directors of Union
Pacific Resources Inc., an Alberta Corporation (the "Corporation"), hereby
appoints MARK L. JONES, acting as their true and lawful attorney, each with
power to act, to execute, deliver and file, for and on their behalf, and in
their name and in their capacity as Director, a Registration Statement on Form
S-8 (or other appropriate form) for filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and any other documents
in support thereof or supplemental or amendatory thereto, and any subsequent
registration statement filed by the Corporation pursuant to Rule 462(b) of the
Securities Act of 1933, as amended, with respect to the issuance of debentures,
notes and other debt obligations, common stock, preferred stock, any convertible
securities, warrants or rights to purchase any of the foregoing, in an amount up
to $1,000,000,000 (or the equivalent in foreign denomination currency), of Union
Pacific Resources Inc. or affiliate, hereby granting to such attorney full power
and authority to do and perform each and every act and thing whatsoever as such
attorney may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in their capacity
as Director, hereby ratifying and confirming all acts and things which such
attorney may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 21st day of August, 1998.
/s/ John. F. Curran
___________________________________________
John F. Curran
/s/ Joseph A. LaSala, Jr.
___________________________________________
Joseph A. LaSala, Jr.
/s/ Robert A. Lehodey
___________________________________________
Robert A. Lehodey
/s/ Jack L. Messman
___________________________________________
Jack L. Messman
/s/ James G. Smeltzer
___________________________________________
James G. Smeltzer
<PAGE>
POWER OF ATTORNEY
UPR CAPITAL COMPANY
KNOW ALL MEN BY THESE PRESENTS, that JOSEPH A. LASALA, JR. JACK L.
MESSMAN, and MORRIS B. SMITH, Directors of UPR Capital Company, a Nova Scotia
Corporation (the "Corporation"), hereby appoints MARK L. JONES, acting as their
true and lawful attorney, with power to act without the other and full power of
substitution, to execute, deliver and file, for and on their behalf, and in
their name and in their capacity as Director, a Registration Statement on Form
S-8 (or other appropriate form) for filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and any other documents
in support thereof or supplemental or amendatory thereto, and any subsequent
registration statement filed by the Corporation pursuant to Rule 462(b) of the
Securities Act of 1933, as amended, with respect to the issuance of debentures,
notes and other debt obligations, common stock, preferred stock, any convertible
securities, warrants or rights to purchase any of the foregoing, in an amount up
to $1,000,000,000 (or the equivalent in foreign denomination currency), of UPR
Capital Company or affiliate, hereby granting to such attorney full power and
authority to do and perform each and every act and thing whatsoever as such
attorney may deem necessary or advisable to carry out fully the intent of the
foregoing as the undersigned might or could do personally or in their capacity
as Director, hereby ratifying and confirming all acts and things which such
attorney may do or cause to be done by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney as
of this 21st day of August, 1998.
/s/ Joseph A. LaSala, Jr.
___________________________________________
Joseph A. LaSala, Jr.
/s/ Jack L. Messman
___________________________________________
Jack L. Messman
/s/ Morris B. Smith
___________________________________________
Morris B. Smith
<PAGE>
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |_|
-------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------------
UNION PACIFIC RESOURCES GROUP INC.
(Exact name of obligor as specified in its charter)
Utah 13-2647483
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
801 Cherry Street
Fort Worth, Texas 76102
(Address of principal executive offices) (Zip code)
Union Pacific Resources Inc.
(Exact name of obligor as specified in its charter)
Alberta, Canada Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400, 425-1st Street S.W. T2P4V4
Calgary, Alberta, Canada (Zip code)
(Address of principal executive offices)
UPR Capital Company
(Exact name of obligor as specified in its charter)
Nova Scotia, Canada Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
400, 425-lst Street S.W.
Calgary, Alberta, Canada T2P4V4
(Address of principal executive offices) (Zip code)
-------------------------
Senior Debt Securities and Guarantees of Senior Debt Securities
(Title of the indenture securities)
<PAGE>
1. General information. Furnish the following information as to the
Trustees:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association Now York, New York 10005
(b) whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) is now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits la and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York,
and State of New York, on the 20th day of August, 1998.
THE BANK OF NEW YORK
By: /s/ ILIANA ACEVEDO
--------------------------
Name: ILIANA ACEVEDO
Title: ASSISTANT TREASURER
4
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, NY 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
March 31, 1998, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the Federal
Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.......... $6,397,993
Interest-bearing balances................................... 1,138,362
Securities:
Held-to-maturity securities................................. 1,062,074
Available-for-sale securities............................... 4,167,240
Federal funds sold and Securities purchased under
agreements to resell........................................ 391,650
Loans and lease financing receivables:
Loans and leases, net of unearned income..........36,538,242
LESS: Allowance for loan and lease losses............631,725
LESS: Allocated transfer risk reserve......................0
Loans and leases, net of unearned income, allowance and 35,906,517
reserve.....................................................
Assets held in trading accounts................................ 2,145,149
Premises and fixed assets (including capitalized leases)....... 663,928
Other real estate owned....................................... 10,895
Investments in unconsolidated subsidiaries and associated
companies...................................................... 237,991
Customers' liability to this bank on acceptances outstanding... 992,747
Intangible assets.............................................. 1,072,517
Other assets................................................... 1,643,173
-----------
Total assets................................................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices......................................... $24,849,054
Noninterest-bearing...............................10,011,422
Interest-bearing..................................14,837,632
</TABLE>
<PAGE>
2
<TABLE>
<S> <C>
In foreign offices, Edge and Agreement subsidiaries and
IBF's 15,319,002
Noninterest bearing..................................707,820
Interest Bearing..................................14,611,182
Federal Funds purchase and Securities sold under agreements
to repurchase.................................................. 1,906,066
Demand notes issued to the U.S. Treasury....................... 215,985
Trading liabilities............................................ 1,591,288
Other borrowed money:
With remaining maturity of one year or less................. 1,991,119
With remaining maturity of more than one year through
three years................................................. 0
With remaining maturity of more than three years............
25,574
Banks liability or acceptances executed and outstanding........ 998,145
Subordinated notes and debentures 1,314,000
Other Liabilities.............................................. 2,421,281
-----------
Total liabilities.............................................. $50,631,514
-----------
EQUITY CAPITAL
Common Stock................................................... 1,135,284
Surplus........................................................ 731,319
Undivided profits and capital reserves......................... 3,328,050
Net unrealized holding gains (losses) or available-for-sale 40,198
securities.....................................................
Cumulative foreign currency translation adjustments............ (36,129)
-----------
Total equity capital........................................... 5,198,722
-----------
Total liabilities and equity capital........................... $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and belief
Robert E. Keilman
We, the undersigned directors, attest to the correctness of the Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi }
Alan R. Griffith } Directors
J. Carter Bacot }
