-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RDKw1Djj1JemNWbdENI3BtgIOHVafZjfWFYYx/iFV5/yLXnTprgPvwIBzZuULSQF lTPydf4FYVx+nIr8u801sw== 0000950129-03-004166.txt : 20030813 0000950129-03-004166.hdr.sgml : 20030813 20030813161123 ACCESSION NUMBER: 0000950129-03-004166 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20030813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APACHE CORP CENTRAL INDEX KEY: 0000006769 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 410747868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-107934 FILM NUMBER: 03841440 BUSINESS ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: ONE POST OAK CENTER STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 BUSINESS PHONE: 7132966000 MAIL ADDRESS: STREET 1: 2000 POST OAK BLVD STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77056-4400 FORMER COMPANY: FORMER CONFORMED NAME: APACHE OIL CORP DATE OF NAME CHANGE: 19660830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APACHE FINANCE CANADA CORP CENTRAL INDEX KEY: 0001098142 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-107934-01 FILM NUMBER: 03841439 BUSINESS ADDRESS: STREET 1: 700 9TH AVE SW STE 1000 STREET 2: CALGARY ALBERTA CITY: CANADA T2P 3V4S BUSINESS PHONE: 4032611200 MAIL ADDRESS: STREET 1: 700 9TH AVE SW STE 1000 STREET 2: CALGARY ALBERTA CITY: CANADA T2P 3V4 S-4 1 h08254sv4.txt APACHE CORPORATION AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 2003 REGISTRATION NO. 333- 333- -01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- APACHE CORPORATION APACHE FINANCE CANADA CORPORATION (Exact name of each registrant as specified in its charter) DELAWARE NO. 41-0747868 1311 NOVA SCOTIA NO. 98-0216251 1311 (State or other jurisdiction of (I.R.S. Employer (Primary Standard Industrial incorporation or organization) Identification Numbers) Classification Code Number)
ONE POST OAK CENTRAL ERIC L. HARRY 2000 POST OAK BOULEVARD, SUITE 100 2000 POST OAK BOULEVARD, SUITE 100 HOUSTON, TEXAS 77056-4400 HOUSTON, TEXAS 77056-4400 (713) 296-6000 (713) 296-6000 (Address, including zip code, and telephone number, (Name, address, including zip code, and telephone including number, area code, of registrant's principal executive including area code, of agent for service) offices)
--------------------- COPIES TO: RALPH K. MILLER, JR. CRAIG E. CHAPMAN CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & MARTIN SIDLEY AUSTIN BROWN & WOOD LLP 1200 SMITH STREET, SUITE 1400 787 SEVENTH AVENUE HOUSTON, TEXAS 77002-4310 NEW YORK, NEW YORK 10019
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: From time to time after this registration statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d) 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. [ ] --------------------- CALCULATION OF REGISTRATION FEE ---------------------
- --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) FEE(2) - --------------------------------------------------------------------------------------------------------------------------------- 4.375% Notes due 2015 of Apache Finance Canada Corporation......................... $350,000,000 100% $350,000,000 $28,315 - --------------------------------------------------------------------------------------------------------------------------------- Guarantees(3)................................ (3) (3) (3) (3) - --------------------------------------------------------------------------------------------------------------------------------- Total........................................ $350,000,000 100% $350,000,000 $28,315 - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f)(2) under the Securities Act. (2) Calculated pursuant to Rule 457(f)(2) under the Securities Act. (3) Each of the securities to be issued by Apache Finance Canada Corporation will be irrevocably and unconditionally guaranteed on an unsecured senior basis by Apache Corporation. No separate consideration will be received for the guarantees of Apache Corporation and, therefore, pursuant to Rule 457(n) under the Securities Act, no additional registration fee is payable in respect of the registration of such guarantees. --------------------- The Registrants hereby amend this registration statement on the 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 become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date the SEC, acting pursuant to said Section 8(a), may determine. --------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The information in this prospectus is not complete and may be changed. We may not consummate the exchange offer until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell or exchange these securities and it is not soliciting an offer to acquire or exchange these securities in any jurisdiction where the offer, sale or exchange is not permitted. SUBJECT TO COMPLETION, DATED AUGUST 13, 2003 PROSPECTUS $350,000,000 APACHE FINANCE CANADA CORPORATION EXCHANGE OFFER FOR $350,000,000 4.375% NOTES DUE 2015 FULLY AND UNCONDITIONALLY GUARANTEED BY (APACHE CORPORATION LOGO) --------------------- Apache Canada is offering to exchange its 4.375% senior notes due 2015, or the "exchange notes," for its currently outstanding 4.375% senior notes due 2015, or the "outstanding notes." We have fully and unconditionally guaranteed the outstanding notes and will fully and unconditionally guarantee the exchange notes. The exchange notes are substantially identical to the outstanding notes, except that the exchange notes have been registered under the federal securities laws, and specified transfer restrictions, registration rights and special interest relating to the outstanding notes will not apply to the exchange notes. The exchange notes will represent the same debt as the outstanding notes, and we and Apache Canada will issue the exchange notes under the same indenture. The principal features of the exchange offer are as follows: - Expires 5:00 p.m., New York City time, on , 2003 unless extended. - Subject to customary conditions, including the condition that the exchange offer not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission, or the "SEC." - All outstanding notes that are validly tendered and not withdrawn will be exchanged. - Tenders of outstanding notes may be withdrawn any time prior to the expiration of this exchange offer. - The exchange of the outstanding notes for exchange notes will not be a taxable exchange for U.S. and Canadian federal income tax purposes. - We will not receive any cash proceeds from the exchange offer. - Any outstanding notes not validly tendered will continue to remain outstanding and accrue interest but will remain subject to existing transfer restrictions. --------------------- Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 90 days after the expiration date, as defined herein, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." There has not previously been any public market for the exchange notes that will be issued in the exchange offer. We do not intend to list the exchange notes on any national stock exchange or on the Nasdaq National Market. There can be no assurance that an active market for such exchange notes will develop. NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- The date of this prospectus is , 2003. TABLE OF CONTENTS
PAGE ---- Oil and Gas Terms........................................... i Where You Can find More Information......................... i Cautionary Statements Regarding Forward-Looking Statements................................................ iii Prospectus Summary.......................................... 1 Use of Proceeds............................................. 10 Capitalization.............................................. 11 Ratios of Earnings to Fixed Charges......................... 12 The Exchange Offer.......................................... 12 Description of Notes and Guarantees......................... 23 Federal Income Tax Considerations........................... 38 Plan of Distribution........................................ 39 Legal Matters............................................... 41 Experts..................................................... 41
In this prospectus, "Apache," "we," "us," and "our" mean Apache Corporation and "Apache Canada" means Apache Finance Canada Corporation. Unless otherwise stated, the dollar amounts contained in this prospectus are presented in U.S. dollars. You should not assume that the information contained in, as well as any information we filed or will file with the SEC and that is incorporated by reference into this prospectus is accurate as of any date other than its respective date. Our business, financial condition, results of operations and prospects may have changed since that date. This exchange offer is not being made to, and we will not accept surrenders for exchange from, holders of outstanding notes in any jurisdiction in which the exchange offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of that jurisdiction. OIL AND GAS TERMS When describing natural gas:.......... Mcf = thousand cubic feet MMbtu = million British thermal units MMcf = million cubic feet Bcf = billion cubic feet When describing oil:.................. Bbl = barrel Mbbls = thousand barrels MMbbls = million barrels When comparing natural gas to oil:.... 6 Mcf of gas = 1 bbl of oil equivalent Boe = barrel of oil equivalent Mboe = thousand barrels of oil equivalent MMboe = million barrels of oil equivalent
WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference rooms located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. i Our common stock has been listed and traded on the New York Stock Exchange since 1969 and the Chicago Stock Exchange since 1960. Accordingly, you may inspect the information we file with the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York 10005, and at the Chicago Stock Exchange, One Financial Place, 440 S. LaSalle Street, Chicago, Illinois 60605-1070. For more information on obtaining copies of our public filings at the New York Stock Exchange, you should call (212) 656-5060. We incorporate by reference the documents filed by us listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, other than information in such documents that is deemed not to be filed, after the date of this prospectus and until this offering is completed, or after the date of this initial registration statement to the date of effectiveness of this registration statement: - Annual Report on Form 10-K for the fiscal year ended December 31, 2002; - Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003; - Current Report on Form 8-K, filed July 14, 2003; - Current Report on Form 8-K/A, filed June 16, 2003; - Current Report on Form 8-K, filed May 16, 2003; - Current Report on Form 8-K, filed April 17, 2003; - Current Report on Form 8-K, filed January 16, 2003; and - Current Report on Form 8-K, filed January 13, 2003. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. Each of these documents is available from the SEC's web site and public reference rooms described above. Through our website, http://www.apachecorp.com, you can access electronic copies of documents we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments to those reports. Information on our website is not incorporated by reference in this prospectus. Access to those electronic filings is available as soon as practical after filing with the SEC. You may also request a copy of those filings, excluding exhibits, at no cost by writing or telephoning Cheri L. Peper, Corporate Secretary, at our principal executive office, which is: Apache Corporation 2000 Post Oak Boulevard, Suite 100 Houston, Texas 77056-4400 (713) 296-6000. IF YOU WOULD LIKE TO REQUEST ANY DOCUMENTS, PLEASE DO SO BY , 2003, IN ORDER TO RECEIVE THEM BEFORE THE EXCHANGE OFFER EXPIRES. There are no separate financial statements of Apache Canada included or incorporated by reference in this prospectus. We do not believe these financial statements would be helpful because: - Apache Canada is a wholly-owned subsidiary of Apache, which files consolidated financial information under the Securities Exchange Act of 1934; - the notes to the financial statements in the periodic reports that Apache files with the SEC include condensed consolidating financial statements for Apache, Apache Canada and other subsidiaries of Apache; ii - Apache Canada does not have any independent operations other than issuing the notes, holding shares in subsidiaries, and other necessary or incidental activities as described in this prospectus; and - Apache guarantees the notes of Apache Canada. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated by reference in this prospectus contain statements that constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward looking statements. In some cases, you can identify forward looking statements by terminology such as "expect," "anticipate," "estimate," "intend," "may," "will," "could," "would," "should," "predict," "potential," "plan," "believe" or the negative of these terms or similar terminology. These statements are only predictions. Actual events or results may differ materially because of market conditions in our markets or other factors. Moreover, we do not, nor does any other person, assume responsibility for the accuracy and completeness of those statements. Unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update any of the forward-looking statements after the date of this prospectus. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Results of Operations and Financial Condition" in our Form 10-K for the fiscal year ended December 31, 2002 (incorporated by reference in this prospectus), and similar sections in our subsequent filings that we incorporated by reference in this prospectus, which describe risks and factors that could cause results to differ materially from those projected in those forward-looking statements. Those risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict these new risk factors, nor can we assess the impact, if any, of these new risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those projected in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 are not applicable to Apache Canada. iii PROSPECTUS SUMMARY This summary highlights selected information about us, Apache Canada and the exchange offer. This summary is not complete and does not contain all of the information that is important to you. You should carefully read this prospectus and the other documents we refer to and incorporate by reference for a more complete understanding of us and the exchange offer. In particular, we incorporate important business and financial information in this prospectus. APACHE CORPORATION Apache Corporation is an independent energy company that, directly and through subsidiaries, explores for, acquires and develops oil and gas reserves and produces natural gas, crude oil, condensate and natural gas liquids. In North America, our exploration and production interests are focused on the Gulf of Mexico, the Anadarko Basin, the Permian Basin, the Gulf Coast and the Western Sedimentary Basin of Canada. Outside North America, we currently have exploration and production interests offshore Western Australia, in and offshore Egypt, in Argentina, and offshore The People's Republic of China and the UK North Sea, and exploration interests in Poland. Through June 30, 2003, our average daily production was: - 194 Mbbls of crude oil, condensate and natural gas liquids; and - 1,172 MMcf of natural gas. As of June 30, 2003, our worldwide proved reserves totaled 1,543 MMboe, including: - 812 MMbbls of crude oil, condensate and natural gas liquids; and - 4,384 Bcf of natural gas. STRATEGY Our strategy is to increase our oil and gas reserves, production, cash flow and earnings through a balanced growth program that involves: - exploiting our existing asset base; - acquiring properties to which we can add value; and - investing in high-potential exploration prospects. Exploiting Our Existing Asset Base. We seek to maximize the value of our existing asset base by increasing production and reserves while controlling per unit operating costs. In order to achieve these objectives, we actively examine our operations to reduce costs, identify production enhancement initiatives such as workovers and recompletions employing new technology, and divest marginal and non-strategic properties. Acquiring Properties to Which We Can Add Value. Generally, we seek to purchase reserves at appropriate prices by avoiding auction processes where we are competing with other buyers. Our aim is to follow each acquisition with a cycle of reserve enhancement, property consolidation and cash flow acceleration, thereby facilitating asset growth and debt reduction. During the past decade, we have consistently succeeded in adding value to acquired properties through this strategy. We acquired 254 MMboe and 213 MMboe of proved reserves for $1.3 billion and $0.9 billion in 2000 and 2001, respectively. In addition, the acquisitions included $94 million of production, processing and transportation facilities in 2000, and $146 million of such facilities and $197 million of goodwill in 2001. In 2002, we acquired an estimated 49 MMboe of proved reserves for approximately $352 million. Our 2002 acquisitions added $3 million of production, processing and transportation facilities. For the first six months in 2003, we have acquired an estimated 231 MMboe of proved reserves for approximately $1.2 billion, and we have added $5 million of production, processing and transportation facilities. We believe that the current 1 environment is favorable for possible additional acquisitions, and we continue to evaluate attractive opportunities. Any future acquisitions would be subject to a number of conditions, including conditions beyond our control, and there can be no assurance that we will enter into or actually consummate any such transactions. Investing In High-Potential Exploration Prospects. Our international investments and exploration activities are a significant component of our long-term growth strategy. They complement our North American operations, which are more development oriented. We seek to concentrate our exploratory investments in a select number of international areas and to become a dominant operator in those regions. We believe that these investments, although higher-risk, offer the potential for significant reserve additions. A critical component in implementing our three-pronged growth strategy is maintenance of significant financial flexibility. We are committed to preserving a strong balance sheet and credit position to give us the foundation required to pursue our growth initiatives. RECENT DEVELOPMENTS On July 3, 2003, we announced the acquisition of producing properties on the Outer Continental Shelf of the Gulf of Mexico from the Shell Exploration and Production Company ("Shell") for $200 million had been completed, subject to normal post-closing adjustments, including preferential rights. Prior to the transaction, Morgan Stanley Capital Group, Inc. ("Morgan Stanley") paid Shell $300 million to acquire an overriding royalty interest in a portion of the reserves to be produced over the next four years. Shell's sale of an overriding royalty interest to Morgan Stanley is commonly known in the industry as a volumetric production payment ("VPP"). Under the terms of the VPP, Morgan Stanley is to receive a fixed volume of oil and gas production over the four-year term. The VPP reserves and production will not be booked by us. We will record estimated proved reserves of 124.6 Bcf of natural gas and 6.6 MMbbls of oil as a result of the Shell transaction. In addition, a $60 million liability for the future cost to produce and deliver volumes subject to the VPP will be recorded by Apache because the overriding royalties are not burdened by production costs. This liability will be amortized as the volumes are produced and delivered to Morgan Stanley. The purchase agreement was effective as of July 1, 2003. The acquisition included interests in 26 fields covering 50 blocks (approximately 209,000 acres) and interests in two onshore gas plants. We will operate 15 of the fields with 91 percent of the production. The purchase price was paid from cash on hand and borrowings under our existing lines of credit and proceeds from the sale of commercial paper. Our executive offices are located at 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056, and our telephone number is (713) 296-6000. --------------------- APACHE CANADA Apache Canada is an unlimited liability company organized in August 1999 under the laws of Nova Scotia, Canada. Apache Canada was established to facilitate financing of and investment in our Canadian operations and entities. We use Apache Canada to issue debt securities, such as the outstanding notes and the exchange notes, guaranteed by us. The principal place of business of Apache Canada is 700 -- 9th Ave. SW, Suite 1000, Calgary, Alberta, Canada T2P 3V4; telephone 403-261-1200. --------------------- SUMMARY OF THE EXCHANGE OFFER For a more complete description of the terms of the exchange offer, see "The Exchange Offer" below in this prospectus. 2 The Exchange Offer............ Apache Canada is offering to exchange up to $350,000,000 aggregate principal amount of its 4.375% Notes due 2015, which have been registered under the Securities Act (the "exchange notes"), for up to $350,000,000 aggregate principal amount of its outstanding 4.375% Notes due 2015, which were issued in a private offering on May 15, 2003 (the "outstanding notes"). Apache Canada will issue exchange notes promptly after the expiration of the exchange offer. The outstanding notes may be exchanged only in integral multiples of $1,000 principal amount. Registration Rights........... You are entitled to exchange your outstanding notes for freely tradeable exchange notes with substantially identical terms. The exchange offer will satisfy your registration rights. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your untendered outstanding notes. Accordingly, if you do not exchange your outstanding notes, you will not be able to reoffer, resell or otherwise dispose of your outstanding notes unless you comply with the registration and prospectus delivery requirements of the Securities Act, or if an exemption from registration under the Securities Act is available. Resales of the Exchange Notes......................... Based on interpretations by the staff of the SEC, as detailed in a series of "no-action letters" issued to third parties, we believe that the exchange notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that: - you are acquiring the exchange notes in the ordinary course of your business; - you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in a distribution of the exchange notes; and - you are not an "affiliate" of ours. If you do not meet the above criteria you will have to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any reoffer, resale or other disposition of your exchange notes. Brokers or dealers who acquired outstanding notes directly from Apache Canada may not rely on the staff's interpretations and must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as a selling security holder, in order to resell the outstanding notes or the exchange notes. Each broker or dealer that receives exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making or other trading activities, except for outstanding notes that were acquired directly from us, must acknowledge that it will deliver this prospectus in connection with any sale of exchange notes. 3 Accrued Interest on the Exchange Notes and Outstanding Notes......................... The exchange notes will bear interest at the annual rate of 4.375% from the most recent date to which interest has been paid on the outstanding notes or if no interest has been paid, from the issue date of the outstanding notes. If your outstanding notes are accepted for exchange, then you will receive interest on the exchange notes and not on the outstanding notes. Expiration Date............... 5:00 p.m., New York City time, on , 2003, unless we extend the expiration date. Conditions to the Exchange Offer......................... The exchange offer is subject to customary conditions, which may be waived by us. The exchange offer is not conditioned upon any minimum principal amount of outstanding notes being tendered. Procedures for Tendering Outstanding Notes............. If you wish to tender outstanding notes for exchange notes pursuant to the exchange offer, you must transmit to JPMorgan Chase Bank, who is the exchange agent, on or prior to the expiration date: - a properly completed and duly executed letter of transmittal, which accompanies this prospectus, together with your outstanding notes and any other required documentation, to the exchange agent at its address listed in this prospectus and on the front cover of the letter of transmittal; or - a computer-generated agent's message transmitted through The Depository Trust Company's Automated Tender Program system and received by the exchange agent and forming a part of a confirmation of book-entry transfer in which you acknowledge and agree to be bound by the terms of the letter of transmittal. By executing the letter of transmittal, you will represent to us that, among other things: - you, or the person or entity receiving the related exchange notes, are acquiring the exchange notes in the ordinary course of business; - neither you nor any person or entity receiving the related exchange notes is engaging in or intends to engage in a distribution of the exchange notes within the meaning of the federal securities laws; - you are not an "affiliate" of ours; and - you are not acting on behalf of any person or entity that could not truthfully make these statements. See "The Exchange Offer -- Procedures for Tendering Outstanding Notes" and "Plan of Distribution." Special Procedures for Beneficial Holders............ If you are the beneficial holder of outstanding notes that are registered in the name of your broker, dealer, commercial bank, trust company or other nominee, and you wish to tender in the 4 exchange offer, you should contact the person in whose name your outstanding notes are registered promptly and instruct such person to tender on your behalf. See "The Exchange Offer -- Procedures for Tendering Outstanding Notes." Guaranteed Delivery Procedures.................... If you wish to tender your outstanding notes and you cannot deliver such notes, the letter of transmittal or any other required documents to the exchange agent before the expiration date, you may tender your outstanding notes according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures." Withdrawal Rights............. Tenders may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date. Acceptance of Outstanding Notes and Delivery of Exchange Notes......................... Subject to specified conditions, we will accept for exchange any and all outstanding notes which are properly tendered in the exchange offer before 5:00 p.m., New York City time, on the expiration date. The exchange notes will be delivered promptly after the expiration date. See "The Exchange Offer -- Terms of the Exchange Offer." Federal Income Tax Considerations................ The exchange of outstanding notes for exchange notes generally will not be a taxable event for United States and Canadian federal income tax purposes. See "Federal Income Tax Considerations" for more information. Use of Proceeds............... We will not receive any proceeds from the issuance of the exchange notes. Exchange Agent................ JPMorgan Chase Bank is serving as exchange agent in connection with the exchange offer. The address, telephone number and facsimile number of the exchange agent are set forth in "The Exchange Offer -- Exchange Agent." Effect on Holders of Outstanding Notes............. Any outstanding notes that remain outstanding after this exchange offer will continue to be subject to restrictions on their transfer. After this exchange offer, holders of outstanding notes will not, with limited exceptions, have any further rights under the exchange offer and the registration rights agreement. Any market for outstanding notes that are not exchanged could be adversely affected by the conclusion of this exchange offer. --------------------- SUMMARY OF THE EXCHANGE NOTES The following summary contains basic information about the exchange notes. The following summary does not contain all the information that may be important to you. For a more complete understanding of the exchange notes, please refer to the section of this prospectus entitled "Description of Notes and Guarantees," particularly those subsections to which we have referred you. Issuer........................ Apache Finance Canada Corporation Exchange Notes................ $350,000,000 aggregate principal amount of 4.375% Notes due 2015, which have been registered under the Securities Act. The 5 terms of the exchanges notes will be identical in all material respects to the outstanding notes, except that the exchange notes will not contain language restricting their transfer, and holders of the exchange notes generally will not be entitled to further registration rights under the exchange offer and the registration rights agreement and will not be entitled to special interest. The exchange notes issued in the exchange offer will evidence the same debt as the outstanding notes, which they will replace, and both the outstanding notes and the exchange notes are governed by the same indenture. Guarantee..................... The exchange notes will be irrevocably and unconditionally guaranteed by Apache. Maturity...................... May 15, 2015. Interest Payment Dates........ Interest will accrue from the last date on which interest was paid on the outstanding notes, or if no interest has been paid on the outstanding notes, from May 15, 2003 and will be payable semiannually on each May 15 and November 15, beginning on the first interest payment date after the issuance of the exchange notes, or if there has not been any interest payment date on the outstanding notes, on November 15, 2003. The payment of interest on exchange notes will constitute payment of any accrued but unpaid interest on the outstanding notes tendered for exchange. Ranking....................... The exchange notes will be senior unsecured obligations of Apache Canada and will rank equally and ratably with all other existing and future senior indebtedness of Apache Canada. The exchange notes will be guaranteed on a senior unsecured basis by Apache, which guarantee will rank equally and ratably with all existing and future senior indebtedness of Apache. See "Description of Notes and Guarantees -- Ranking of Notes and Guarantees." Optional Make-Whole Redemption.................... The exchange notes will be redeemable, at the option of Apache Canada, at any time, in whole or in part, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted, on a semi-annual basis, at the treasury yield plus 15 basis points, plus accrued interest to the date of redemption. Optional Tax Redemption....... If specified Canadian tax law changes require the payment of additional amounts, Apache Canada may redeem all, but not less than all, of the exchange notes at the principal amount of the notes to be redeemed, plus accrued interest to the date of redemption. Mandatory Offer to Repurchase on a Change in Control........ If a change in control, as defined in the indenture referred to below, occurs, each holder of exchange notes may elect to require Apache Canada to repurchase the holder's exchange notes. If a holder makes this election, Apache Canada must purchase the holder's exchange notes for their principal amount 6 plus accrued interest to the purchase date. See "Description of Notes and Guarantees -- Apache Canada is Obligated to Purchase Notes on a Change in Control." Covenants..................... We and Apache Canada will issue the exchange notes under the indenture dated as of November 23, 1999, among Apache, Apache Canada and JPMorgan Chase Bank, as trustee. The indenture, among other things, limits our ability and the ability of Apache Canada and our other subsidiaries, to: - incur liens; - engage in sale-leaseback transactions; and - in the case of us and Apache Canada, merge or consolidate or sell all or substantially all of our or their assets. These covenants are subject to important exceptions and qualifications that are described under "Description of Notes and Guarantees." Absence of a Public Market for the Exchange Notes............ There is no public trading market for the exchange notes and we do not intend to apply for listing of the exchange notes on any national securities exchange or for quotation of the exchange notes on any automated dealer quotation system. No assurances can be given as to the liquidity of the trading market for the exchange notes or that an active public market for the exchange notes will develop. If an active trading market does not develop, the market price and liquidity of the exchange notes may be adversely affected. Form.......................... The exchange notes will be represented by one or more permanent global exchange notes in fully registered form without interest coupons, deposited with the trustee as custodian for, and registered in the name of, a nominee of The Depository Trust Company, except in limited circumstances specified in this prospectus. 7 SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA We have provided in the tables below our selected financial and operating data. The financial information for each of the years in the three-year period ended December 31, 2001, and at December 31, 2000, 2001 and 2002, has been derived from our audited financial statements. The summary consolidated financial data for the six months ended June 30, 2003 and 2002 was derived from our unaudited financial statements that have been incorporated by reference in this prospectus and, in the opinion of management, have been prepared in a manner consistent with the audited financial statements for the three years ended December 31, 2002. Operating resulting for the six months ended June 30, 2003 are not necessarily indicative of results that may be expected for the full year. All share and per-share results have been adjusted to reflect the five percent and ten percent common stock dividends declared in 2002 and 2001, respectively. You should read the following financial information in conjunction with our consolidated financial statements and related notes that we have incorporated by reference in this prospectus.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, ------------------------------------------ --------------------------- 2000(1) 2001(2) 2002 2002 2003(4) ------------ ------------ ------------ ------------ ------------ (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) INCOME STATEMENT DATA: Total revenues(3)...... $ 2,301,978 $ 2,809,391 $ 2,559,873 $ 1,184,311 $ 2,020,965 Net income............. 713,056 723,399 554,329 226,982 583,310 Income attributable to common stock......... 693,068 703,798 543,514 218,993 580,470 Net income per common share: Basic................ 5.09 4.89 3.66 1.50 3.62 Diluted.............. 4.91 4.73 3.60 1.47 3.59 Cash dividends declared per common share..... .18 .33 .38 .19 .20 Net cash provided by operating activities........... 1,517,368 1,905,000 1,380,718 624,085 1,224,165 BALANCE SHEET DATA (AT END OF PERIOD): Working capital........ $ 76,673 $ 175,291 $ 234,546 $ 348,094 $ 209,589 Total assets........... 7,481,950 8,933,656 9,459,851 9,165,948 11,896,035 Long-term debt......... 2,193,258 2,244,357 2,158,815 2,205,246 2,349,502 Shareholders' equity... 3,754,640 4,418,483 4,924,280 4,701,754 5,999,524 Common shares outstanding.......... 142,798,134 143,958,338 151,253,212 150,989,428 161,797,486
- --------------- (1) Includes the results of the acquisitions of specified oil and gas properties from Repsol, Collins & Ware, Occidental and Phillips after January 24, 2000, June 30, 2000, August 17, 2000, and December 29, 2000, respectively. (2) Includes the results of the acquisitions of specified oil and gas properties from Repsol YPF and Fletcher Challenge Energy after March 22, 2001, and March 27, 2001, respectively. (3) As a result of the consensus on Emerging Issues Task Force Issue 00-10, "Accounting for Shipping and Handling Fees and Costs," for the year ended December 31, 2002, third party gathering and transportation costs have been reported as an operating expense instead of a reduction to revenues as previously reported. A reclassification has been made to reflect this change for the years ended December 31, 2000 and 2001, resulting in an increase in reported revenue and operating expense for those periods. The change has no impact on income attributable to common stock. For 2000 and 8 2001, the reclassification resulted in an increase in reported revenue and operating expense of $18.1 million and $32.3 million, respectively, with no impact on income attributable to common stock. (4) Includes the results of the acquisitions of specified oil and gas properties from BP after March 13, 2003 for the Gulf of Mexico properties and after April 2, 2003 for the U.K. North Sea properties.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, ------------------------------------ --------------------- 2000 2001 2002 2002 2003 ---------- ---------- ---------- --------- --------- (UNAUDITED) OPERATING DATA: Proved reserves: Oil (Mbbls)(1)................... 522,473 599,388 636,765 595,760 812,192 Natural gas (Bcf)................ 3,384 4,005 4,055 3,790 4,384 Total proved reserves (Mboe)(2)................... 1,086,418 1,266,943 1,312,538 1,227,421 1,542,866 Reserves outside North America (% of total)..................... 20% 25% 22% 23% 28% Reserve replacement ratio(3)..... 393% 244% 137% 37% 427% Reserve life index (years)(4).... 11.4 10.1 10.5 9.8 11.0 Finding and development costs per Boe(2)(5)..................... $ 5.65 $ 5.64 $ 7.04 $ 16.26 $ 6.34 Average daily production: Oil (Mbbls/day)(1)............... 122 156 161 164 194 Natural gas (MMcf/day)........... 831 1,127 1,080 1,093 1,172 Total production (Mboe/day)(2)............... 260 344 341 346 389 Average lease operating costs per Boe(2)........................... $ 2.66 $ 3.22 $ 3.71 $ 3.57 $ 4.55
- --------------- (1) Includes crude oil, condensate and natural gas liquids. (2) 6 Mcf of natural gas = 1 Boe. (3) Total reserve additions for the period, including revisions and net of property sales, divided by annual production. (4) Total proved reserves at period end divided by annual production. (5) Total capitalized costs incurred for the period, excluding capitalized interest and property sales, divided by total reserve additions for the period, including revisions. --------------------- 9 USE OF PROCEEDS Neither we nor Apache Canada will receive any proceeds from the exchange offer. The exchange offer is intended to satisfy our obligations and those of Apache Canada under the registration rights agreement entered into for the benefit of the holders of outstanding notes in connection with the initial private offering of the outstanding notes. The net proceeds that Apache Canada received from the sale of the outstanding notes on May 15, 2003, were used to repay $347,312,000 outstanding under our commercial paper program, which was utilized in connection with the previously announced purchase of properties in the North Sea and Gulf of Mexico from subsidiaries of BP p.l.c., and the balance was applied against the outstanding indebtedness under the Canadian portion of our $1.5 billion global credit facility. 10 CAPITALIZATION The following table sets forth our consolidated capitalization on a historical basis as of June 30, 2003. The table should be read in conjunction with our consolidated financial statements and related notes incorporated by reference in this prospectus.
AS OF JUNE 30, 2003 ACTUAL ------------------- (UNAUDITED) (IN THOUSANDS) Cash and Cash Equivalents................................... $ 40,999 ========== Total Debt: Apache: 7.95% notes due 2026...................................... $ 178,625 7.625% debentures due 2096................................ 149,175 7.625% notes due 2019..................................... 149,147 7.375% debentures due 2047................................ 148,008 7.7% notes due 2026....................................... 99,663 7.0% notes due 2018....................................... 148,475 6.25% notes due 2012...................................... 397,415 Money market lines of credit and commercial paper......... 121,036 Subsidiary and other obligations: Apache Finance Australia 6.5% notes due 2007.............. 169,324 Apache Finance Australia 7.0% notes due 2009.............. 99,566 Apache Finance Canada 4.375% notes due 2015............... 349,677 Apache Finance Canada 7.75% notes due 2029................ 297,035 Fletcher Notes............................................ 5,356 Apache Clearwater, Inc. .................................. 37,000 ---------- Total debt................................................ 2,349,502 ---------- Preferred Interests of Subsidiaries......................... 437,615 ---------- Shareholders' Equity: Series B preferred stock.................................. 98,387 Common stock.............................................. 207,356 Paid-in capital........................................... 4,017,437 Retained earnings......................................... 1,948,452 Treasury stock............................................ (107,302) Accumulated other comprehensive income.................... (164,806) ---------- Total shareholders' equity................................ 5,999,524 ---------- Total capitalization...................................... $8,786,641 ==========
11 RATIOS OF EARNINGS TO FIXED CHARGES Our ratios of earnings to fixed charges were as follows for the periods indicated in the table below.
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31, -------------- -------------------------------- 2003 2002 2002 2001 2000 1999 1998 ------ ----- ---- ---- ---- ---- ---- Ratio of earnings to fixed charges............ 11.30 4.56 5.52 6.71 7.41 3.03 --
Our ratios of earnings to fixed charges were computed based on: "earnings," which is the amount resulting from adding: - pretax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, - fixed charges, - amortization of capitalized interest, - distributed income of equity investees, and - our share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges, and subtracting: - interest capitalized, - preference security dividend requirements of consolidated subsidiaries, and - the minority interest in pre-tax income of subsidiaries that have not incurred fixed charges; and "fixed charges," which means the sum of the following: - interest expensed and capitalized, - amortized premiums, discounts and capitalized expenses related to indebtedness, - an estimate of the interest within rental expense, and - preference security dividend requirements of consolidated subsidiaries. Due to the $243.2 million non-cash write-down of the carrying value of our U.S. proved oil and gas properties for the year ended December 31, 1998, our 1998 earnings were inadequate to cover fixed charges by $236.8 million. THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The following is a summary of the exchange offer relating to the outstanding notes. As a summary, it does not contain all of the information you might find useful. For further information you should read the registration rights agreement and the form of letter of transmittal, copies of which has been filed as exhibits to the registration statement of which this prospectus is a part. The exchange offer is intended to satisfy our obligations under the registration rights agreement. Exchange Offer Registration Statement. Apache Canada issued the outstanding notes, and Apache issued its guarantee of the outstanding notes, on May 15, 2003. The initial purchasers of the outstanding notes have advised us that they subsequently resold the outstanding notes to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act. As a condition to the offering of the outstanding notes, we entered into a registration rights agreement dated May 15, 2003, among us, Apache Canada and the initial purchasers, pursuant to which we agreed, subject to specified circumstances, for the benefit of all 12 holders of the outstanding notes, at our own expense, unless the exchange offer would not be permitted by applicable law or SEC policy, to: - file the registration statement of which this prospectus is a part with the SEC on or prior to 90 days after the issue date of the outstanding notes, - use our reasonable best efforts to cause the registration statement to be declared effective by the SEC on or prior to 150 days after the issue date of the outstanding notes, - use our reasonable best efforts to keep the registration statement effective until the closing of the exchange offer, and - use our reasonable best efforts to issue, on or prior to 270 days after the issue date of the outstanding notes, exchange notes in exchange for all outstanding notes tendered prior thereto. Further, we agreed to keep the exchange offer open for acceptance for not less than a period of 20 business days after the date notice of the exchange offer is mailed to holders of outstanding notes or, if longer, the minimum period required under applicable law. For each outstanding note validly tendered pursuant to the exchange offer and not withdrawn, the holder of the outstanding note will receive an exchange note having a principal amount equal to that of the tendered outstanding note. Interest on each exchange note will accrue from the last date on which interest was paid on the tendered outstanding note in exchange therefor or, if no interest was paid on such outstanding note, from the issue date of the outstanding notes. In specific circumstances, we are obligated to use our reasonable best efforts to file a shelf registration statement for resales of outstanding notes and to use our reasonable best efforts to cause such shelf registration statement to be declared effective by the SEC. Transferability. Apache Canada issued the outstanding notes in a transaction exempt from the registration requirements of the Securities Act. Accordingly, the outstanding notes may not be offered or sold in the United States unless registered, or pursuant to an applicable exemption, under the Securities Act and applicable state securities laws. Based on no-action letters issued by the staff of the SEC with respect to similar transactions with third parties, we believe that the exchange notes issued pursuant to the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by holders of notes who are not our affiliates without further compliance with the registration and prospectus delivery requirements of the Securities Act, provided that: - any exchange notes to be received by the holder were acquired in the ordinary course of the holder's business; - at the time of the commencement of the exchange offer the holder is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes; - the holder is not an "affiliate" of ours, as defined in Rule 405 under the Securities Act, or, if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and - the holder did not purchase the outstanding notes directly from Apache Canada to resell pursuant to 144A or another available exemption. We have not sought, however, a no-action letter with respect to the exchange offer and we cannot assure you that the staff of the SEC would make a similar determination with respect to the exchange offer. Any holder who tenders his outstanding notes in the exchange offer with any intention of participating in a distribution of exchange notes or who is an affiliate of ours - cannot rely on the interpretation by the staff of the SEC; - will not be able to validly tender outstanding notes in the exchange offer; and 13 - must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transactions. In addition, each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it acquired the outstanding notes for its own account as the result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal accompanying this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is acting in the capacity of an "underwriter" within the meaning of Section 2(11) of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Pursuant to the registration rights agreement, we agreed to make this prospectus available to any such broker-dealer for use in connection with any such resale. See "Plan of Distribution." Shelf Registration Statement. If any of the following occurs: - if, because of any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC, the we are not permitted to effect the exchange offer; - if for any other reason the exchange offer registration statement is not declared effective within 150 calendar days following the issue date of the outstanding notes, provided that we are not then actively pursuing such effectiveness; - if for any other reason the exchange offer is not consummated within 270 calendar days after the issue date of the outstanding notes, provided that we are not then actively pursuing such consummation; - upon the written request of the initial purchasers with respect to any outstanding notes that such initial purchaser acquired directly from us; or - upon the written request of any holder of outstanding notes that either - is not permitted pursuant to applicable law, SEC rules and regulations or applicable interpretations thereof by the staff of the SEC to participate in the exchange offer, or - participates in the exchange offer and does not receive fully tradable notes pursuant to the exchange offer; then in each such case we will, at our cost: - promptly, file with the SEC, and thereafter will use our reasonable best efforts to cause to be declared effective promptly but no later than 270 calendar days after the issue date of the outstanding notes, a shelf registration statement relating to the offer and sale of the outstanding notes by the holders thereof from time to time in accordance with the methods of distribution elected by the majority of such holders participating in the shelf registration and set forth in such shelf registration statement; and - use our reasonable best efforts to keep the shelf registration statement continuously effective in order to permit the prospectus that is a part of the shelf registration statement to be usable by holders of outstanding notes for a period ending on the earliest of - two years from the date we originally issued the outstanding notes, - the date on which the outstanding notes become eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act, or - for such shorter period that will terminate when all outstanding notes covered by the shelf registration statement have been sold under the shelf registration statement or cease to be outstanding or otherwise cease to have rights to be included in the shelf registration statement. 14 We will, in the event of the filing of the shelf registration statement, provide to each holder of the outstanding notes copies of the prospectus that is a part of the shelf registration statement, notify each such holder when the shelf registration statement for the outstanding notes has become effective and take other specified action as is required to permit unrestricted resales of the outstanding notes. A holder of outstanding notes who sells such outstanding notes pursuant to the shelf registration statement generally will be: - required to be named as a selling security holder in the related prospectus; - required to deliver the prospectus to purchasers; - subject to the civil liability provisions under the Securities Act in connection with those sales; and - bound by the provisions of the registration rights agreement which are applicable to the holder (including specified indemnification obligations). In addition, each holder of the outstanding notes may be required to deliver information to be used in connection with the shelf registration statement as set forth in the registration rights agreement in order to have their outstanding notes included in the shelf registration statement and to benefit from the provisions regarding special interest. Special Interest. Apache Canada will pay special interest in respect of the outstanding notes (for each outstanding note which has not been exchanged in the exchange offer) if the exchange offer is not consummated and the shelf registration statement is not declared effective on or prior to the date that is 270 days after the issue date of the notes. The preceding event is a registration default. Apache Canada will pay special interest to each holder of outstanding notes while a registration default is continuing immediately following the occurrence of such registration default in an amount equal to 0.25% per annum of the principal amount of the outstanding notes. Following the cure of a particular registration default, the accrual of special interest with respect to such registration default will cease. TERMS OF THE EXCHANGE OFFER Upon satisfaction or waiver of all the conditions of the exchange offer, Apache Canada will accept any and all outstanding notes properly tendered and not properly withdrawn prior to the expiration date and will issue the exchange notes promptly after acceptance of the outstanding notes. See "-- Conditions to the Exchange Offer" and "-- Procedures for Tendering Outstanding Notes." Apache Canada will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes accepted in the exchange offer. As of the date of this prospectus, $350,000,000 aggregate principal amount of the 4.375% notes due 2015 are outstanding. Holders may tender some or all of their outstanding notes pursuant to the exchange offer. Outstanding notes, however, may be tendered only in integral multiples of $1,000. The exchange notes are substantially identical to the outstanding notes except that the exchange notes will not contain specified transfer restrictions, registration rights and special interest provisions. The issuance of exchange notes in exchange for outstanding notes pursuant to the exchange offer will not result in a repayment of the indebtedness of Apache Canada that is presently evidenced by the outstanding notes. The exchange notes will evidence the same debt as the outstanding notes and will be issued pursuant to, and entitled to the benefits of, the indenture pursuant to which the outstanding notes were issued and will be deemed one issue of notes, together with any outstanding notes not tendered in the exchange offer. This prospectus, together with the letter of transmittal, is being sent to all registered holders and to others believed to have beneficial interests in the outstanding notes. Holders of outstanding notes do not have any appraisal or dissenters' rights under the indenture in connection with the exchange offer. We and Apache Canada intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder. 15 For purposes of the exchange offer, Apache Canada will be deemed to have accepted validly tendered outstanding notes when, and as if, Apache Canada has given oral or written notice thereof to the exchange agent. The exchange agent will act as our agent for the purpose of distributing the exchange notes from us to the tendering holders. If Apache Canada does not accept any tendered outstanding notes because of an invalid tender, the occurrence of other events set forth in this prospectus or otherwise, Apache Canada will return the unaccepted outstanding notes, without expense, to the tendering holder thereof promptly after the expiration date. Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commission's or fees or, except as set forth below under "-- Transfer Taxes," transfer taxes with respect to the exchange of outstanding notes pursuant to the exchange offer. We or Apache Canada will pay all charges and expenses, other than applicable taxes, if any, in connection with the exchange offer. See "-- Fees and Expenses." Neither we nor Apache Canada makes any recommendation to holders of outstanding notes as to whether to tender or refrain from tendering all or any portion of their outstanding notes in the exchange offer. In addition, no one has been authorized to make any recommendation as to whether holders should tender outstanding notes in the exchange offer. Holders of outstanding notes must make their own decisions whether to tender outstanding notes in the exchange offer and, if so, the aggregate amount of outstanding notes to tender based on the holders' own financial positions and requirements. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "expiration date" shall mean 5:00 p.m., New York City time, on , , 2003, unless we and Apache Canada, in our sole discretion, extend the exchange offer, in which case the term "expiration date" shall mean the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we and Apache Canada will notify the exchange agent by oral or written notice and each registered holder by means of press release or other public announcement of any extension, in each case, prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We and Apache Canada reserve the right, in our sole discretion, to: - delay accepting any outstanding notes, - extend the exchange offer, - terminate the exchange offer if the conditions set forth below under " -- Conditions to the Exchange Offer" shall not have been satisfied, or - amend the terms of the exchange offer in any manner. We and Apache Canada will notify the exchange agent of any delay, extension, termination or amendment by oral or written notice. We and Apache Canada will additionally notify each registered holder of any amendment by means of press release or other public announcement. We and Apache Canada will give to the exchange agent written confirmation of any oral notice. EXCHANGE DATE As soon as practicable after the close of the exchange offer Apache Canada will accept for exchange all outstanding notes properly tendered and not validly withdrawn prior to 5:00 p.m., New York City time, on the expiration date in accordance with the terms of this prospectus and the letters of transmittal. CONDITIONS TO THE EXCHANGE OFFER Completion of the exchange offer is subject to the conditions that: - the exchange offer or the making of any exchange by a holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, 16 - the due tendering of outstanding notes is in accordance with the exchange offer, - each holder of outstanding notes exchanged in the exchange offer shall have represented that all exchange notes to be received by it were acquired in the ordinary course of its business and that at the time of the consummation of the exchange offer it shall have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes and shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or other appropriate form under the Securities Act available, and - no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our or Apache Canada's judgment, would reasonably be expected to impair the ability of us or Apache Canada to proceed with the exchange offer. The foregoing conditions are for our and Apache Canada's sole benefit and may be asserted by us or Apache Canada regardless of the circumstances giving rise to any such condition or may be waived by us or Apache Canada in whole or in part at any time and from time to time in our sole discretion. Our or Apache Canada's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and such right shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, we and Apache Canada will not accept for exchange any outstanding notes tendered, and no exchange notes will be issued in exchange for any such outstanding notes, if, at such time, any stop order shall be threatened by the SEC or be in effect with respect to the registration statement of which this prospectus is a part or the qualification of the indenture under the Trust Indenture Act of 1939, as amended. The exchange offer is not conditioned on any minimum aggregate principal amount of outstanding notes being tendered for exchange. CONSEQUENCES OF FAILURE TO EXCHANGE Any outstanding notes not tendered pursuant to the exchange offer will remain outstanding and continue to accrue interest at the rate of 4.375% (that is, without special interest). The outstanding notes will remain "restricted securities" within the meaning of the Securities Act. Accordingly, prior to the date that is two years after the later of the issue date of the outstanding notes and the last date on which we or any of our affiliates was the owner of the outstanding notes, the outstanding notes may be resold only - to us; - to a person who the seller reasonably believes is a "qualified institutional buyer" purchasing for its own account or for the account of another "qualified institutional buyer" in compliance with the resale limitations of Rule 144A; - to an "institutional accredited investor" that, prior to the transfer, furnishes to the trustee a written certification containing representations and agreements relating to the restrictions on transfer of the notes (the form of this letter can be obtained from the trustee); - pursuant to the limitations on resale provided by Rule 144 under the Securities Act; - pursuant to the resale provisions of Rule 904 of Regulation S under the Securities Act; - pursuant to an effective registration statement under the Securities Act; or - pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to compliance with applicable state securities laws. As a result, the liquidity of the market for non-tendered outstanding notes could be adversely affected upon completion of the exchange offer. The foregoing restrictions on resale will no longer apply after the 17 later of the second anniversary of the issue date of the outstanding notes or the purchase of the outstanding notes from us or our affiliate. FEES AND EXPENSES We will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by our officers and employees. Expenses incurred in connection with the exchange offer will be paid by us. Such expenses include, among others, the fees and expenses of the trustee and the exchange agent, accounting and legal fees, printing costs and other miscellaneous fees and expenses. ACCOUNTING TREATMENT We will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize the expenses of the exchange offer as additional interest expense over the term of the exchange notes. PROCEDURES FOR TENDERING OUTSTANDING NOTES The tender of outstanding notes pursuant to any of the procedures set forth in this prospectus and in the letter of transmittal will constitute a binding agreement between the tendering holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. The tender of outstanding notes will constitute an agreement to deliver good and marketable title to all tendered outstanding notes prior to the expiration date free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind. Except as provided in "-- Guaranteed Delivery Procedures," unless the outstanding notes being tendered are deposited by you with the exchange agent prior to the expiration date and are accompanied by a properly completed and duly executed letter of transmittal, we may, at our option, reject the tender. Issuance of exchange notes will be made only against deposit of tendered outstanding notes and delivery of all other required documents. Notwithstanding the foregoing, DTC participants tendering through its Automated Tender Offer Program ("ATOP") will be deemed to have made valid delivery where the exchange agent receives an agent's message prior to the expiration date. Accordingly, to properly tender outstanding notes, the following procedures must be followed: Notes held through a Custodian. Each beneficial owner holding outstanding notes through a DTC participant must instruct the DTC participant to cause its outstanding notes to be tendered in accordance with the procedures set forth in this prospectus. Notes held through DTC. Pursuant to an authorization given by DTC to the DTC participants, each DTC participant holding outstanding notes through DTC must - electronically transmit its acceptance through ATOP, and DTC will then edit and verify the acceptance, execute a book-entry delivery to the exchange agent's account at DTC and send an agent's message to the exchange agent for its acceptance, or - comply with the guaranteed delivery procedures set forth below and in a notice of guaranteed delivery. See "-- Guaranteed Delivery Procedures -- Notes held through DTC." Promptly after the date of this prospectus, the exchange agent will establish an account at DTC for purposes of the exchange offer with respect to outstanding notes held through DTC. Any financial institution that is a DTC participant may make book-entry delivery of interests in outstanding notes into the exchange agent's account through ATOP. However, although delivery of interests in the outstanding notes may be effected through book-entry transfer into the exchange agent's account through ATOP, an agent's message in connection with such book-entry transfer, and any other required documents, must be, 18 in any case, transmitted to and received by the exchange agent at its address set forth under "-- Exchange Agent," or the guaranteed delivery procedures set forth below must be complied with, in each case, prior to the expiration date. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The confirmation of a book-entry transfer into the exchange agent's account at DTC as described above is referred to herein as a "Book-Entry Confirmation." The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent and forming a part of the book-entry confirmation, which states that DTC has received an express acknowledgment from each DTC participant tendering through ATOP that such DTC participants have received a letter of transmittal and agree to be bound by the terms of the letter of transmittal and that we may enforce such agreement against such DTC participants. Cede & Co., as the holder of the global note, will tender a portion of each global note equal to the aggregate principal amount of outstanding notes for which instructions to tender are given by DTC participants. By tendering, each holder and each DTC participant will represent to us that, among other things, it is: - not our affiliate; - not a broker-dealer tendering outstanding notes acquired directly from us for its own account; - acquiring the exchange notes in its ordinary course of business; and - not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the exchange notes. In addition, each broker-dealer that is to receive exchange notes for its own account in exchange for outstanding notes must represent that such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of the exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of Section 2(11) of the Securities Act. See "Plan of Distribution." Unless waived by us, we will not accept any alternative, conditional, irregular or contingent tenders. By executing a letter of transmittal or transmitting an acceptance through ATOP, as the case may be, each tendering holder waives any right to receive any notice of the acceptance for purchase of its outstanding notes. We will resolve all questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered outstanding notes, and such determination will be final and binding. We reserve the absolute right to reject any or all tenders that are not in proper form or the acceptance of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any condition to the exchange offer and any irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders must be cured within such time as we shall determine. We, along with the exchange agent, shall be under no duty to give notification of defects in such tenders and shall not incur liabilities for failure to give such notification. Tenders of outstanding notes will not be deemed to have been made until such irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. 19 If any letter of transmittal, endorsement, bond power, power of attorney or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and, unless waived by us, proper evidence satisfactory to us, in our sole discretion, of that person's authority must be submitted. A beneficial owner of outstanding notes that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian is urged to contact that entity promptly if that beneficial holder wishes to participate in the exchange offer. LETTERS OF TRANSMITTAL AND OUTSTANDING NOTES MUST BE SENT ONLY TO THE EXCHANGE AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OUTSTANDING NOTES TO US, APACHE CANADA OR DTC. The method of delivery of outstanding notes, letters of transmittal, any required signature guaranties and all other required documents, including delivery through DTC and any acceptance through ATOP, is at the election and risk of the persons tendering and delivering acceptances or letters of transmittal and, except as otherwise provided in the applicable letter of transmittal, delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, it is suggested that the holder use properly insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the expiration date to permit delivery to the exchange agent prior to the expiration date. GUARANTEED DELIVERY PROCEDURES Notes held through DTC. DTC participants holding outstanding notes through DTC who wish to cause their outstanding notes to be tendered, but who cannot transmit their acceptances through ATOP prior to the expiration date, may cause a tender to be effected if: - guaranteed delivery is made by or through a firm or other entity identified in Rule 17Ad-15 under the Exchange Act, including the following, which we call "eligible institutions": - a bank; - a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; - a credit union; - a national securities exchange, registered securities association or clearing agency; or - a savings institution that is a participant in a Securities Transfer Association recognized program; - prior to the expiration date, the exchange agent receives from any of the above institutions a properly completed and duly executed notice of guaranteed delivery, by mail, hand delivery, facsimile transmission or overnight courier, substantially in the form provided with this prospectus; and - book-entry confirmation and an agent's message in connection therewith are received by the exchange agent within three New York Stock Exchange trading days after the expiration date. Notes held by Holders. Holders who wish to tender their outstanding notes but - whose outstanding notes are not immediately available and will not be available for tendering prior to the expiration date; or - who cannot deliver their outstanding notes, the letter of transmittal, or any other required documents to the exchange agent prior to the expiration date, 20 may effect a tender if: - the tender is made by or through any of the above-listed eligible institutions; - prior to the expiration date, the exchange agent receives from any above-listed eligible institutions a properly completed and duly executed notice of guaranteed delivery, whether by mail, hand delivery, facsimile transmission or overnight courier, substantially in the form provided with this prospectus; and - a properly completed and executed letter of transmittal, as well as the certificate(s) representing all tendered outstanding notes in proper form for transfer, and all other documents required by the letter of transmittal, are received by the exchange agent within three New York Stock Exchange trading days after the expiration date. WITHDRAWAL RIGHTS You may withdraw tenders of outstanding notes, or any portion of your outstanding notes, in integral multiples of $1,000 principal amount due at the stated maturity, at any time prior to 5:00 p.m., New York City time, on the expiration date. Any outstanding notes properly withdrawn will be deemed to be not validly tendered for purposes of the exchange offer. Notes held through DTC. DTC participants holding outstanding notes who have transmitted their acceptances through ATOP may, prior to 5:00 p.m., New York City time, on the expiration date, withdraw the instruction given thereby by delivering to the exchange agent, at its address set forth under "-- Exchange Agent," a written, telegraphic or facsimile notice of withdrawal of such instruction. Such notice of withdrawal must contain the name and number of the DTC participant, the principal amount due at the stated maturity of outstanding notes to which such withdrawal relates and the signature of the DTC participant. Receipt of such written notice of withdrawal by the exchange agent effectuates a withdrawal. Notes held by Holders. Holders may withdraw their tender of outstanding notes, prior to 5:00 p.m., New York City time, on the expiration date, by delivering to the exchange agent, at its address set forth under "-- Exchange Agent," a written, telegraphic or facsimile notice of withdrawal. Any such notice of withdrawal must: - specify the name of the person who tendered the outstanding notes to be withdrawn; - contain a description of the outstanding notes to be withdrawn and identify the certificate number or numbers shown on the particular certificates evidencing such outstanding notes and the aggregate principal amount due at the stated maturity represented by such outstanding notes; and - be signed by the holder of such outstanding notes in the same manner as the original signature on the letter of transmittal by which such outstanding notes were tendered (including any required signature guaranties), or be accompanied by - documents of transfer in a form acceptable to us, in our sole discretion; and - a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such holder. If the outstanding notes to be withdrawn have been delivered or otherwise identified to the exchange agent, a signed notice of withdrawal is effective immediately upon written, telegraphic or facsimile notice of withdrawal even if physical release is not yet effected. All signatures on a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program; provided, however, that signatures on the notice of withdrawal need not be guaranteed if the outstanding notes being withdrawn are held for the account of any of the institutions listed above under "-- Guaranteed Delivery Procedures." 21 A withdrawal of an instruction or a withdrawal of a tender must be executed by a DTC participant or a holder of outstanding notes, as the case may be, in the same manner as the person's name appears on its transmission through ATOP or letter of transmittal, as the case may be, to which such withdrawal relates. If a notice of withdrawal is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the revocation appropriate evidence of authority to execute the notice of withdrawal. A DTC participant or a holder may withdraw an instruction or a tender, as the case may be, only if such withdrawal complies with the provisions of this prospectus. All questions as to the validity, form and eligibility, including time of receipt, or withdrawal notices will be determined by us, in our sole discretion, which determination shall be final and binding on all parties. Neither we, Apache Canada, the exchange agent nor any other person is under any duty to give any notification of any irregularities in any notice of withdrawal nor will those parties incur any liability for failure to give that notice. A withdrawal of a tender of outstanding notes by a DTC participant or a holder, as the case may be, may be rescinded only by a new transmission of an acceptance through ATOP or execution and delivery of a new letter of transmittal, as the case may be, in accordance with the procedures described herein. EXCHANGE AGENT JPMorgan Chase Bank has been appointed as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows: By Mail: (Registered or Certified Mail is recommended) JPMorgan Chase Bank, as Exchange Agent ITS Bond Events P.O. Box 2320 Dallas, TX 75221 Attention: Frank Ivins By hand or by overnight courier: JPMorgan Chase Bank, as Exchange Agent ITS Bond Events 2001 Bryan Street 9th Floor Dallas, TX 75201 Attention: Frank Ivins By Facsimile Transmission: (For Eligible Institutions only) (214) 468-6494 Attention: Frank Ivins To confirm facsimile: (214) 468-6464 Telephone Inquiries: (800) 275-2048 DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. The exchange agent also acts as trustee under the Indenture. 22 TRANSFER TAXES Holders of outstanding notes who tender their outstanding notes for exchange notes will not be obligated to pay any transfer taxes in connection therewith, except that holders who instruct us to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon. OTHER Participation in the exchange offer is voluntary. You should carefully consider whether to accept the exchange offer. You should consult your financial and tax advisors in making your own decision on what action to take. We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes. DESCRIPTION OF NOTES AND GUARANTEES GENERAL Apache Canada issued the outstanding notes and will issue the exchange notes as one separate series under the indenture dated as of November 23, 1999, among Apache Canada, Apache and JPMorgan Chase Bank, as trustee. The exchange notes will be issued in the form of one or more global notes registered in the name of The Depository Trust Company ("DTC") or its nominee, as described under "-- Book-Entry, Delivery and Form." The following description is a summary of the material provisions of the exchange notes, the guarantees and the indenture. The terms of the exchange notes and guarantees are substantially identical in all material respects to the outstanding notes and guarantees, except that the exchange notes and guarantees will have been registered under the Securities Act and, therefore, will not bear legends restricting their transfer and will not contain specified provisions providing for additional interest under specified circumstances described in the registration rights agreement, the provisions of which will terminate upon the consummation of the exchange offer. This description does not restate the indenture in its entirety. We and Apache Canada urge you to read the indenture because it, and not this description, defines your rights as holders of the exchange notes. Unless otherwise stated, all references to "issuer" mean Apache Canada and all references to "guarantor" mean Apache, the term "notes" refers to both the outstanding notes and the exchange notes and the term "guarantee" refers to our guarantee of the outstanding notes and the exchange notes. The notes are senior unsecured obligations of Apache Canada. We will irrevocably and unconditionally guarantee the notes as to principal, premium, if any, interest and additional amounts, if any. The notes are redeemable as described below under "-- Optional Redemption" and "-- Redemption for Taxation Reasons." The notes are not entitled to the benefit of any sinking fund. If a change in control, as defined in the indenture, occurs, each holder of notes may elect to require Apache Canada to repurchase the holder's notes. If a holder makes this election, Apache Canada must purchase the holder's notes for their principal amount plus accrued interest to the purchase date. See "-- Apache Canada is Obligated to Purchase Notes on a Change in Control." With the exceptions and pursuant to the requirements set forth in the indenture, we and Apache Canada may discharge our and its obligations under the indenture with respect to the notes as described in "-- Discharge, Defeasance and Covenant Defeasance." Other than as described below under "-- The Indenture Limits Our and Apache Canada's Ability to Incur Liens," "-- The Indenture Limits Our and Apache Canada's Ability to Engage in Sale/Leaseback 23 Transactions" and "-- Apache Canada is Obligated to Purchase Notes on a Change in Control," the indenture does not limit our or Apache Canada's ability to incur indebtedness or afford holders of securities protection if our credit quality declines or if we are involved in a takeover, recapitalization or highly leveraged or similar transaction. Apache Canada will issue the notes in denominations of $1,000 or integral multiples of $1,000. PRINCIPAL, MATURITY AND INTEREST The notes will mature on May 15, 2015. Apache Canada may issue and sell additional principal amounts of the notes or other debt securities in the future without the consent of the holders of the notes. Any additional notes, together with these notes, will constitute a single series of notes under the indenture. Interest on the notes will accrue at the rate of 4.375% per year and will be payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2003. Apache Canada will make each interest payment to the person in whose name the notes are registered at the close of business on the immediately preceding May 1 or November 1, as the case may be, whether or not that date is a business day. Interest on the notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 15, 2003, and will be computed on the basis of a 360-day year comprised of twelve 30-day months. If any interest payment date, maturity date or redemption date falls on a day that is not a business day, the payment will be made on the next business day and, unless we and Apache Canada default on the payment, no interest will accrue for the period from and after the interest payment date, maturity date or redemption date. As used in this prospectus, the term "business day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York. RANKING The notes will be unsecured obligations of Apache Canada and will rank equally with all other unsecured senior indebtedness of Apache Canada, and the guarantees will be unsecured obligations of Apache and will rank equally with all other unsecured senior indebtedness of Apache. At July 31, 2003, Apache had $2.4 billion of unsecured senior indebtedness outstanding on a consolidated basis. Dividend and other distributions to us from our various subsidiaries may be subject to statutory, contractual and other restrictions (including, without limitation, exchange controls that may be applicable to foreign subsidiaries). The rights of our creditors to participate in the assets of any subsidiary upon that subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent that we may ourselves be a creditor with recognized claims against the subsidiary. The claims of holders under the guarantees will be effectively subordinated to the claims of creditors of our subsidiaries other than, in the case of the notes, Apache Canada. The indenture does not restrict the amount of indebtedness that we, Apache Canada or our other subsidiaries may incur. GUARANTEES We will irrevocably and unconditionally guarantee to each holder of the notes issued by Apache Canada and authenticated and delivered by the trustee the due and punctual payment of the principal of, any premium and interest on, and any additional amounts payable with respect to, the notes, when and as it becomes due and payable, whether at maturity, upon acceleration, by call for redemption, repayment or otherwise in accordance with the terms of the notes and of the indenture. We will (a) agree that, if an event of default occurs under the notes, our obligations under the guarantees will be as if we had issued the notes, and will be enforceable irrespective of any invalidity, irregularity or unenforceability of the notes or the indenture or any supplement thereto and (b) waive our right to require the trustee or the holders to 24 pursue or exhaust their legal or equitable remedies against Apache Canada before exercising their rights under the guarantees. OPTIONAL REDEMPTION The notes are redeemable as a whole or in part, at the option of Apache Canada at any time, at a redemption price equal to the greater of (i) 100 percent of their principal amount or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 15 basis points, plus, in each case, accrued interest to the date of redemption. Apache Canada will, however, pay the interest installment due on any interest payment date that occurs on or before a redemption date to the holders of the notes as of the close of business on the record date immediately preceding that interest payment date. "Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by the Reference Treasury Dealers or Dealer as having a maturity comparable to the remaining term of the notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the trustee obtains fewer than four but more than one such Reference Treasury Dealer Quotations, the average of all such Quotations or (iii) or if the trustee obtains only one such Referenced Treasury Dealer Quotation, such quotation. "Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of the principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding such redemption date. "Reference Treasury Dealer" means each of (i) Banc of America Securities LLC and Deutsche Bank Securities Inc. (or their respective affiliates that are Primary Treasury Dealers), and their respective successors; provided, however, that if either of the foregoing ceases being a U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), we may substitute another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer(s) selected by the trustee after consultation with us. Holders of notes to be redeemed will be given notice of redemption, at their addresses as set forth in the security register for the notes, at least 30 and not more than 60 days prior to the date fixed for redemption. If fewer than all of the notes are to be redeemed, the trustee will select the particular notes or portions thereof for redemption from the outstanding notes not previously called, pro rata or by lot or in such other manner as the trustee deems fair and appropriate. Unless Apache Canada defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the notes or portion thereof called for redemption. Except as noted above and in "-- Redemption for Taxation Reasons," the notes are not redeemable prior to maturity and will not be subject to any sinking fund. PAYMENT AND PAYING AGENTS; EXCHANGE AND TRANSFERS The notes will be exchangeable, transfers of the notes will be registrable, and principal of and premium, if any, and interest on the notes will be payable, at the corporate trust office of the trustee at 25 4 New York Plaza, 15th Floor, New York, New York 10004; provided that payment of interest on an interest payment date may, at Apache Canada's option, be made by check mailed to the address of the person entitled thereto as it appears in the security register or by transfer to an account maintained by the payee with a bank located in the United States. Payments of principal, premium, if any, and interest (and additional amounts, if any) in respect of the global notes (as defined below) will be made to DTC in immediately available funds, while disbursement of such payments to owners of beneficial interests in the global notes will be made in accordance with the procedures of DTC and its participants in effect from time to time. If a redemption occurs, neither we nor Apache Canada will be required to: - issue, register the transfer of or exchange notes during a period beginning at the opening of business 15 days before any selection of notes to be redeemed and ending at the close of business on the day of mailing of the relevant notice of redemption; or - register the transfer of or exchange any note, or portion thereof, called for redemption, except the unredeemed portion of any note being redeemed in part. Neither we, Apache Canada nor the trustee will impose any service charge for any transfer or exchange of a note; however, we or Apache Canada may ask you to pay any taxes or other governmental charges in connection with a transfer or exchange of notes. All notes will be issued only in fully registered form without coupons in denominations of $1,000 and any integral multiples of $1,000. All notes in certificated form transferred to institutional accredited investors will require a minimum purchase of $250,000 aggregate principal amount of the notes. THE INDENTURE LIMITS OUR AND APACHE CANADA'S ABILITY TO INCUR LIENS Nothing in the indenture or the notes will in any way limit the amount of indebtedness or securities which we, Apache Canada or our other subsidiaries, as defined in the indenture, may incur or issue. The indenture provides that none of us, Apache Canada or any of our other subsidiaries may issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed secured by a mortgage, lien, pledge, security interest or other encumbrance -- defined in the indenture as "liens" -- upon any of our or its property unless we provide that any and all notes then outstanding shall be secured by a lien equally and ratably with any and all other obligations secured by the lien. The restrictions on liens will not, however, apply to: - liens existing on the date of the indenture or provided for under the terms of agreements existing on the date of the indenture; - liens securing all or part of the cost of exploring, producing, gathering, processing, marketing, drilling or developing any of our or our subsidiaries' properties, or securing indebtedness incurred to provide funds therefor or indebtedness incurred to finance all or part of the cost of acquiring, constructing, altering, improving or repairing any property or assets, or improvements used in connection with such property, or securing indebtedness incurred to provide funds therefor; - liens securing only indebtedness owed by one of our subsidiaries to us, Apache Canada or to one or more of our other subsidiaries; - liens on the property of any corporation or other entity existing at the time it becomes our subsidiary; - liens on any property to secure indebtedness incurred in connection with the construction, installation or financing of pollution control or abatement facilities or other forms of industrial revenue bond financing or indebtedness issued or guaranteed by the United States or any state or any department, agency or instrumentality of either or indebtedness issued to or guaranteed for the benefit of a foreign government or any state or any department, agency or instrumentality of either or an international finance agency or any division or department thereof, including the World Bank, the International Finance Corp. and the Multilateral Investment Guarantee Agency; 26 - any extension, renewal or replacement or successive extensions, renewals or replacements of any lien referred to in the foregoing clauses that existed on the date of the indenture; - other "ordinary course liens," as defined in the indenture, incurred in the ordinary course of business; or - liens which secure "limited recourse indebtedness," as defined in the indenture. In addition, the following types of transactions, among others, shall not be deemed to create indebtedness secured by liens: - the sale, granting of liens with respect to or other transfer of crude oil, natural gas or other petroleum hydrocarbons in place for a period of time until, or in an amount that, the transferee will receive as a result of the transfer a specified amount of money or of crude oil, natural gas or other petroleum hydrocarbons; - the sale or other transfer of any other interest in property of the character commonly referred to as a production payment, overriding royalty, forward sale or similar interest; and - the granting of liens required by any contract or statute in order to permit us or one of our subsidiaries to perform any contract or subcontract made by it with or at the request of the U.S. government or any foreign government or international finance agency, any state or any department thereof, or any agency or instrumentality of either, or to secure partial, progress, advance or other payments to us or one of our subsidiaries by any of these entities pursuant to the provisions of any contract or statute. Notwithstanding the limitations on liens described above, we, Apache Canada and any one or more of our other subsidiaries may issue, assume or guarantee the following indebtedness secured by liens on assets without regard to the limitations described above: indebtedness in any aggregate principal amount that, together with the aggregate outstanding principal amount of all our other indebtedness and indebtedness of any of our subsidiaries so secured (excluding indebtedness secured by the permitted liens described above), and the aggregate amount of sale/leaseback transaction obligations that would otherwise be subject to the limitations on sale/leaseback transactions described below, does not at the time such indebtedness is incurred exceed 10% of our consolidated net worth as shown on our most recent audited consolidated balance sheet. THE INDENTURE LIMITS OUR AND APACHE CANADA'S ABILITY TO ENGAGE IN SALE/LEASEBACK TRANSACTIONS Neither we, Apache Canada nor any of our other subsidiaries will enter into any arrangement with any person, other than us or one of our subsidiaries, to lease any property to us, Apache Canada or a subsidiary of ours for more than three years. For the restriction to apply, we or one of our subsidiaries must sell or plan to sell the property to the person leasing it to us or our subsidiary or to another person to which funds have been or are to be advanced on the security of the leased property. The limitation does not apply where: - either we, Apache Canada or our other subsidiaries would be entitled to create debt secured by a lien on the property to be leased in a principal amount equal to or exceeding the value of that sale/leaseback transaction; - since the date of the indenture and within a period commencing six months before the consummation of that arrangement and ending six months after the consummation of the arrangement, we, Apache Canada or our other subsidiaries have expended or will expend for any property -- including amounts expended for the acquisition, exploration, drilling or development of the property, and for additions, alterations, improvements and repairs to the property -- an amount equal to all or a portion of the net proceeds of that arrangement and we, Apache Canada or our other subsidiaries designate that amount as a credit against that arrangement, with any amount not being so designated to be applied as set forth in the next item; or 27 - during or immediately after the expiration of the 12 months after the effective date of that transaction, we or Apache Canada apply to the voluntary defeasance, redemption or retirement of the notes and its other senior indebtedness, as defined in the indenture, an amount equal to the greater of the net proceeds of the sale or transfer of the property leased in that transaction and the fair value of the property at the time of entering into the transaction, in either case adjusted to reflect the remaining term of the lease and any amount we utilize as set forth in the prior item. The amount will be reduced by the principal amount of other senior indebtedness we voluntarily retired within that 12-month period. THE INDENTURE INCLUDES EVENTS OF DEFAULT Any one of the following events will constitute an "event of default" under the indenture with respect to the notes: - if we or Apache Canada fail to pay any interest on the notes (or additional amounts, if any, in respect thereof) when due, and the failure continues for 30 days; - if we or Apache Canada fail to pay principal of or any premium on the notes (or additional amounts, if any, in respect thereof) when due and payable, either at maturity or otherwise; - if we or Apache Canada fail to perform or breach any of the other covenants or warranties in the indenture or the notes -- other than a covenant or warranty included in the indenture solely for the benefit of a series of securities other than the notes -- and that breach or failure continues for 60 days after written notice as provided in the indenture; - if any of our, Apache Canada's or any of our other subsidiaries' indebtedness, as defined in the indenture, in excess of an aggregate of $25,000,000 in principal amount is accelerated under any event of default as defined in any mortgage, indenture or instrument and the acceleration has not been rescinded or annulled within 30 days after written notice as provided in the indenture specifying the event of default and requiring us or Apache Canada to cause that acceleration to be rescinded or annulled; - if we, Apache Canada or any of our other subsidiaries fail to pay, bond or otherwise discharge within 60 days of entry, a judgment, court order or uninsured monetary damage award against us or them in excess of an aggregate of $25,000,000 which is not stayed on appeal or otherwise being appropriately contested in good faith; and - specified events of voluntary or involuntary bankruptcy, insolvency or reorganization involving us, Apache Canada or any of our other subsidiaries. If an event of default with respect to the notes, other than an event of default described above pertaining to events of bankruptcy, insolvency or reorganization, occurs and is continuing, either the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes may declare the principal amount of the notes to be due and payable immediately. At any time after a declaration of acceleration has been made, but before a judgment or decree for payment of money has been obtained by the trustee, and subject to applicable law and other provisions of the indenture, the holders of a majority in aggregate principal amount of the notes may, under some circumstances, rescind and annul the acceleration. If an event of default described above pertaining to events of bankruptcy, insolvency or reorganization occurs, the principal amount and accrued interest will become immediately due and payable without any declaration or other act by the trustee or any holder. Within 90 days after the occurrence of any default with respect to the notes, the trustee must transmit notice of the default to the holders of the notes unless the event of default has been cured or waived. However, except in the case of a payment default, the trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors or responsible officers of the trustee has in good faith determined that the withholding of the notice is in the interest of the holders of the notes. 28 If an event of default occurs and is continuing with respect to the notes, the trustee may in its discretion proceed to protect and enforce its rights and the rights of the holders of the notes by all appropriate judicial proceedings. Subject to the duty of the trustee during any default to act with the required standard of care, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders of the notes, unless the holders offer the trustee reasonable indemnity. Subject to indemnifying the trustee, and subject to applicable law and other provisions of the indenture, the holders of a majority in aggregate principal amount of the outstanding notes may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the notes. APACHE CANADA IS OBLIGATED TO PURCHASE NOTES ON A CHANGE IN CONTROL If a change in control, as defined in the indenture, occurs, Apache Canada must mail within 15 days a written notice regarding the change in control to the trustee and to every holder of the notes. The notice must also be published at least once in an authorized newspaper, as defined in the indenture, and must state: - the events causing the change in control and the date of the change in control; - the date by which notice of the change in control is required by the indenture to be given; - the date, 35 business days after the occurrence of the change in control, by which Apache Canada must purchase the notes it is obligated to purchase pursuant to the selling holder's exercise of rights on change in control; - the price Apache Canada must pay for the notes it is obligated to purchase; - the name and address of the trustee; - the procedure for surrendering notes to the trustee or other designated office or agency for payment; - a statement of Apache Canada's obligation to make prompt payment on proper surrender of the notes; - the procedure for holders' exercise of rights of sale of the notes; and - the procedures by which a holder may withdraw the notice after it is given. After Apache Canada gives this notice it will be obligated, at the election of each holder, to purchase those notes. Under the indenture, a change in control is deemed to have occurred when: - any event requiring the filing of any report under or in response to Schedule 13D or 14D-1 pursuant to the Securities Exchange Act of 1934 disclosing beneficial ownership of either 50% or more of our common stock then outstanding or 50% or more of the voting power of our voting stock then outstanding; - the completion of any sale, transfer, lease, or conveyance of our properties and assets substantially as an entirety to any person or persons that is not our subsidiary, as those terms are defined in the indenture; or - the completion of a consolidation or merger of us with or into any other person or entity in a transaction in which either we are not the sole surviving corporation or our common stock existing before the transaction is converted into cash, securities or other property and those exchanging our common stock do not, as a result of the transaction, receive either 75% or more of the survivor's common stock or 75% or more of the voting power of the survivor's voting stock. Apache Canada will not purchase any notes if there has occurred and is continuing an event of default under the indenture, other than default in payment of the purchase price payable for the notes upon change in control. In connection with any purchase of the notes after a change in control, we and 29 Apache Canada will comply with all federal and state securities laws, including, specifically, Rule 13e-4, if applicable, under the Securities Exchange Act of 1934, and any related Schedule 13E-4 required to be submitted under that rule. DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE We or Apache Canada may discharge our or its obligations to holders of the notes that have not already been delivered to the trustee for cancellation and that: - have become due and payable; - will become due and payable within one year; or - are scheduled for redemption within one year. To discharge the obligations with respect to the notes, we or Apache Canada must deposit with the trustee, in trust, an amount of funds in U.S. dollars sufficient to pay the entire amount of principal of, and any premium or interest on, those notes to the date of the deposit if those notes have become due and payable or to the maturity of the notes, as the case may be. The indenture provides that we or Apache Canada may elect either - to defease and be discharged from any and all obligations with respect to the notes, which is referred to as "legal defeasance"; or - to be released from the obligations with respect to the notes under the covenants described in "-- The Indenture Limits Our and Apache Canada's Ability to Incur Liens" and "-- The Indenture Limits Our and Apache Canada's Ability to Engage in Sale/Leaseback Transactions" above, which is referred to as "covenant defeasance." In the case of discharge or legal defeasance, we and Apache Canada will still retain some obligations in respect of the notes, including the obligations: - to pay additional amounts, if any, upon the occurrence of specified events of taxation, assessment or governmental charge with respect to payments on the notes; - to register the transfer or exchange of the notes; - to replace temporary or mutilated, destroyed, lost or stolen notes; and - to maintain an office or agency with respect to the notes and to hold moneys for payment in trust. After a covenant defeasance, any omission to comply with the obligations or covenants that have been defeased shall not constitute a default or an event of default with respect to the notes. To elect either legal defeasance or covenant defeasance we or Apache Canada must deposit with the trustee, in trust, an amount, in U.S. dollars or in government obligations, as defined below, or both, applicable to the notes which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of and any premium and interest (and additional amounts, if any) on the notes on their scheduled due dates. In addition, we or Apache Canada can only elect legal defeasance or covenant defeasance if, among other things: - the applicable defeasance does not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which we or Apache Canada are a party or by which we or Apache Canada are bound; - no default or event of default with respect to the notes shall have occurred and be continuing on the date of the establishment of the trust; and 30 - we or Apache Canada have delivered to the trustee an opinion of counsel to the effect that the holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance had not occurred, and the opinion of counsel, in the case of legal defeasance, must refer to and be based upon a letter ruling of the Internal Revenue Service received by us, a Revenue Ruling published by the Internal Revenue Service or a change in applicable U.S. federal income tax law occurring after the date of the indenture. The indenture defines government obligations as securities which are not callable or redeemable at the option of the issuer or issuers and are: - direct obligations of the United States; or - obligations of a person or entity controlled or supervised by and acting as an agency or instrumentality of the United States, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or that other government or governments. Government obligations also include a depository receipt issued by a bank or trust company as custodian with respect to any government obligation described above or a specific payment of interest on or principal of or any other amount with respect to any government obligation held by that custodian for the account of the holder of the depository receipt, as long as, except as required by law, that custodian is not authorized to make any deduction from the amount payable to the holder of the depository receipt from any amount received by the custodian with respect to the government obligation or the specific payment of interest on or principal of or any other amount with respect to the government obligation evidenced by the depository receipt. If we or Apache Canada effect a covenant defeasance with respect to the notes and the notes are declared due and payable because of the occurrence of any event of default other than an event of default with respect to which there has been covenant defeasance, the government obligations on deposit with the trustee will be sufficient to pay amounts due on the notes at the time of the stated maturity but may not be sufficient to pay amounts due on the notes at the time of the acceleration resulting from the event of default. We and Apache Canada, however, would remain liable for payment of the amounts due at the time of acceleration. Under the indenture, we and Apache Canada are required to furnish to the trustee annually a statement as to our and Apache Canada's performance of our and Apache Canada's obligations under the indenture and as to any default in performance. We and Apache Canada are also required to deliver to the trustee, within five days after occurrence thereof, written notice of any event which after notice or lapse of time or both would constitute an event of default. MODIFICATION AND WAIVER We, Apache Canada and the trustee may, without the consent of holders, modify provisions of the indenture for specified purposes that do not materially adversely affect the interests of the holders of outstanding notes. We, Apache Canada and the trustee may modify the indenture or waive other provisions of the indenture with respect to the notes only with the consent of the holders of not less than two-thirds in aggregate principal amount of the notes. The provisions of the indenture, however, may not be waived or modified without the consent of the holder of each note affected thereby if the modification or waiver would: - change the stated maturity of the principal of, or premium, if any, on, or any installment of principal, if any, of or interest on, or any additional amounts payable with respect to, the notes; - reduce the principal amount of, or premium or interest on, or any additional amounts payable with respect to, the notes; 31 - change the coin or currency in which any note or any premium or any interest on the notes or any additional amounts payable with respect to the notes is payable; - impair the right to institute suit for the enforcement of any payment on or after the stated maturity of the notes or, in the case of redemption, on or after the redemption date or, in the case of a change in control, after the change in control purchase date; - reduce the percentage and principal amount of the outstanding notes, the consent of whose holders is required in order to take specified actions; - change any of our or Apache Canada's obligations to maintain an office or agency in the places and for the purposes required by the indenture; - modify or affect in any manner adverse to the holders of the notes the terms and conditions of our or Apache Canada's obligations regarding the due and punctual payment of principal or, any premium on or all interest on, or additional amounts in respect of, the notes; or - modify any of the above provisions. The holders of at least a majority in aggregate principal amount of notes may, on behalf of the holders of all notes, waive our or Apache Canada's compliance with specified restrictive provisions of the indenture with respect to the notes. The holders of not less than a majority in aggregate principal amount of the notes may, on behalf of all holders of the notes, waive any past default and its consequences under the indenture with respect to the notes, except: - a payment default with respect to the notes; or - a default of a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of the notes. ASSUMPTION OF THE OBLIGATIONS UNDER THE NOTES BY APACHE Under the indenture, we may, at our option, assume Apache Canada's obligations under the notes if: - we expressly assume the obligations in an assumption agreement or supplemental indenture that is executed and delivered to the trustee in a form that is acceptable to the trustee; - no event of default and no event that, after a notice or the lapse of time or both, would become an event of default occurs and is continuing after giving effect to our assuming the obligations; and - we expressly agree in an assumption agreement or supplemental indenture to indemnify the holders of the notes against any tax, assessment or government charge imposed on a holder or required to be withheld or deducted from any payment made to a holder, including any charge or withholding required on account of this indemnification, and any costs or expenses incurred by a holder on account of our assuming the obligations. If we deliver to the trustee an opinion of an independent tax counsel or consultant of recognized standing stating that the holders will not recognize income, gain or loss, for U.S. federal income tax purposes, as a result of assuming these obligations, then a holder will have the above indemnification rights only if and when gain for U.S. federal income tax purposes is actually recognized by a holder. If we assume Apache Canada's obligations, as described above, we will be substituted for Apache Canada for all purposes regarding the notes so assumed as if we had been the original issuer of the notes. ASSIGNMENT TO ANOTHER SUBSIDIARY Under the indenture, Apache Canada may assign its obligations under the notes to any of our other subsidiaries and the new subsidiary will be treated, for all purposes, as Apache Canada's successor with respect to the notes assigned, provided that the conditions described under "-- Consolidation, Merger and Sale of Assets" below are satisfied. 32 CONSOLIDATION, MERGER AND SALE OF ASSETS We may, without the consent of the holders of the notes, consolidate or merge with or into, or convey, transfer or lease our properties and assets substantially as an entirety to, any person that is a corporation, limited liability company, partnership, joint venture or joint stock company organized and validly existing under the laws of any domestic jurisdiction. We may also permit any of those persons to consolidate with or merge into us or convey, transfer or lease its properties and assets substantially as an entirety to us, as long as any successor person assumes our obligations on the securities and after giving effect to the transaction no event of default under the indenture, and no event which, after notice or lapse of time or both, would become an event of default, will have occurred and be continuing, and as long as some other conditions are met. Apache Canada may, without the consent of the holders of the notes, consolidate or merge into, or convey, transfer or lease its properties and assets substantially as an entirety to any person that is a corporation, limited liability company, partnership, joint venture or joint stock company and is organized and validly existing under the laws of any jurisdiction or permit any such person to consolidate with or merge into or convey, transfer or lease its properties and assets substantially as an entirety to us or Apache Canada, as long as the person assumes Apache Canada's obligations on the notes and under the indenture, and immediately after the transaction, no event of default, and no event that, after notice or lapse of time or both, would become an event of default, under the indenture has occurred. Also, the successor person to us or Apache Canada must expressly agree in a supplemental indenture: - that all payments on the notes in respect of the principal of and any premium and interest shall be made without withholding or deduction for any present or future taxes, duties, assessments or governmental charges of any nature imposed or levied by or on behalf of the person's jurisdiction of organization or political subdivision or taxing authority, unless the taxes are required by the jurisdiction, subdivision or authority to be withheld or deducted, in which case the person will pay additional amounts so that after deducting the taxes the holder of a note receives the same amount that the holder would have received if no withholding or deduction was required; and - to indemnify immediately the holder of each note against - any tax, assessment or governmental charge imposed on the holder or required to be withheld or deducted from any payment to the holder as a consequence of the transaction; and - any other tax costs or other tax expenses of the transaction. If we, Apache Canada or the successor person deliver an opinion of an independent counsel or a tax consultant of recognized standing that the holder will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the transaction, a holder will have this right to indemnification only if and when gain for U.S. federal income tax purposes is actually recognized by the holder. PAYMENT OF ADDITIONAL AMOUNTS Apache Canada must make all payments of, or in respect of, principal of and any premium and interest on the notes without withholding or deduction for any taxes imposed or levied by or on behalf of any Canadian taxing authorities. If those taxing authorities nonetheless require Apache Canada to withhold taxes, Apache Canada must pay as additional interest an amount that will result, after deducting the taxes, in the payment to the holder of the notes of the amount that would have been paid if no withholding was required. Apache Canada is not required to pay this additional interest for or on account of: - any tax that would not have been imposed but for the fact that the holder - was a resident, domiciled or national of, or engaged in business or maintained a permanent establishment or was physically present in Canada or otherwise had some connection with Canada other than merely owning the note; 33 - presented, if presentation is required, the note for payment in Canada, unless the note could not have been presented for payment elsewhere; - presented, if presentation is required, the note more than 30 days after the date on which the payment relating to the note first became due and payable or provided for, whichever is later, except to the extent that the holder would have been entitled to the additional interest if it had presented the note for payment on any day within this 30 day period; - is not dealing with Apache Canada, directly or indirectly, on an arm's-length basis; or - entered into or participated in a scheme to avoid Canadian withholding tax that Apache Canada was neither a party to nor participated in; - any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge; - any tax that is payable other than by withholding or deduction from payments of, or in respect of, principal of or any premium or interest on the notes; - any tax that is imposed or withheld because the holder or the beneficial owner of a note failed, upon request of Apache Canada, to provide information concerning the nationality, residence or identity of the holder or the beneficial owner, or to make any declaration or other similar claim or satisfy any information or reporting requirement that is required or imposed by Canadian federal income tax laws as a precondition to exemption from all or part of the tax, assessment or other governmental charge; or - any combination of the four items listed above. Apache Canada also does not have to pay additional interest with respect to any payment of the principal of or any premium or interest on the note to any holder that is a fiduciary or partnership or other than the sole beneficial owner of the payment to the extent the payment would be required by the laws of Canada to be included in the income for tax purposes of a beneficiary or settlor with respect to a fiduciary or a member of the partnership or a beneficial owner who would not have been entitled to the additional interest if it held the note. Any amounts paid by us, as guarantor, under the indenture must be paid without withholding or deduction for any taxes imposed or levied by or on behalf of any U.S. taxing authority. If a U.S. taxing authority nonetheless requires us to withhold taxes, we must pay an additional amount so that the net amount paid to the holder, after deducting the taxes, is not less than the amount then due and payable on the notes. We are not required to pay this additional amount to any holder of a note who is: - subject to U.S. tax by reason of the holder being connected with the U.S. otherwise than by holding or owning the notes; or - not dealing at arm's length with us. Where this prospectus mentions, in any context, the payment of principal of, or any premium or interest on, or in respect of, the notes or the net proceeds received on the sale or exchange of the notes, this amount shall be deemed to include the payment of additional amounts provided for in the indenture to the extent that the additional amounts are, were or would be payable under the indenture. REDEMPTION FOR TAXATION REASONS If Canadian taxing authorities change or amend their laws, regulations or published tax rulings or the official administration, application or interpretation of their laws, regulations or published tax rulings either generally or in relation to the notes, and Apache Canada determines that: - it will be required to pay any additional amounts under the indenture or the terms of any note in respect of interest on the next succeeding interest payment date; and 34 - Apache Canada cannot avoid paying the additional amount by taking reasonable measures available to it, it may, at its option, redeem all, but not less than all, of the notes of any series in respect of which any additional amounts would be so payable at any time, upon not less than 30 nor more than 60 days' written notice as provided in the indenture. The redemption price will be equal to 100 percent of the principal amount of the notes plus accrued interest to the date of redemption. Notwithstanding the foregoing: - no notice of redemption may be given earlier than 60 days before the earliest date on which Apache Canada would be obligated to pay any additional amounts if a payment was due in respect of the notes; and - at the time any redemption notice is given, the obligation to pay any additional amounts must remain in effect. If - Apache Canada has consolidated with or merged into, or conveyed or transferred or leased its properties and assets as an entirety or substantially as an entirety to, any person that is organized under the laws of any jurisdiction other than the United States or Canada; - as the result of any change in or any amendment to the laws, regulations or published tax rulings of the jurisdiction under which Apache Canada's successor is organized or of its political subdivisions or taxing authorities affecting taxation, or any change in the official administration, application or interpretation of its laws, regulations or published tax rulings either generally or in relation to any particular notes, Apache Canada's successor must pay any additional amounts under the indenture or the terms of the notes in respect of interest on the notes on the next succeeding interest payment date; and - Apache Canada or its successor taking reasonable measures cannot avoid this obligation, then Apache Canada or its successor may redeem all, but not less than all, of the notes in respect of which any additional amounts would be so payable at any time, upon not less than 30 nor more than 60 days' written notice as provided in the indenture, at a redemption price equal to 100 percent of the principal amount of the notes plus accrued interest to the date fixed for redemption. No notice of redemption may be given earlier than 60 days before the earliest date on which a successor must pay any additional amounts if a payment was due in respect of the notes. Also, at the time any redemption notice is given, the successor's obligation to pay any additional amounts must remain in effect. CONCERNING THE TRUSTEE JPMorgan Chase Bank, New York, New York is the trustee under the indenture. JPMorgan Chase Bank is an agent bank and a lender under our global credit facility. SERVICE OF PROCESS Under the indenture, Apache Canada has irrevocably appointed CT Corporation System, 111 8th Avenue, New York, New York 10011, as its agent for service of process in any suit, action or proceeding with respect to the indenture, the notes or the guarantees issued thereunder and for actions brought under the federal or state securities laws brought in any federal or state court located in New York City, and submitted to jurisdiction in New York. GOVERNING LAW The indenture, the notes and the guarantees are governed by and construed under the laws of the State of New York, without regard to the principles of conflicts of laws, except as may otherwise be required by mandatory provisions of law. All matters governing the authorization and execution of the 35 indenture and the notes by Apache Canada will be governed by and construed in accordance with the laws of Nova Scotia, Canada. ENFORCEABILITY OF JUDGMENTS Since a substantial portion of Apache Canada's assets are outside the United States, any judgment obtained in the United States against Apache Canada, including judgments with respect to the payment of principal or interest on the notes, may not be collectible in the United States. ADDITIONAL INFORMATION Anyone who receives this prospectus may obtain a copy of the indenture and the registration rights agreement without charge by writing to Apache Corporation, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400, Attention: Corporate Secretary. BOOK-ENTRY, DELIVERY AND FORM THE GLOBAL NOTES The exchange notes will be issued in the form of one or more registered notes in global form, without interest coupons (the "global notes"). Upon issuance, each of the global notes will be deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., as nominee of DTC. Ownership of beneficial interests in each global note will be limited to persons who have accounts with DTC ("DTC participants") or persons who hold interests through DTC participants. Apache Canada expects that under procedures established by DTC: - upon deposit of each global note with DTC's custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the initial purchasers; and - ownership of beneficial interests in each global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note). DEPOSITARY PROCEDURES All interests in the global notes will be subject to the operations and procedures of DTC. The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of DTC and is subject to changes by DTC. Neither we nor Apache Canada take responsibility for these operations and procedures, and urge investors to contact DTC or its participants directly to discuss these matters. DTC has advised us and Apache Canada that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. 36 Under the terms of the indenture, we, Apache Canada and the trustee will treat the persons in whose names the notes, including the global notes, are registered as the owners thereof for the purpose of receiving payments and for any and all other purposes whatsoever. Consequently, neither Apache, Apache Canada, the trustee nor any agent of Apache, Apache Canada or the trustee has or will have any responsibility or liability for: - any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the global notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the global notes; or - any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised us and Apache Canada that its current practices, upon receipt of any payment in respect of securities such as the notes (including principal and interest (including special interest), if any), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the global notes as shown on the records of DTC. Payments by Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the trustee, Apache or Apache Canada. Neither Apache, Apache Canada nor the trustee will be liable for any delay by DTC or its Participants in identifying the beneficial owners of the notes, and Apache, Apache Canada and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the notes for all purposes. Interests in the global notes will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will, therefore, settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its Participants. Transfers between Participants in DTC will be effective in accordance with DTC's procedures, and will be settled in same-day funds. DTC has advised us and Apache Canada that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC interests in the global notes are credited and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given direction. If, however, there is an event of default under the notes, DTC reserves the right to exchange global notes for legended notes in certificated form and to distribute such notes to its Participants. The information in this section concerning DTC and its book-entry system has been obtained from sources that we and Apache Canada believe to be reliable, but we and Apache Canada take no responsibility for the accuracy of that information. Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the global notes among Participants in DTC, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of Apache, Apache Canada or the trustee will have any responsibility for the performance by DTC or its Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations. CERTIFICATED NOTES Notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related notes only if: - DTC notifies Apache Canada at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days; - DTC ceases to be registered as a clearing agency under the Securities Exchange Act of 1934 and a successor depositary is not appointed within 90 days; 37 - Apache Canada, at its option, notifies the trustee that it elects to cause the issuance of certificated notes; or - an event of default as provided in the indenture with respect to the notes should occur and be continuing. SAME DAY SETTLEMENT AND PAYMENT The indenture will require that payments in respect of the notes represented by the global note (including principal, premium, if any, and interest (including special interest), if any) be made by wire transfer of immediately available funds to the accounts specified by the global note holder. With respect to certificated notes, Apache Canada will make all payments of principal, premium, if any, interest (including special interest), if any, by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address. Apache and Apache Canada expect that secondary trading in the certificated notes will also be settled in immediately available funds. FEDERAL INCOME TAX CONSIDERATIONS UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following section describes the anticipated U.S. federal income tax consequences relating to the exchange of outstanding notes for exchange notes pursuant to the exchange offer. This description is based upon the Internal Revenue Code of 1986, as amended; existing administrative pronouncements and judicial decisions; and existing and proposed Treasury regulations, each as available and in effect as of the date hereof. All of the foregoing are subject to change, and any such change could be retroactive and could affect the continuing validity of this description. This description deals only with exchange notes held as capital assets by initial holders that acquire the exchange notes pursuant to the exchange offer. This description does not discuss all of the tax consequences that may be relevant to holders subject to special rules, such as: - financial institutions; - real estate investment trusts; - regulated investment companies; - grantor trusts; - insurance companies; - dealers or traders in securities or currencies; - persons holding notes in connection with a hedging transaction, straddle, conversion transaction or other integrated transaction; or - persons who have ceased to be United States citizens or to be taxed as resident aliens. This description also does not address the U.S. federal estate and gift tax consequences or any applicable foreign, state or local tax laws. Holders should consult their tax advisors with regard to the application of U.S. federal income and estate tax laws to their particular situation, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. EXCHANGE OFFER The exchange of outstanding notes by a holder for exchange notes pursuant to the exchange offer will not constitute a taxable exchange for U.S. federal income tax purposes. A holder will not recognize gain or 38 loss upon the receipt of exchange notes pursuant to the exchange offer and will be required to treat the exchange notes and any payments thereon for U.S. federal income tax purposes as if the exchange offer had not occurred. A holder's holding period for exchange notes will include the holding period for the outstanding notes exchanged pursuant to the exchange offer and a holder's adjusted basis in exchange notes will be the same as such holder's adjusted basis in such outstanding notes. The above description is not intended to constitute a complete analysis of all tax consequences relating to the exchange of outstanding notes for exchange notes pursuant to the exchange offer or the acquisition, ownership, and disposition of the exchange notes. You should consult with your own tax advisor regarding the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences that may arise under the laws of any state, local, or other taxing jurisdiction. CANADIAN FEDERAL INCOME TAX CONSIDERATIONS The following summary describes the anticipated Canadian federal income tax considerations relating to the exchange of outstanding notes for exchange notes pursuant to the exchange offer to persons who acquired their outstanding notes pursuant to the original private offering of such notes on May 15, 2003, and who, for the purpose of the Income Tax Act (Canada) (the "ITA"), are non-residents of Canada and hold their outstanding notes as capital property. This summary is based on the current provisions of the ITA and the regulations thereunder, the current assessing and administrative practices of the Canada Customs and Revenue Agency (the "CCRA"), all specific proposals to amend the ITA and the regulations thereunder publicly announced by the Minister of Finance (Canada) before the date of this prospectus and the assumption that the exchange of outstanding notes for exchange notes, pursuant to the exchange offer, does not constitute a repayment, under the commercial laws of the jurisdiction which governs the outstanding notes, of the indebtedness evidenced by the outstanding notes. This summary does not otherwise take into account or anticipate changes in the law or in the assessing and administrative practices of the CCRA, whether by judicial, governmental or legislative decision or action, nor does it take into account tax legislation or considerations of any province or territory of Canada or any jurisdiction other than Canada. This summary is of a general nature only and is not intended to be, and should not be interpreted as, legal or tax advice to any holder of outstanding notes. Holders of outstanding notes should consult their own tax advisors with regard to the application of Canadian federal income tax laws to their particular situation. The exchange of outstanding notes by a holder for exchange notes pursuant to the exchange offer will not constitute a taxable event under the ITA. Accordingly, no tax on income (including capital gains) will be payable under the ITA in respect of the exchange of outstanding notes for exchange notes pursuant to the exchange offer. PLAN OF DISTRIBUTION Each broker-dealer that receives exchange notes for its own account under the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes if the outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed to make this prospectus, as amended or supplemented, available to any broker-dealer to use in connection with any such resale for a period of at least 90 days after the expiration date. We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own accounts under the exchange offer may be sold from time to time in one or more transactions: - in the over-the-counter market; 39 - in negotiated transactions; - through the writing of options on the exchange notes or a combination of such methods of resale; - at market prices prevailing at the time of resale; - at prices related to such prevailing market prices; or - at negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers. Brokers or dealers may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any such exchange notes. An "underwriter" within the meaning of the Securities Act includes: - any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer; or - any broker or dealer that participates in a distribution of such exchange notes. Any profit on any resale of exchange notes and any commissions or concessions received by any persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Based on interpretations by the staff of the Securities and Exchange Commission in no-action letters issued to third parties, we believe that a holder or other person who receives exchange notes will be allowed to resell the exchange notes to the public without further registration under the Securities Act and without delivering to the purchasers of the exchange notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. The holder (other than a person that is an "affiliate" of Apache within the meaning of Rule 405 under the Securities Act) who receives exchange notes in exchange for outstanding notes in the ordinary course of business and who is not participating, need not intend to participate or have an arrangement or understanding with person to participate in the distribution of the exchange notes. If, however, any holder acquires exchange notes in the exchange offer for the purpose of distributing or participating in a distribution of the exchange notes, the holder cannot rely on the position of the staff of the SEC enunciated in such no-action letters or any similar interpretive letters. The holder must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. A secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Securities Act, unless an exemption from registration is otherwise available. Further, each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the outstanding notes were acquired by such participating broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of any exchange notes. We have agreed, for a period of not less than 90 days from the consummation of the exchange offer, to make this prospectus available to any broker-dealer for use in connection with any such resale. For a period of not less than 90 days after the expiration date we will promptly upon request send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests those documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the outstanding notes, other than commissions or concessions of any brokers or dealers. We will indemnify the holders of the outstanding notes against liabilities under the Securities Act, including any broker-dealers. 40 LEGAL MATTERS The validity of the exchange notes and guarantees will be passed upon for us and Apache Canada by Chamberlain, Hrdlicka, White, Williams & Martin, Houston, Texas. In addition, other matters of Canadian law will be passed upon for us and Apache Canada by McInnes Cooper, Nova Scotia, Canada. EXPERTS Our consolidated financial statements as of December 31, 2002 and for the year then ended have been incorporated by reference herein in reliance upon the report of Ernst & Young LLP, independent public accountants, and upon the authority of said firm as experts in accounting and auditing. Our consolidated financial statements and schedules as of December 31, 2001 and for the years ended December 31, 2001 and 2000 included in our Annual Report on Form 10-K for the year ended December 31, 2002 (the "2002 Annual Report") have been incorporated by reference in this prospectus in reliance upon the report of Arthur Andersen LLP, independent public accountants, and upon the authority of said firm as experts in accounting and auditing. The Arthur Andersen LLP report on the December 31, 2001 and 2000 consolidated financial statements, dated March 12, 2002, included in the 2002 Annual Report is a copy of the previously issued Arthur Andersen LLP report, which has not been reissued because Arthur Andersen LLP has ceased operations. Because we will not be able to obtain, after reasonable efforts, the written consent of Arthur Andersen LLP to our naming it in this prospectus as having certified our financial statements for the two years ended December 31, 2001, as required by Section 7 of the Securities Act, we will dispense with the filing of their consent in reliance on Rule 437a promulgated under the Securities Act. In light of the circumstances described above and the publicly reported proceedings against Arthur Andersen, relief that may be available to investors under the federal securities laws against accounting firms will not be available against Arthur Andersen. On April 2, 2002, we filed a Current Report on Form 8-K announcing that our board of directors engaged Ernst & Young LLP as independent public accountants for the fiscal year 2002, replacing Arthur Andersen LLP. The decision to change independent public accountants was not the result of any disagreement with Arthur Andersen LLP on matters of accounting principles or practices, financial statement disclosure or auditing scope and procedure. The information incorporated by reference into this prospectus regarding our total proved reserves was prepared by us and reviewed by Ryder Scott Company Petroleum Engineers, as stated in their letter reports, and is incorporated by reference in reliance upon the authority of said firm as experts in such matters. 41 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $350,000,000 APACHE FINANCE CANADA CORPORATION EXCHANGE OFFER FOR $350,000,000 4.375% NOTES DUE 2015 FULLY AND UNCONDITIONALLY GUARANTEED BY (APACHE CORPORATION LOGO) ---------- PROSPECTUS ---------- , 2003 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell or buy any securities in any jurisdiction where it is unlawful. The information in this prospectus is current as of the date hereof. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS APACHE CORPORATION Apache's Certificate of Incorporation and bylaws provide that, to the full extent permitted under the Delaware General Corporation Law, Apache's directors shall not be personally liable for monetary damages. Apache's bylaws provide that Apache shall indemnify its officers, directors, employees and agents. Section 145 of the Delaware General Corporation Law, inter alia, authorizes a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, other than an action by or in the right of the corporation, because such person is or was a director, officer, employee or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reason to believe his conduct was unlawful. Similar indemnity is authorized for such persons against expenses, including attorneys' fees, actually and reasonably incurred in defense or settlement of any such pending, completed or threatened action or suit by or in the right of the corporation if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that, unless a court of competent jurisdiction otherwise provides, such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct. Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him. Apache maintains policies insuring its and its subsidiaries' officers and directors against specified liabilities for actions taken in such capacities, including liabilities under the Securities Act of 1933. Article VII of Apache's bylaws provides, in substance, that directors, officers, employees and agents of Apache shall be indemnified to the extent permitted by Section 145 of the Delaware General Corporation Law. Additionally, Article Seventeen of Apache's restated certificate of incorporation eliminates in specified circumstances the monetary liability of directors of Apache for a breach of their fiduciary duty as directors. These provisions do not eliminate the liability of a director: - for a breach of the director's duty of loyalty to Apache or its stockholders; - for acts or omissions by the director not in good faith; - for acts or omissions by a director involving intentional misconduct or a knowing violation of the law; - under Section 174 of the Delaware General Corporation Law, which relates to the declaration of dividends and purchase or redemption of shares in violation of the Delaware General Corporation Law; and - for transactions from which the director derived an improper personal benefit. II-1 Reference is made to the form of underwriting agreements to be incorporated by reference in this registration statement for a description of the indemnification arrangements Apache and Apache Canada agree to in connection with offerings of the securities registered by this registration statement. APACHE FINANCE CANADA CORPORATION The Articles of Association of Apache Finance Canada Corporation provide, in substance, that every director and officer of Apache Canada shall be indemnified by Apache Finance Canada Corporation against all costs, losses and expenses which such person may incur by reason of any contract entered into, or any act or thing done, by him in such capacity or in anyway in the discharge of his duties, including acts or omissions not in good faith or other breaches of fiduciary duty, unless such costs, losses and expenses result from the dishonesty of the director or the officer. Nova Scotia law does not make any statutory provision for, nor impose any statutory restriction upon, the ability of a company to indemnify directors and officers. Although the matter has not been judicially considered, the obligation to indemnify may not extend to losses occasioned by a breach by a director of his common law fiduciary duty to Apache Finance Canada Corporation. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits:
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *4.1 Indenture dated as of November 23, 1999 among Apache Corporation, Apache Finance Canada Corporation and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as trustee *4.2 Registration Rights Agreement dated May 15, 2003 among Apache, Apache Canada and the representatives of the Initial Purchasers. *4.3 Form of Exchange Note. *5.1.1 Opinion of Chamberlain, Hrdlicka, White, Williams & Martin regarding legality of securities being registered by Apache. *5.1.2 Opinion of Sidley, Austin, Brown & Wood, LLP regarding legality of securities being registered by Apache. *5.2 Opinion of McInnes Cooper regarding legality under the laws of Nova Scotia of securities being registered by Apache Canada. *12.1 Statements of computation of ratios of earnings to fixed charges. *23.1 Consent of Ernst & Young LLP, Houston, Texas. 23.2 Consent of Arthur Andersen LLP, Houston, Texas (omitted pursuant to Rule 437a of the Securities Act of 1933, as amended). *23.3 Consent of Chamberlain, Hrdlicka, White, Williams & Martin (included in Exhibit 5.1.1). *23.5 Consent of McInnes Cooper (included in Exhibit 5.2). *23.6 Consent of Ryder Scott Company Petroleum Engineers. *24.1 Power of Attorney (included in Part II as a part of the signature pages of the Registration Statement). *25.1 Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 of JPMorgan Chase Bank as trustee under the Indenture among Apache, Apache Finance Canada Corporation and JPMorgan Chase Bank, as trustee. *25.2 Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 of JPMorgan Chase Bank as guarantee trustee under the guarantee of Apache Corporation with respect to the Indenture among Apache, Apache Finance Canada Corporation and JPMorgan Chase Bank, as trustee.
II-2
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *99.1 Form of Letter of Transmittal. *99.2 Form of Notice of Guaranteed Delivery. *99.3 Form of Exchange Agent Agreement.
- --------------- * Filed herewith (b) Financial Schedules: None. ITEM 22. UNDERTAKINGS 1. The undersigned Registrants hereby undertake: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement. (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in the 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 and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculations 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 paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, that are incorporated by reference in the Registration Statement; (b) 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; and (c) 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. 2. The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of Apache's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement) shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 3. 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 20 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 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by any Registrant of expenses incurred or paid by a director, officer or controlling person of that Registrant in the successful defense of any action, suit or proceeding) is asserted against any Registrant by such director, officer or controlling person in connection with the securities being registered, that Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 4. The undersigned Registrants hereby undertake that: (a) For the purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act, as amended, shall be deemed to be part of this Registration Statement as of the time it was declared effective; and (b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. 5. The undersigned Registrants hereby undertake to respond to requests for information that is incorporated by into this prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This undertaking includes information contained in documents filed subsequent to the effective date of this registration statement through the date of responding to this request. 6. The undersigned Registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction that was not the subject of and included in this registration statement when it became effective. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, Apache Corporation has duly caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Houston, State of Texas, on the 13th day of August, 2003. APACHE CORPORATION By: /s/ G. STEVEN FARRIS ------------------------------------ G. Steven Farris President, Chief Executive Officer and Chief Operating Officer POWER OF ATTORNEY The undersigned directors and officers of Apache Corporation do hereby constitute and appoint Raymond Plank, G. Steven Farris, Roger B. Plank and P. Anthony Lannie, and each of them, with full power of substitution, our true and lawful attorneys-in-fact to sign and execute, on behalf of the undersigned, any and all amendments (including post effective amendments) to this registration statement; and each of the undersigned does hereby ratify and confirm all that said attorneys-in-fact shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons, in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ G. STEVEN FARRIS Director, President, Chief August 13, 2003 - -------------------------------------- Executive Officer and Chief G. Steven Farris Operating Officer (Principal Executive Officer) /s/ ROGER B. PLANK Executive Vice President and August 13, 2003 - -------------------------------------- Chief Financial Officer Roger B. Plank (Principal Financial Officer) /s/ THOMAS L. MITCHELL Vice President and Controller August 13, 2003 - -------------------------------------- (Principal Accounting Officer) Thomas L. Mitchell
SIGNATURE TITLE DATE --------- ----- ---- /s/ RAYMOND PLANK Director August 13, 2003 - -------------------------------------- Raymond Plank /s/ FREDERICK M. BOHEN Director August 13, 2003 - -------------------------------------- Frederick M. Bohen /s/ RANDOLPH M. FERLIC Director August 13, 2003 - -------------------------------------- Randolph M. Ferlic /s/ EUGENE C. FIEDOREK Director August 13, 2003 - -------------------------------------- Eugene C. Fiedorek /s/ A.D. FRAZIER, JR. Director August 13, 2003 - -------------------------------------- A.D. Frazier, Jr. /s/ PATRICIA A. GRAHAM Director August 13, 2003 - -------------------------------------- Patricia A. Graham /s/ JOHN A. KOCUR Director August 13, 2003 - -------------------------------------- John A. Kocur /s/ GEORGE D. LAWRENCE Director August 13, 2003 - -------------------------------------- George D. Lawrence /s/ F. H. MERELLI Director August 13, 2003 - -------------------------------------- F. H. Merelli /s/ RODMAN D. PATTON Director August 13, 2003 - -------------------------------------- Rodman D. Patton /s/ CHARLES J. PITMAN Director August 13, 2003 - -------------------------------------- Charles J. Pitman /s/ JAY A. PRECOURT Director August 13, 2003 - -------------------------------------- Jay A. Precourt
SIGNATURES Pursuant to the requirements of the Securities Act, Apache Finance Canada Corporation has duly caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Houston, State of Texas, on the 13th day of August, 2003. APACHE FINANCE CANADA CORPORATION By: /s/ G. STEVEN FARRIS ------------------------------------ G. Steven Farris Chief Executive Officer POWER OF ATTORNEY The undersigned directors and officers of Apache Finance Canada Corporation do hereby constitute and appoint Raymond Plank, G. Steven Farris, Roger B. Plank and P. Anthony Lannie, and each of them, with full power of substitution, our true and lawful attorneys-in-fact to sign and execute, on behalf of the undersigned, any and all amendments (including post effective amendments) to this Registration Statement; and each of the undersigned does hereby ratify and confirm all that said attorneys-in-fact shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ G. STEVEN FARRIS Director, Chief August 13, 2003 -------------------------------- Executive Officer G. Steven Farris (Principal Executive Officer) /s/ ROGER B. PLANK Director, Executive August 13, 2003 -------------------------------- Vice President and Roger B. Plank Chief Financial Officer (Principal Financial Officer) /s/ THOMAS L. MITCHELL Vice President and August 13, 2003 -------------------------------- Controller (Principal Thomas L. Mitchell Accounting Officer) /s/ FLOYD R. PRICE Director August 13, 2003 -------------------------------- Floyd R. Price /s/ ERIC L. HARRY Director August 13, 2003 -------------------------------- Eric L. Harry /s/ JOHN F. CURRAN Director August 13, 2003 -------------------------------- John F. Curran /s/ JAMES G. SMELTZER Director August 13, 2003 -------------------------------- James G. Smeltzer
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- *4.1 Indenture dated as of November 23, 1999 among Apache Corporation, Apache Finance Canada Corporation and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as trustee *4.2 Registration Rights Agreement dated May 15, 2003 among Apache, Apache Canada and the representatives of the Initial Purchasers. *4.3 Form of Exchange Note. *5.1.1 Opinion of Chamberlain, Hrdlicka, White, Williams & Martin regarding legality of securities being registered by Apache. *5.1.2 Opinion of Sidley, Austin, Brown & Wood, LLP regarding legality of securities being registered by Apache. *5.2 Opinion of McInnes Cooper regarding legality under the laws of Nova Scotia of securities being registered by Apache Canada. *12.1 Statements of computation of ratios of earnings to fixed charges. *23.1 Consent of Ernst & Young LLP, Houston, Texas. 23.2 Consent of Arthur Andersen LLP, Houston, Texas (omitted pursuant to Rule 437a of the Securities Act of 1933, as amended). *23.3 Consent of Chamberlain, Hrdlicka, White, Williams & Martin (included in Exhibit 5.1.1). *23.5 Consent of McInnes Cooper (included in Exhibit 5.2). *23.6 Consent of Ryder Scott Company Petroleum Engineers. *24.1 Power of Attorney (included in Part II as a part of the signature pages of the Registration Statement). *25.1 Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 of JPMorgan Chase Bank as trustee under the Indenture among Apache, Apache Finance Canada Corporation and JPMorgan Chase Bank, as trustee. *25.2 Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 of JPMorgan Chase Bank as guarantee trustee under the guarantee of Apache Corporation with respect to the Indenture among Apache, Apache Finance Canada Corporation and JPMorgan Chase Bank, as trustee. *99.1 Form of Letter of Transmittal. *99.2 Form of Notice of Guaranteed Delivery. *99.3 Form of Exchange Agent Agreement.
- --------------- * Filed herewith EX-4.1 3 h08254exv4w1.txt INDENTURE DATED NOVEMBER 23, 1999 EXHIBIT 4.1 APACHE FINANCE CANADA CORPORATION, Company APACHE CORPORATION, Guarantor to THE CHASE MANHATTAN BANK, Trustee --------------- INDENTURE --------------- Dated as of November 23, 1999 Debt Securities Reconciliation and tie between Trust Indenture Act of 1939 (the "Trust Indenture Act") and Indenture
Trust Indenture Act Section Indenture Section Section 310(a)(1) 607 (a)(2) 607 (b) 608 Section 312(a) 701 (b) 702 (c) 702 Section 313(a) 703 (c) 703 (d) 703 Section 314(a) 704 (c)(1) 102 (c)(2) 102 (e) 102 (f) 102 Section 316(a) (last sentence) 101 (a)(1)(A) 502, 512 (a)(1)(B) 513 (b) 508 Section 317(a)(1) 503 (a)(2) 504 (b) 1003 Section 318(a) 108
Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture. Attention should also be directed to Section 318(c) of the Trust Indenture Act, which provides that the provisions of Sections 310 to and including 317 are a part of and govern every qualified indenture, whether or not physically contained therein. Recitals................................................................................................. 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions................................................................................. 2 Act............................................................................................. 2 Additional Amounts.............................................................................. 2 Affiliate....................................................................................... 3 Authenticating Agent............................................................................ 3 Authorized Newspaper............................................................................ 3 Bearer Security................................................................................. 3 Board of Directors.............................................................................. 3 Board Resolution................................................................................ 3 Business Day.................................................................................... 3 Change in Control............................................................................... 3 Change in Control Purchase Date................................................................. 3 Change in Control Purchase Notice............................................................... 3 Change in Control Purchase Price................................................................ 4 Commission...................................................................................... 4 Common Stock.................................................................................... 4 Company......................................................................................... 4 Company Request and Company Order............................................................... 4 Consolidated Net Worth.......................................................................... 4 Conversion Event................................................................................ 4 Corporate Trust Office.......................................................................... 4 Corporation..................................................................................... 4 Coupon.......................................................................................... 4 Currency........................................................................................ 5 CUSIP number.................................................................................... 5 Defaulted Interest.............................................................................. 5 Dollars or $.................................................................................... 5 ECU............................................................................................. 5 Euro............................................................................................ 5 European Monetary System........................................................................ 5 European Union.................................................................................. 5 Event of Default................................................................................ 5 Foreign Currency................................................................................ 5 GAAP............................................................................................ 5 Government Obligations.......................................................................... 5 Guarantee....................................................................................... 6 Guarantor....................................................................................... 6
iii Guarantor Request and Guarantor Order........................................................... 6 Holder.......................................................................................... 6 Indebtedness.................................................................................... 6 Indenture....................................................................................... 7 Independent Public Accountants.................................................................. 7 Indexed Security................................................................................ 7 Interest........................................................................................ 7 Interest Payment Date........................................................................... 7 Judgment Currency............................................................................... 7 Legal Holidays.................................................................................. 7 Lien............................................................................................ 7 Limited Recourse Indebtedness................................................................... 8 Maturity........................................................................................ 8 New York Banking Day............................................................................ 8 Office or Agency................................................................................ 8 Officers' Certificate........................................................................... 8 Opinion of Counsel.............................................................................. 8 Ordinary Course ................................................................................ 8 Original Issue Discount Security................................................................ 8 Outstanding..................................................................................... 9 Paying Agent................................................................................... 10 Person......................................................................................... 10 Place of Payment............................................................................... 10 Predecessor Security........................................................................... 10 Redemption Date................................................................................ 10 Redemption Price............................................................................... 10 Registered Security............................................................................ 10 Regular Record Date............................................................................ 11 Required Currency.............................................................................. 11 Responsible Officer............................................................................ 11 Sale\Leaseback Transaction..................................................................... 11 Security or Securities......................................................................... 11 Security Register and Security Registrar....................................................... 11 Senior Indebtedness............................................................................ 11 Special Record Date............................................................................ 12 Stated Maturity................................................................................ 12 Subsidiary..................................................................................... 12 Subsidiary Assignee............................................................................ 12 Successor...................................................................................... 12 Successor Additional Amounts................................................................... 12 Trust Indenture Act............................................................................ 13 Trustee........................................................................................ 13 United States.................................................................................. 13
iv United States Alien............................................................................ 13 U.S. Depository or Depository.................................................................. 13 Vice President................................................................................. 13 Voting Stock................................................................................... 13 Section 102. Compliance Certificates and Opinions....................................................... 14 Section 103. Form of Documents Delivered to Trustee..................................................... 14 Section 104. Acts of Holders............................................................................ 15 Section 105. Notices, etc. to Trustee, the Company and the Guarantor.................................... 17 Section 106. Notice to Holders of Securities; Waiver.................................................... 17 Section 107. Language of Notices........................................................................ 18 Section 108. Conflict with Trust Indenture Act.......................................................... 18 Section 109. Effect of Headings and Table of Contents................................................... 19 Section 110. Successors and Assigns..................................................................... 19 Section 111. Separability Clause........................................................................ 19 Section 112. Benefits of Indenture...................................................................... 19 Section 113. Governing Law.............................................................................. 19 Section 114. Legal Holidays............................................................................. 19 Section 115. Counterparts............................................................................... 20 Section 116. Judgment Currency.......................................................................... 20 ARTICLE TWO SECURITIES AND GUARANTEE FORMS Section 201. Forms Generally............................................................................ 21 Section 202. Guarantee by Guarantor: Form of Guarantee.................................................. 21 Section 203. Form of Trustee's Certificate of Authentication............................................ 24 Section 204. Securities in Global Form.................................................................. 24 ARTICLE THREE THE SECURITIES Section 301. Amount Unlimited; Issuable in Series....................................................... 25 Section 302. Currency; Denominations.................................................................... 28 Section 303. Execution, Authentication, Delivery and Dating............................................. 29 Section 304. Temporary Securities....................................................................... 31 Section 305. Registration, Transfer and Exchange........................................................ 32 Section 306. Mutilated, Destroyed, Lost and Stolen Securities........................................... 35 Section 307. Payment of Interest and Certain Additional Amounts; Rights to Interest; Certain Additional Amounts Preserved................................... 36 Section 308. Persons Deemed Owners...................................................................... 38 Section 309. Cancellation............................................................................... 39 Section 310. Computation of Interest.................................................................... 39
v ARTICLE FOUR SATISFACTION AND DISCHARGE OF INDENTURE Section 401. Satisfaction and Discharge................................................................. 39 Section 402. Defeasance and Covenant Defeasance......................................................... 41 Section 403. Application of Trust Money................................................................. 45 Section 404. Reinstatement.............................................................................. 45 ARTICLE FIVE REMEDIES Section 501. Events of Default.......................................................................... 46 Section 502. Acceleration of Maturity; Rescission and Annulment......................................... 48 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................ 49 Section 504. Trustee May File Proofs of Claim........................................................... 50 Section 505. Trustee May Enforce Claims without Possession of Securities, Guarantees or Coupons...................................................................... 51 Section 506. Application of Money Collected............................................................. 51 Section 507. Limitations on Suits....................................................................... 51 Section 508. Unconditional Right of Holders to Receive Principal and any Premium, Interest and Additional Amounts............................................................ 52 Section 509. Restoration of Rights and Remedies......................................................... 52 Section 510. Rights and Remedies Cumulative............................................................. 53 Section 511. Delay or Omission not Waiver............................................................... 53 Section 512. Control by Holders of Securities........................................................... 53 Section 513. Waiver of Past Defaults.................................................................... 54 Section 514. Waiver of Stay or Extension Laws........................................................... 54 Section 515. Undertaking for Costs...................................................................... 54 ARTICLE SIX THE TRUSTEE Section 601. Certain Rights of Trustee.................................................................. 55 Section 602. Notice of Defaults......................................................................... 56 Section 603. Not Responsible for Recitals or Issuance of Securities..................................... 57 Section 604. May Hold Securities........................................................................ 57 Section 605. Money Held in Trust........................................................................ 57 Section 606. Compensation and Reimbursement............................................................. 57 Section 607. Corporate Trustee Required; Eligibility.................................................... 58 Section 608. Resignation and Removal; Appointment of Successor.......................................... 59 Section 609. Acceptance of Appointment by Successor..................................................... 60 Section 610. Merger, Conversion, Consolidation or Succession to Business................................ 61
vi Section 611. Appointment of Authenticating Agent........................................................ 62 ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR Section 701. Company and Guarantor to Furnish Trustee Names and Addresses of Holders....................................................................... 64 Section 702. Preservation of Information; Communications to Holders..................................... 64 Section 703. Reports by Trustee......................................................................... 64 Section 704. Reports by Company and Guarantor........................................................... 65 ARTICLE EIGHT CONSOLIDATION, MERGER AND SALES Section 801. Guarantor May Consolidate, Etc., Only on Certain Terms..................................... 66 Section 802. Company May Consolidate, etc., Only on Certain Terms....................................... 66 Section 803. Successor Person Substituted for Company or Guarantor...................................... 69 Section 804. Assumption by the Guarantor of the Company's Obligations................................... 69 Section 805. Indemnification Procedure.................................................................. 70 ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures without Consent of Holders......................................... 71 Section 902. Supplemental Indentures with Consent of Holders............................................ 72 Section 903. Execution of Supplemental Indentures....................................................... 74 Section 904. Effect of Supplemental Indentures.......................................................... 74 Section 905. Reference in Securities to Supplemental Indentures......................................... 74 Section 906. Conformity with Trust Indenture Act........................................................ 74 ARTICLE TEN COVENANTS Section 1001. Payment of Principal, any Premium, Interest and Additional Amounts. ...................... 75 Section 1002. Maintenance of Office or Agency........................................................... 75 Section 1003. Money for Securities Payments to Be Held in Trust......................................... 76 Section 1004. Additional Amounts........................................................................ 78 Section 1005. Limitation on Liens....................................................................... 79 Section 1006. Limitation on Sale/Leaseback Transactions................................................. 82 Section 1007. Corporate Existence....................................................................... 83 Section 1008. Waiver of Certain Covenants............................................................... 83 Section 1009. Company Statement as to Compliance; Notice of Certain Defaults............................ 83
vii ARTICLE ELEVEN REDEMPTION OF SECURITIES Section 1101. Applicability of Article.................................................................. 84 Section 1102. Election to Redeem; Notice to Trustee..................................................... 84 Section 1103. Selection by Trustee of Securities to be Redeemed......................................... 85 Section 1104. Notice of Redemption...................................................................... 85 Section 1105. Deposit of Redemption Price............................................................... 86 Section 1106. Securities Payable on Redemption Date..................................................... 87 Section 1107. Securities Redeemed in Part............................................................... 88 ARTICLE TWELVE REPAYMENT AT THE OPTION OF HOLDERS Section 1201. Applicability of Article.................................................................. 88 ARTICLE THIRTEEN SECURITIES IN FOREIGN CURRENCIES Section 1301. Applicability of Article.................................................................. 89 ARTICLE FOURTEEN MEETINGS OF HOLDERS OF SECURITIES Section 1401. Purposes for Which Meetings May Be Called................................................. 89 Section 1402. Call, Notice and Place of Meetings........................................................ 89 Section 1403. Persons Entitled to Vote at Meetings...................................................... 90 Section 1404. Quorum; Action............................................................................ 90 Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings. ..................... 91 Section 1406. Counting Votes and Recording Action of Meetings........................................... 92 ARTICLE FIFTEEN PURCHASES OF SECURITIES UPON CHANGE IN CONTROL Section 1501. Purchase of Securities at Option of the Holder upon Change in Control..................... 93 Section 1502. Effect of Change in Control Purchase Notice............................................... 95 Section 1503. Deposit of Change in Control Purchase Price............................................... 96 Section 1504. Covenant to Comply With Securities Laws Upon Purchase of Securities....................... 96 Section 1505. Repayment to the Company.................................................................. 97
viii ARTICLE SIXTEEN GUARANTEES Section 1601. Guarantee................................................................................. 97 Section 1602. Execution and Delivery of Guarantees...................................................... 99 ARTICLE SEVENTEEN MISCELLANEOUS Section 1701. Submission to Jurisdiction................................................................ 99 Section 1702. Stamp Duty............................................................................... 100
ix INDENTURE, dated as of November 23, 1999 (the "Indenture"), among APACHE FINANCE CANADA CORPORATION, an unlimited liability company duly organized and existing under the laws of Nova Scotia, Canada (the "Company"), having its principal executive office located at 700-9th Ave. S.W., Alberta Canada T2P 3V4, APACHE CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (the "Guarantor"), having its principal executive office located at One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400, and THE CHASE MANHATTAN BANK, a banking corporation duly organized and existing under the laws of the State of New York (the "Trustee"), having its Corporate Trust Office located at 450 West 33rd Street, 15th Floor, New York, New York 10001. RECITALS The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior unsecured debentures, notes or other evidences of Indebtedness (the "Securities"), unlimited as to principal amount, to bear such rates of interest, to mature at such time or times, to be issued in one or more series and to have such other provisions as shall be fixed as provided in this Indenture. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. For value received, the Guarantor has duly authorized the execution and delivery of this Indenture to provide for the issuance of the Guarantees by it with respect to the Securities as set forth in this Indenture. The Guarantor desires to make the Guarantees provided for herein, and has determined that such Guarantees are necessary and convenient to the conduct of the business of the Company, an indirect, wholly-owned subsidiary of the Guarantor. All things necessary to make the Guarantees, when executed by the Guarantor and endorsed on the Securities authenticated and delivered hereunder, the valid obligations of the Guarantor, and to make this Indenture a valid agreement of the Guarantor, in accordance with its terms, have been done. This Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder that are required to be part of this Indenture and, to the extent applicable, shall be governed by such provisions. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders (as herein defined) thereof, it is mutually covenanted and agreed, for the equal and 1 proportionate benefit of all Holders of the Securities or of any series thereof and any Coupons (as herein defined) as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions. Except as otherwise expressly provided in or pursuant to this Indenture or unless the context otherwise requires, for all purposes of this Indenture: (a) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) 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 terms "generally accepted accounting principles" or "GAAP" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; (d) the words "herein", "hereof", "hereto" 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 (e) the word "or" is always used inclusively (for example, the phrase "A or B" means "A or B or both", not "either A or B but not both"). Certain terms used principally in certain Articles hereof are defined in those Articles. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect of certain taxes, assessments or other governmental charges imposed on Holders specified therein and which are owing to such Holders. 2 "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 the meanings correlative to the foregoing. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 611 to act on behalf of the Trustee to authenticate Securities of one or more series. "Authorized Newspaper" means a newspaper, in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are Legal Holidays in the place of publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication. "Bearer Security" means any Security in the form established pursuant to Section 201 which is payable to bearer. "Board of Directors" means, when used with reference to the Company or the Guarantor, either the board of directors of the Company or the Guarantor, as the case may be, or any duly authorized committee of such board of directors of the Company or the Guarantor, as the case may be. "Board Resolution" means, when used with reference to the Company or the Guarantor, a copy of one or more resolutions, certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case may be, to have been duly adopted by its respective Board of Directors and to be in full force and effect on the date of such certification, delivered to the Trustee. "Business Day", with respect to any Place of Payment or other location, means, unless otherwise specified with respect to any Securities pursuant to Section 301, any day other than a Saturday, Sunday or other day on which banking institutions in such Place of Payment or other location are authorized or obligated by law, regulation or executive order to close. "Change in Control" has the meaning specified in Section 1501. "Change in Control Purchase Date" has the meaning specified in Section 1501. "Change in Control Purchase Notice" has the meaning specified in Section 1501. 3 "Change in Control Purchase Price" has the meaning specified in Section 1501. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Stock" includes any stock of any class of the Company or the Guarantor, as the case may be, which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or the Guarantor, as the case may be, and which is not subject to redemption by the Company or the Guarantor, as the case may be. "Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" and "Company Order" mean, respectively, a written request or order, as the case may be, signed in the name of the Company by the Chairman of the Board of Directors, a Vice Chairman, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. "Consolidated Net Worth" has the meaning specified in Section 1005. "Conversion Event" means the cessation of use of (i) a Foreign Currency (other than the ECU and Euro) both by the government of the country or the confederation which issued such Foreign Currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, (ii) the ECU and Euro both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Union or (iii) any currency unit or composite currency other than the ECU and Euro for the purposes for which it was established. "Corporate Trust Office" means the principal corporate trust office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of original execution of this Indenture is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "Corporation" includes corporations, companies and limited liability companies and, except for purposes of Article Eight, associations and business trusts. "Coupon" means any interest coupon appertaining to a Bearer Security. 4 "Currency", with respect to any payment, deposit or other transfer in respect of the principal of or any premium or interest on or any Additional Amounts with respect to any Security, means Dollars or the Foreign Currency, as the case may be, in which such payment, deposit or other transfer is required to be made by or pursuant to the terms hereof or such Security and, with respect to any other payment, deposit or transfer pursuant to or contemplated by the terms hereof or such Security, means Dollars. "CUSIP number" means the alphanumeric designation assigned to a Security by Standard & Poor's Ratings Services, CUSIP Service Bureau. "Defaulted Interest" has the meaning specified in Section 307. "Dollars" or "$" means a dollar or other equivalent unit of legal tender for payment of public or private debts in the United States of America. "ECU" means the European Currency Units as defined and revised from time to time by the Council of the European Community. "Euro" means the lawful currency of the member states of the European Union that adopt the single currency in accordance with the treaty establishing the European Community, as amended by the Treaty on European Union. "European Monetary System" means the European Monetary System established by the Resolution of December 5, 1978 of the Council of the European Community. "European Union" means the European Community, the European Coal and Steel Community and the European Atomic Energy Community. "Event of Default" has the meaning specified in Section 501. "Foreign Currency" means any currency, currency unit or composite currency, including, without limitation, the ECU and Euro, issued by the government of one or more countries other than the United States of America or by any recognized confederation or association of such governments. "GAAP" means such accounting principles as are generally accepted in the United States of America as of the date or time of any computation required hereunder. "Government Obligations" means securities which are (i) direct obligations of the United States of America or the other government or governments in the confederation which issued the Foreign Currency in which the principal of or any premium or interest on such Security or any Additional Amounts in respect thereof shall be payable, in each case where the payment or payments thereunder are supported by the full faith and credit of such government or governments or (ii) 5 obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such other government or governments, in each case where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States of America or such other government or governments, and which, in the case of (i) or (ii), are not callable or redeemable at the option of the issuer or issuers thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or other amount with respect to any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of or other amount with respect to the Government Obligation evidenced by such depository receipt. "Guarantee" means any guarantee of the Guarantor endorsed on a Security authenticated and delivered pursuant to this Indenture and shall include the guarantees set forth in Section 202. "Guarantor" means the Person named as "Guarantor" in the first paragraph of this Indenture until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "guarantor" shall include such successor corporation. "Guarantor Request" and "Guarantor Order" mean, respectively, a written request or order, as the case may be, signed in the name of the Guarantor by the Chairman of the Board, a Vice Chairman, the President or a Vice President, and by the Treasurer or an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Guarantor and delivered to the Trustee. "Holder", in the case of any Registered Security, means the Person in whose name such Security is registered in the Security Register and, in the case of any Bearer Security, means the bearer thereof and, in the case of any Coupon, means the bearer thereof. "Indebtedness", with respect to any Person, means (a) indebtedness for borrowed money and deferred payment obligations representing the unpaid purchase price of real or personal property of, or guaranteed by, such Person, other than accounts payable arising in the ordinary course of business payable on terms customary in the trade, (b) indebtedness secured by s or payable out of the proceeds of production from property, (c) indebtedness which is evidenced by mortgages, notes, bonds, debentures, acceptances or other instruments, (d) indebtedness which must be capitalized as liabilities under GAAP, (e) liabilities under interest rate swap, exchange, collar or cap agreements and all other agreements or arrangements designed to protect against fluctuations in interest rates or currency exchange rates, (f) liabilities under commodity hedge, commodity swap, exchange, collar or cap agreements, fixed price agreements and all other agreements or arrangements designed to protect against fluctuations in oil and gas prices, (g) guarantees and endorsements of obligations of others, directly or indirectly, and all other repurchase agreements and indebtedness in effect guaranteed 6 through an agreement, contingent or otherwise, to purchase such indebtedness, or to purchase or sell property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of the indebtedness or to assure the owner of the indebtedness against loss, or to supply funds to or in any manner invest in the debtor, or otherwise to assure a creditor against loss (but excluding guarantees and endorsements of notes, bills and checks made in the ordinary course of business); and (h) indebtedness relative to the amount of all letters of credit; provided, however, that such term shall not include any amounts included as deferred credits on the financial statements of such Person or of a consolidated group including such Person, and computed in accordance with GAAP. "Indenture" means this instrument 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, with respect to any Security, by the terms and provisions of such Security and any Coupon appertaining thereto established pursuant to Section 301 (as such terms and provisions may be amended pursuant to the applicable provisions hereof). "Independent Public Accountants" means accountants or a firm of accountants that, with respect to the Company, the Guarantor and any other obligor under the Securities, the Guarantees or the Coupons, are independent public accountants within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder, who may be the independent public accountants regularly retained by the Company, the Guarantor or any such other obligor or who may be other independent public accountants. Such accountants or firm shall be entitled to rely upon any Opinion of Counsel as to the interpretation of any legal matters relating to this Indenture or certificates required to be provided hereunder. "Indexed Security" means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the principal face amount thereof at original issuance. "Interest", with respect to any Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity and, when used with respect to a Security which provides for the payment of Additional Amounts pursuant to Section 1004, includes such Additional Amounts. "Interest Payment Date", with respect to any Security, means the Stated Maturity of an installment of interest on such Security. "Judgment Currency" has the meaning specified in Section 116. "Legal Holidays", with respect to any Place of Payment or other location, means a Saturday, a Sunday or a day on which banking institutions in such Place of Payment or other location are not authorized or obligated to be open. "Lien" has the meaning specified in Section 1005. 7 "Limited Recourse Indebtedness" means Indebtedness of a Person for which there is no recourse whatsoever to such Person for the repayment thereof other than recourse limited to the cash flow from the assets constituting collateral therefor and recourse to the extent necessary to enable amounts to be claimed in respect of such Indebtedness upon an enforcement of any on any such assets; provided that (a) the extent of such recourse is limited solely to the amount of any recoveries made on any such enforcement, and (b) the holder of such Indebtedness is not entitled, by virtue of any right or claim arising out of or in connection with such Indebtedness to commence proceedings for the winding up or dissolution of, or to appoint or procure the appointment of any receiver, trustee or similar person or official in respect of, such Person or any of its assets (other than the assets the subject of such ). "Maturity", with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as provided in or pursuant to this Indenture, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or repurchase, notice of option to elect repayment or otherwise, and includes the Redemption Date and Change in Control Purchase Date. "New York Banking Day" has the meaning specified in Section 116. "Office" or "Agency", with respect to any Securities, means an office or agency of the Company and the Guarantor maintained or designated in a Place of Payment for such Securities pursuant to Section 1002 or any other office or agency of the Company maintained or designated for such Securities pursuant to Section 1002 or, to the extent designated or required by Section 1002 in lieu of such office or agency, the Corporate Trust Office of the Trustee. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company or the Guarantor, as applicable, that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of or counsel for the Company or the Guarantor, as the case may be, or other counsel who shall be reasonably acceptable to the Trustee, that, if required by the Trust Indenture Act, complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee. "Ordinary Course " has the meaning specified in Section 1005. "Original Issue Discount Security" means a Security issued pursuant to this Indenture which provides for declaration of an amount less than the principal face amount thereof to be due and payable upon acceleration pursuant to Section 502. 8 "Outstanding", when used with respect to any Securities, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except: (a) any such Security theretofore canceled by the Trustee or the Security Registrar or delivered to the Trustee or the Security Registrar for cancellation; (b) any such Security for whose payment either at the Maturity thereof or upon the Company becoming obligated (subject to withdrawal of any Change in Control Purchase Notice) to pay the Change in Control Purchase Price, money in the necessary amount has been theretofore deposited pursuant hereto (other than pursuant to Section 402) with the Trustee or any Paying Agent (other than the Company or the Guarantor) in trust or set aside and segregated in trust by the Company or the Guarantor, as the case may be (if the Company or the Guarantor shall act as its own Paying Agent), for the Holders of such Securities and any Guarantees or Coupons appertaining thereto, 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; (c) any such Security with respect to which the Company or the Guarantor has effected defeasance or covenant defeasance pursuant to Section 402, except to the extent provided in Section 402; and (d) any such Security which has been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, unless there shall have been presented to the Trustee proof satisfactory to it that such Security is held by a bona fide purchaser in whose hands such Security is a valid obligation of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders of Securities for quorum purposes, (i) the principal amount of an Original Issue Discount Security that may be counted in making such determination and that shall be deemed to be Outstanding for such purposes shall be equal to the amount of the principal thereof that pursuant to the terms of such Original Issue Discount Security would be declared (or shall have been declared to be) due and payable upon a declaration of acceleration thereof pursuant to Section 502 at the time of such determination, and (ii) the principal amount of any Indexed Security that may be counted in making such determination and that shall be deemed outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided in or pursuant to this Indenture, and (iii) the principal amount of a Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Security, of the principal amount (or, in the case of 9 an Original Issue Discount Security, the Dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, and (iv) Securities beneficially owned by the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company, the Guarantor or such other obligor, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making any such determination or relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee knows to be so owned shall be so disregarded. Securities so owned which shall have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee (A) the pledgee's right so to act with respect to such Securities and (B) that the pledgee is not the Company, the Guarantor or any other obligor upon the Securities or any Coupons appertaining thereto or an Affiliate of the Company, the Guarantor or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of, or any premium or interest on, or any Additional Amounts with respect to, any Security or any Coupon on behalf of the Company. "Person" means any individual, Corporation, partnership, joint venture, joint-stock company, limited liability company and, except for purposes of Article Eight, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", with respect to any Security, means the place or places where the principal of, or any premium or interest on, or any Additional Amounts with respect to such Security are payable as provided in or pursuant to this Indenture or such Security. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same Indebtedness as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a lost, destroyed, mutilated or stolen Security or any Security to which a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to evidence the same Indebtedness as the lost, destroyed, mutilated or stolen Security or the Security to which a mutilated, destroyed, lost or stolen Coupon appertains. "Redemption Date", with respect to any Security or portion thereof to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture or such Security. "Redemption Price", with respect to any Security or portion thereof to be redeemed, means the price at which it is to be redeemed as determined by or pursuant to this Indenture or such Security. "Registered Security" means any Security established pursuant to Section 201 which is registered in the Security Register. 10 "Regular Record Date" for the interest payable on any Registered Security on any Interest Payment Date therefor means the date, if any, specified in or pursuant to this Indenture or such Security as the "Regular Record Date". "Required Currency" has the meaning specified in Section 116. "Responsible Officer" means, when used with respect to the Trustee, any officer of the Trustee in its Corporate Trust Office with direct responsibility for the administration of this Indenture 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. "Sale\Leaseback Transaction" has the meaning specified in Section 1006. "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, authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, "Securities", with respect to any such Person, shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not Trustee. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness" means the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following, whether outstanding as of the date of execution of this Indenture or thereafter incurred, created or assumed: (a) all Indebtedness of the Guarantor, the Company or any other Subsidiary, as applicable, for money borrowed (including, without limitation, any indebtedness secured by a mortgage, conditional sales contract or other lien which is (i) given to secure all or part of the purchase price of property subject thereto, whether given to the vendor of such property or to another, or (ii) existing on property at the time of acquisition thereof); (b) all Indebtedness of the Guarantor, the Company or any other Subsidiary, as applicable, evidenced by notes, debentures, bonds, commercial paper or other securities sold by the Guarantor, the Company or any other Subsidiary, as applicable, for money; (c) all lease obligations of the Guarantor, the Company or any other Subsidiary, as applicable, which are capitalized on the books of the Guarantor or the Company in accordance with generally accepted accounting principles; (d) all Indebtedness of others of the kinds described in either of the preceding clauses (a) or (b) and all lease obligations of others of the kind described in the preceding 11 clause (c) assumed by or guaranteed in any manner by the Guarantor, the Company or any other Subsidiary or in effect guaranteed by the Guarantor, the Company or any other Subsidiary, as applicable, through an agreement to purchase, contingent or otherwise; (e) all obligations of the Guarantor, the Company or any other Subsidiary, as applicable, with respect to letters of credit issued in connection with indebtedness of others of the kind described in the preceding clauses (a) or (b) or lease obligations of the kind described in the preceding clause (c); and (f) all renewals, extensions or refundings of indebtedness of the kinds described in any of the preceding clauses (a), (b) and (d), all renewals or extensions of lease obligations of the kinds described in either of the preceding clauses (c) and (d) and all renewals or extensions of obligations with respect to letters of credit of the kind described in the preceding clause (e); which, in each case, is an obligation payable by its terms more than one year from the date of incurrence thereof and should be shown on a balance sheet as a liability under GAAP; unless, in the case of any particular indebtedness, lease, obligation, renewal, extension or refunding, the instrument or lease creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebtedness, lease, obligation, renewal, extension or refunding is subordinate in right of payment to or is not at least pari passu with the Securities or the Guarantees. Notwithstanding the foregoing, "Senior Indebtedness" does not include indebtedness owing, directly or indirectly, to any Affiliate or employee of the Guarantor or the Company, as applicable, or arising under or in respect of any employee benefit plan of the Guarantor, the Company or any of their respective Affiliates. "Special Record Date" for the payment of any Defaulted Interest on any Registered Security means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity" with respect to any Security or any installment of principal thereof or interest thereon or any Additional Amounts with respect thereto, means the date established by or pursuant to this Indenture or such Security as the fixed date on which the principal of such Security or such installment of principal or interest is, or such Additional Amounts are, due and payable. "Subsidiary" means any Corporation of which at the time of determination the Guarantor, the Company or one or more other Subsidiaries owns or controls directly or indirectly more than 50% of the shares of Voting Stock. "Subsidiary Assignee" shall have the meaning set forth in Section 802. "Successor" shall have the meaning set forth in Section 802. "Successor Additional Amounts" shall have the meaning set forth in Section 802. 12 "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, and any reference herein to the Trust Indenture Act or a particular provision thereof shall mean such Act or provision, as the case may be, as amended or replaced from time to time or as supplemented from time to time by rules or regulations adopted by the Commission under or in furtherance of the purposes of such Act or provision, as the case may be. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean each Person who is then a Trustee hereunder; provided, however, that if at any time there is more than one such Person, "Trustee" shall mean each such Person and as used with respect to the Securities of any series shall mean the Trustee with respect to the Securities of such series. "United States", except as otherwise provided in or pursuant to this Indenture or any Security, means the United States of America (including the states thereof and the District of Columbia), its territories and possessions and other areas subject to its jurisdiction. "United States Alien", except as otherwise provided in or pursuant to this Indenture or any Security, means any Person who, for United States Federal income tax purposes, is (i) a foreign corporation, (ii) a non-resident alien individual, (iii) a non-resident alien fiduciary of a foreign estate, (iv) any trust unless (A) a court within the United States may exercise primary supervision over the trust's administration, and (B) one or more United States Aliens has the authority to control all substantial decisions of the trust, or (v) a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a Person described in any of clauses (i) through (iv) above. "U.S. Depository" or "Depository" means, with respect to any Security issuable or issued in the form of one or more global Securities, the Person designated as U.S. Depository or Depository by the Company in or pursuant to this Indenture, which Person must be, to the extent required by applicable law or regulation, a clearing agency registered under the Securities Exchange Act of 1934, as amended, and, if so provided with respect to any Security, any successor to such Person. If at any time there is more than one such Person, "U.S. Depository" or "Depository" shall mean, with respect to any Securities, the qualifying entity which has been appointed with respect to such Securities. "Vice President", when used with respect to the Guarantor, the Company 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". "Voting Stock" means stock of a Corporation of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such Corporation provided that, for the purposes hereof, stock which carries 13 only the right to vote conditionally on the happening of an event shall not be considered voting stock whether or not such event shall have happened. Section 102. Compliance Certificates and Opinions. Except as otherwise expressly provided in this Indenture, upon any application or request by the Guarantor or the Company, as applicable, to the Trustee to take any action under any provision of this Indenture, the Guarantor or the Company, as the case may be, 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 or any of them is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. 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 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 the Guarantor or the Company, as applicable, may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such officer knows, or in the exercise of reasonable care should know, that the opinion with respect to the matters upon which his certificate or opinion is based are erroneous. Any such 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 the Guarantor or the Company, as applicable, stating that the information with respect to such factual matters is in the possession of the Guarantor or the Company, as applicable, 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 or any Security, they may, but need not, be consolidated and form one instrument. 14 Section 104. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by or pursuant to this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. If, but only if, Securities of a series are issuable as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided in or pursuant to this Indenture to be given or taken by Holders of Securities of such series may, alternatively, be embodied in and evidenced by the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly called and held in accordance with the provisions of Article Fifteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Guarantor or the Company, as the case may be. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments or so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee, the Guarantor or the Company, and any agent of the Trustee or the Company or the Guarantor, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 1406. Without limiting the generality of this Section 104, unless otherwise provided in or pursuant to this Indenture, a Holder, including a U.S. Depository that is a Holder of a global Security, may make, give or take, by a proxy, or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other Act provided in or pursuant to this Indenture to be made, given or taken by Holders, and a U.S. Depository that is a Holder of a global Security may provide its proxy or proxies to the beneficial owners of interests in any such global Security through such U.S. Depository's standing instructions and customary practices. The Trustee may fix a record date for the purpose of determining the Persons who are beneficial owners of interest in any permanent global Security held by a U.S. Depository entitled under the procedures of such U.S. Depository to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other Act provided in or pursuant to this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other Act, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other Act shall be valid or effective if made, given or taken more than 90 days after such record date. 15 (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient and in accordance with such reasonable rules as the Trustee may determine; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. (c) The ownership, principal amount and serial numbers of Registered Securities held by any Person, and the date of the commencement and the date of the termination of holding the same, shall be proved by the Security Register. (d) The ownership, principal amount and serial numbers of Bearer Securities held by any Person, and the date of the commencement and the date of the termination of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary reasonably acceptable to the Trustee, the Guarantor and the Company, wherever situated, if such certificate shall be deemed by the Company, the Guarantor and the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Company, the Guarantor and the Trustee to be satisfactory. The Trustee, the Company and the Guarantor may assume that such ownership of any Bearer Security continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such Bearer Security is surrendered in exchange for a Registered Security, or (4) such Bearer Security is no longer Outstanding. The ownership, principal amount and serial numbers of Bearer Securities held by the Person so executing such instrument or writing and the date of the commencement and the date of the termination of holding the same may also be proved in any other manner which the Trustee, the Guarantor and the Company deem sufficient. (e) If the Company or the Guarantor shall solicit from the Holders of any Registered Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may at its option (but is not obligated to), by Board Resolution, fix in advance a record date for the determination of Holders of Registered Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of Registered Securities of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders of Registered Securities 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. 16 (f) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee, any Security Registrar, any Paying Agent or the Company or the Guarantor in reliance thereon, whether or not notation of such Act is made upon such Security. Section 105. Notices, etc. to Trustee, the Company and the Guarantor. Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (a) the Trustee by any Holder, the Guarantor or 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, Attention: Corporate Trustee Administration Department, or (b) the Guarantor or the Company by the Trustee or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Guarantor or the Company, as applicable, addressed to the attention of its Treasurer 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, the Guarantor or the Company, as applicable. Section 106. Notice to Holders of Securities; Waiver. Except as otherwise expressly provided in or pursuant to this Indenture, where this Indenture provides for notice to Holders of Securities of any event, (a) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security 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; and (b) such notice shall be sufficiently given to Holders of Bearer Securities, if any, if published in an Authorized Newspaper in The City of New York and, if such Securities are then listed on any stock exchange outside the United States, in an Authorized Newspaper in such city as the Company shall advise the Trustee that such stock exchange so requires, on a Business Day at least twice, the first such publication to be not earlier than the earliest date and the second such publication not later than the latest date prescribed for the giving of such notice. 17 In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as provided herein. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of any notice mailed to Holders of Registered Securities as provided above. Where this Indenture 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 Holders of Securities 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. Section 107. Language of Notices. Any request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English language, except that, if the Company or the Guarantor so elects, any published notice may be in an official language of the country of publication. Section 108. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with any duties under any required provision of the Trust Indenture Act imposed hereon by Section 318(c) thereof, such required provision shall control. 18 Section 109. 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 110. Successors and Assigns. All covenants and agreements in this Indenture by the Company or the Guarantor, as applicable, shall bind such party's successors and assigns, whether so expressed or not. Section 111. Separability Clause. In case any provision in this Indenture, any Security, any Coupon or any Guarantee 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 112. Benefits of Indenture. Nothing in this Indenture, any Security or any Coupon, or in any Guarantee, express or implied, shall give to any Person, other than the parties hereto, any Security Registrar, any Paying Agent and their successors hereunder and the Holders of Securities or Coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 113. Governing Law. This Indenture, the Securities, any Coupons and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in said state without regard to the conflict of laws principles thereof. Section 114. Legal Holidays. Unless otherwise specified in or pursuant to this Indenture or any Securities, in any case where any Interest Payment Date, Business Day following any Change in Control Purchase Date or Stated Maturity or Maturity of any Security shall be a Legal Holiday at any Place of Payment, then (notwithstanding any other provision of this Indenture, any Security, Coupon or Guarantee other than a provision in any Security, Coupon or Guarantee that specifically states that such provision shall apply in lieu hereof) payment need not be made at such Place of Payment on such date, and no interest shall 19 accrue on the amount payable on such date or at such time for the period from and after such Interest Payment Date, Business Day following any Change in Control Purchase Date, Stated Maturity or Maturity, as the case may be, to the next succeeding Business Day. Section 115. Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 116. Judgment Currency. Each of the Company 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, or Additional Amounts on the Securities of any series (the "Required Currency") into a currency in which a 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 preceding that on which a 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 clause (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 alternative 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 obligated by law, regulation or executive order to be closed. 20 ARTICLE TWO SECURITIES AND GUARANTEE FORMS Section 201. Forms Generally. Each Guarantee, Registered Security, Bearer Security, Coupon and temporary or permanent global Security issued pursuant to this Indenture shall be in the form established by or pursuant to a Board Resolution, an Officers' Certificate or in one or more indentures supplemental hereto, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by or pursuant to this Indenture or any indenture supplemental hereto and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Guarantee, Security or Coupon as evidenced by their execution of such Guarantee, Security or Coupon. Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall be issuable in registered form without Coupons and shall not be issuable upon the exercise of warrants. Definitive Securities and definitive Coupons and Guarantees shall be printed, lithographed or engraved or produced by any combination of these methods on a steel engraved border or steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company or the Guarantor, as the case may be, executing such Securities, Coupons or Guarantees, as evidenced by their execution of such Securities, Coupons or Guarantees. Section 202. Guarantee by Guarantor: Form of Guarantee. The Guarantor by its execution of this Indenture hereby agrees with each Holder of a Security authenticated and delivered by the Trustee, and with the Trustee on behalf of each such Holder, to be irrevocably and unconditionally bound by the terms and provisions of the Guarantee set forth below and authorizes the Chairman of the Board, the President or any Vice President or the Treasurer of the Guarantor to execute, manually or by facsimile signature in the name and on behalf of the Guarantor, and to confirm such Guarantee to the Holder of each such Security by his or her execution and delivery of each such Security, with such Guarantee endorsed thereon, authenticated and delivered by the Trustee. When delivered pursuant to the provisions of Section 303 hereof, the Guarantee so set forth on the Security shall bind the Guarantor notwithstanding the fact that such Guarantee does not bear the signature of the Guarantor. Guarantees to be endorsed on the Securities shall, subject to Section 201, be in substantially the form set forth below: 21 GUARANTEE For value received, Apache Corporation, a corporation organized under the laws of the State of Delaware (herein called the "Guarantor," which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby irrevocably and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of the Trustee and such Holder the due and punctual payment of the principal of, and any premium, and interest on, and any Additional Amounts with respect to, such Security, and any other amount due and payable pursuant to the terms of the Indenture or payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, repurchase, or otherwise, according to the terms of such Security and of the Indenture referred to therein. In case of the failure of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of Nova Scotia, Canada (the "Company," which term includes any successor corporation under such Indenture), punctually to make any such payment of principal, or any premium or interest on or any Additional Amounts with respect to such Security, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by strict and complete performance of the obligations contained in such Security and this Guarantee. The Guarantor hereby agrees that, in the event of a default in payment of principal of, or any premium or interest on, or any Additional Amounts with respect to, such Security, or default in any sinking fund or analogous payment referred to therein, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, on the terms and conditions set forth 22 in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Company in respect of any amounts paid to such Holder by the Guarantor on account of such Security pursuant to the provisions of this Guarantee or the Indenture; 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, and any premium and interest on, and any Additional Amounts required with respect to, all Securities issued under such Indenture shall have been paid in full. No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of principal of, any premium and interest on, and any Additional Amounts required with respect to, the Security upon which this Guarantee is endorsed. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security upon which this Guarantee is endorsed shall have been manually executed by or on behalf of the Trustee under such Indenture. All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture. This Guarantee shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of the State of New York. This Guarantee is an unsecured obligation of the Guarantor, and ranks pari passu with all other unsubordinated indebtedness of the Guarantor. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed under its corporate seal and dated the date of the Security upon which this Guarantee is endorsed. Apache Corporation By: ____________________________ Title: ___________________________ 23 Attest: __________________________ Each Guarantee shall be dated the date of the Security upon which it is endorsed. Reference is made to Article Sixteen for further provisions with respect to the Guarantees. Section 203. Form of Trustee's Certificate of Authentication. Subject to Section 611, the Trustee's certificate of authentication shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By Authorized Officer Section 204. Securities in Global Form. Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall not be issuable in temporary or permanent global form. If Securities of a series shall be issuable in global form, any such Security may provide that it or any number of such Securities shall represent the aggregate amount of all Outstanding Securities of such series (or such lesser amount as is permitted by the terms thereof) from time to time endorsed thereon and may also provide that the aggregate amount of Outstanding Securities represented thereby may from time to time be increased or reduced to reflect exchanges. Any endorsement of any Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of Outstanding Securities represented thereby shall be made in such manner and by such Person or Persons as shall be specified therein or in the Company Order or Guarantor Order to be delivered pursuant to Section 303 or 304 with respect thereto. Subject to the provisions of Section 303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order or Guarantor Order. If a Company Order or Guarantor Order pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any instructions by the Company or the Guarantor with respect to a 24 Security in global form shall be in writing but need not be accompanied by or contained in an Officers' Certificate and need not be accompanied by an Opinion of Counsel. ARTICLE THREE THE SECURITIES Section 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. With respect to any Securities to be authenticated and delivered hereunder, there shall be established in or pursuant to a Board Resolution of the Company, an Officers' Certificate of the Company or established in one or more indentures supplemental hereto, (a) the title of such Securities and the series in which such Securities shall be included; (b) any limit upon the aggregate principal amount of the Securities of such title or the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 304, 305, 306, 905 or 1107, upon repayment on part of any Registered Security of such series pursuant to Article Thirteen or pursuant to the terms of such Securities); (c) if such Securities are to be issuable as Registered Securities, as Bearer Securities or alternatively as Bearer Securities and Registered Securities, and whether the Bearer Securities are to be issuable with Coupons, without Coupons or both, and any restrictions applicable to the offer, sale or delivery of the Bearer Securities and the terms, if any, upon which Bearer Securities may be exchanged for Registered Securities and vice versa; (d) if any of such Securities are to be issuable in global form, when any of such Securities are to be issuable in global form and (i) whether such Securities are to be issued in temporary or permanent global form or both, (ii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same series and of like tenor and of any authorized form and denomination, and the circumstances under which any such exchanges may occur, if other than in the manner specified in Section 305, and (iii) the name of the Depository or the U.S. Depository, as the case may be, with respect to any global Security; 25 (e) if any of such Securities are to be issuable as Bearer Securities or in global form, the date as of which any such Bearer Security or global Security shall be dated (if other than the date of original issuance of the first of such Securities to be issued); (f) if any of such Securities are to be issuable as Bearer Securities, whether interest in respect of any portion of a temporary Bearer Security in global form payable in respect of an Interest Payment Date therefor prior to the exchange, if any, of such temporary Bearer Security for definitive Securities shall be paid to any clearing organization with respect to the portion of such temporary Bearer Security held for its account and, in such event, the terms and conditions (including any certification requirements) upon which any such interest payment received by a clearing organization will be credited to the Persons entitled to interest payable on such Interest Payment Date; (g) the date or dates, or the method or methods, if any, by which such date or dates shall be determined, on which the principal of such Securities is payable; (h) the rate or rates at which such Securities shall bear interest, if any, or the method or methods, if any, by which such rate or rates are to be determined, the date or dates, if any, from which such interest shall accrue or the method or methods, if any, by which such date or dates are to be determined, the Interest Payment Dates, if any, on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on Registered Securities on any Interest Payment Date, whether and under what circumstances Additional Amounts on such Securities or any of them shall be payable, the notice, if any, to Holders regarding the determination of interest on a floating rate Security and the manner of giving such notice, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (i) if in addition to or other than the Borough of Manhattan, The City of New York, the place or places where the principal of, any premium and interest on or any Additional Amounts with respect to such Securities shall be payable, any of such Securities that are Registered Securities may be surrendered for registration of transfer or exchange and notices or demands to or upon the Company or the Guarantor in respect of such Securities and this Indenture may be served, the extent to which, or the manner in which, any interest payment or Additional Amounts on a global Security on an Interest Payment Date, will be paid and the manner in which any principal of or premium, if any, on any global Security will be paid; (j) whether any of such Securities are to be redeemable at the option of the Company and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities may be redeemed, in whole or in part, at the option of the Company; (k) the denominations in which any of such Securities that are Registered Securities shall be issuable if other than denominations of $1,000 and any integral multiple thereof, and 26 the denominations in which any of such Securities that are Bearer Securities shall be issuable if other than the denomination of $5,000; (l) if other than the principal amount thereof, the portion of the principal amount of any of such Securities that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502 or the method by which such portion is to be determined; (m) if other than Dollars, the Foreign Currency in which payment of the principal of, any premium or interest on or any Additional Amounts with respect to any of such Securities shall be payable; (n) if the principal of, any premium or interest on or any Additional Amounts with respect to any of such Securities are to be payable, at the election of the Company or a Holder thereof or otherwise, in Dollars or in a Foreign Currency other than that in which such Securities are stated to be payable, the date or dates on which, the period or periods within which, and the other terms and conditions upon which, such election may be made, and the time and manner of determining the exchange rate between the Currency in which such Securities are stated to be payable and the Currency in which such Securities or any of them are to be paid pursuant to such election, and any deletions from or modifications of or additions to the terms of this Indenture to provide for or to facilitate the issuance of Securities denominated or payable, at the election of the Company or a Holder thereof or otherwise, in a Foreign Currency; (o) whether the amount of payments of principal of, any premium or interest on or any Additional Amounts with respect to such Securities may be determined with reference to an index, formula or other method or methods (which index, formula or method or methods may be based, without limitation, on one or more Currencies, commodities, equity indices or other indices), and, if so, the terms and conditions upon which and the manner in which such amounts shall be determined and paid or payable; (p) any deletions from, modifications of or additions to the Events of Default or covenants of the Company or the Guarantor with respect to any of such Securities, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein; (q) if either or both of Section 402(2) relating to defeasance or Section 402(3) relating to covenant defeasance shall not be applicable to the Securities of such series, or any covenants in addition to those specified in Section 402(3) relating to the Securities of such series shall be subject to covenant defeasance, and any deletions from, or modifications or additions to, the provisions of Article Four in respect of the Securities of such series; (r) if any of such Securities are to be issuable upon the exercise of warrants, and the time, manner and place for such Securities to be authenticated and delivered; 27 (s) if any of such Securities are to be issuable in global form and are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions; (t) if there is more than one Trustee, the identity of the Trustee and, if not the Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent with respect to such Securities; (u) if a Change in Control occurs, the Change in Control Purchase Price; and (v) any other terms of such Securities and any deletions from or modifications or additions to this Indenture in respect of such Securities. All Securities (and Guarantees endorsed thereon) of any one series and all Coupons, if any, appertaining to Bearer Securities of such series shall be substantially identical except as to Currency of payments due thereunder, denomination and the rate of interest, or method of determining the rate of interest, if any, Maturity, and the date from which interest, if any, shall accrue and except as may otherwise be provided by the Company in or pursuant to the Board Resolution and set forth in the Officers' Certificate or in any indenture or indentures supplemental hereto pertaining to such series of Securities. The terms of the Securities of any series may provide, without limitation, that the Securities shall be authenticated and delivered by the Trustee on original issue from time to time upon telephonic or written order of persons designated in the Officers' Certificate or supplemental indenture (telephonic instructions to be promptly confirmed in writing by such person) and that such persons are authorized to determine, consistent with such Officers' Certificate or any applicable supplemental indenture, such terms and conditions of the Securities of such series as are specified in such Officers' Certificate or supplemental indenture. All Securities of any one series need not be issued at the same time and, unless otherwise so provided by the Company, a series may be reopened for issuances of additional Securities of such series or to establish additional terms of such series of Securities. If any of the terms of the Securities of any series shall be established by action taken by or pursuant to a Board Resolution, the Board Resolutions of the Company and the Guarantor shall be delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of such series. Section 302. Currency; Denominations. Unless otherwise provided in or pursuant to this Indenture, the principal of, any premium and interest on and any Additional Amounts with respect to the Securities shall be payable in Dollars. Unless otherwise provided in or pursuant to this Indenture, Registered Securities denominated in Dollars shall be issuable in registered form without Coupons in denominations of $1,000 and any integral multiple thereof, and the Bearer Securities denominated in Dollars shall be issuable in the 28 denomination of $5,000. Securities not denominated in Dollars shall be issuable in such denominations as are established with respect to such Securities in or pursuant to this Indenture. Section 303. Execution, Authentication, Delivery and Dating. Securities shall be executed on behalf of the Company by its Chairman of the Board, one of its Vice Chairmen, its President, its Treasurer, one of its Assistant Treasurers, one of its Directors or one of its Vice Presidents under its corporate seal reproduced thereon and attested by its Secretary, its Treasurer or one of its Assistant Secretaries or Assistant Treasurers. Coupons shall be executed on behalf of the Company by the Treasurer, one of its Vice Presidents or any Assistant Treasurer of the Company. The signature of any of these officers on the Securities or any Coupons appertaining thereto may be manual or facsimile. Securities, and any Coupons appertaining thereto, bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities or Coupons. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities, together with any Coupons appertaining thereto, executed by the Company, with Guarantees endorsed thereon by the Guarantor, to the Trustee for authentication and, provided that the Board Resolutions and Officers' Certificates or supplemental indenture or indentures with respect to such Securities referred to in Section 301 and a Company Order for the authentication and delivery of such Securities and a Guarantor Order approving the delivery of the Guarantees endorsed thereon have been delivered to the Trustee, the Trustee in accordance with the Company Order and subject to the provisions hereof and of such Securities shall authenticate and deliver such Securities having such Guarantees. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities and any Coupons appertaining thereto, and the Guarantees endorsed thereon, the Trustee shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of the Trust Indenture Act) shall be fully protected in relying upon, (1) an Opinion of Counsel to the effect that: (a) the form or forms and terms of such Securities and Coupons, if any, and Guarantees have been established in conformity with the provisions of this Indenture; (b) all conditions precedent to the authentication and delivery of such Securities and Coupons, if any, appertaining thereto, have been complied with and that such Securities and Coupons, when completed by appropriate insertions, executed under the Company's corporate seal and attested by duly authorized officers of the Company, delivered by duly authorized officers of the Company to the Trustee for authentication pursuant to this Indenture, and authenticated and delivered by the Trustee and issued by the Company in the 29 manner and subject to any conditions specified in such Opinion of Counsel, will constitute legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and will entitle the Holders thereof to the benefits of this Indenture, including the Guarantee; such Opinion of Counsel need express no opinion as to the availability of equitable remedies; (c) Guarantees, when executed under the Guarantor's corporate seal and attested by duly authorized officers of the Guarantor and endorsed upon a Security that is authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any condition specified in such Opinion of Counsel, will constitute legally valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and will entitle the Holders to the benefits of this Indenture; such Opinion of Counsel need express no opinion as to the availability of equitable remedies; (d) all laws and requirements in respect of the execution and delivery by the Company of such Securities and Coupons, if any, have been complied with; and (e) this Indenture has been qualified under the Trust Indenture Act; and (2) Officers' Certificates of the Company and the Guarantor stating that, in each case, to the best knowledge of the Persons executing such certificate, no event which is, or after notice or lapse of time would become, an Event of Default with respect to any of the Securities or the Guarantees shall have occurred and be continuing. If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel and Officers' Certificates at the time of issuance of each Security, but such opinion and certificate, with appropriate modifications, shall be delivered at or before the time of issuance of the first Security of such series. After any such first delivery, any separate request by the Company that the Trustee authenticate Securities of such series for original issue will be deemed to be a certification by the Company and the Guarantor that all conditions precedent provided for in this Indenture relating to authentication and delivery of such Securities continue to have been complied with. The Trustee shall not be required to authenticate or to cause an Authenticating Agent to authenticate any Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a 30 manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken. Each Registered Security shall be dated the date of its authentication. Each Bearer Security and any Bearer Security in global form shall be dated as of the date specified in or pursuant to this Indenture. No Security or Guarantee or Coupon appertaining thereto 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 in Section 202 or 611 executed by or on behalf of the Trustee or by the Authenticating Agent by the manual signature of one of its authorized officers. Such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Except as permitted by Section 306 or 307, the Trustee shall not authenticate and deliver any Bearer Security or related Guarantee unless all Coupons appertaining thereto then matured have been detached and canceled. Section 304. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute and deliver to the Trustee and, upon Company Order and Guarantor Order, the Trustee shall authenticate and deliver, in the manner provided in Section 303, temporary Securities in lieu thereof 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, in registered form or, if authorized in or pursuant to this Indenture, in bearer form with one or more Coupons or without Coupons and having endorsed thereon Guarantees of the Guarantor substantially of the tenor of the definitive Guarantees, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities or Guarantees may determine, as conclusively evidenced by their execution of such Securities or Guarantees, as the case may be. Such temporary Securities may be in global form. Except in the case of temporary Securities in global form, which shall be exchanged in accordance with the provisions thereof, if temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities of the same series and containing terms and provisions that are identical to those of any temporary Securities, such temporary Securities shall be exchangeable for such definitive Securities with Guarantees of the Guarantor endorsed thereon upon surrender of such temporary Securities at an Office or Agency for such Securities, without charge to any Holder thereof. Upon surrender for cancellation of any one or more temporary Securities (accompanied by any unmatured Coupons appertaining thereto), the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations of the same series and containing identical terms and provisions, each with a Guarantee of the Guarantor endorsed thereon; provided, however, that no definitive Bearer Security, except as provided in or pursuant to this Indenture, shall be delivered in exchange for a temporary Registered Security; and 31 provided, further, that a definitive Bearer Security shall be delivered in exchange for a temporary Bearer Security only in compliance with the conditions set forth in or pursuant to this Indenture. Unless otherwise provided in or pursuant to this Indenture with respect to a temporary global Security, until so exchanged the temporary Securities of any 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. With respect to the Registered Securities of each series, if any, the Company shall cause to be kept a register (each such register being herein sometimes referred to as the "Security Register") at an Office or Agency for such series in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of the Registered Securities of such series and of transfers of the Registered Securities of such series. Such Office or Agency shall be the "Security Registrar" for that series of Securities. Unless otherwise specified in or pursuant to this Indenture or the Securities, the Trustee shall be the initial Security Registrar for each series of Securities. The Company shall have the right to remove and replace from time to time the Security Registrar for any series of Securities; provided that no such removal or replacement shall be effective until a successor Security Registrar with respect to such series of Securities shall have been appointed by the Company and shall have accepted such appointment by the Company. In the event that the Trustee shall not be or shall cease to be Security Registrar with respect to a series of Securities, it shall have the right to examine the Security Register for such series at all reasonable times. There shall be only one Security Register for each series of Securities. Upon surrender for registration of transfer of any Registered Security of any series at any Office or Agency for such series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series denominated as authorized in or pursuant to this Indenture, of a like aggregate principal amount bearing a number not contemporaneously outstanding and containing identical terms and provisions, having Guarantees duly endorsed thereon. At the option of the Holder, Registered Securities of any series may be exchanged for other Registered Securities of the same series containing identical terms and provisions, in any authorized denominations, and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any Office or Agency for such series. Whenever any Registered Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Registered Securities which the Holder making the exchange is entitled to receive having Guarantees duly endorsed thereon. If provided in or pursuant to this Indenture, with respect to Securities of any series, at the option of the Holder, Bearer Securities of such series may be exchanged for Registered Securities of such series containing identical terms, denominated as authorized in or pursuant to this Indenture and in the same aggregate principal amount, upon surrender of the Bearer Securities to be exchanged at any Office or Agency for such series, with all unmatured Coupons and all matured Coupons in default 32 thereto appertaining. If the Holder of a Bearer Security is unable to produce any such unmatured Coupon or Coupons or matured Coupon or Coupons in default, such exchange may be effected if the Bearer Securities are accompanied by payment in funds acceptable to the Company, the Guarantor and the Trustee in an amount equal to the face amount of such missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company, the Guarantor and the Trustee if there is furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to any Paying Agent any such missing Coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment; provided, however, that, except as otherwise provided in Section 1002, interest represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an Office or Agency for such series located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such Office or Agency for such series in exchange for a Registered Security of such series and like tenor after the close of business at such Office or Agency on (i) any Regular Record Date and before the opening of business at such Office or Agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such Office or Agency on the related date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the Coupon relating to such Interest Payment Date or proposed date of payment, as the case may be (or, if such Coupon is so surrendered with such Bearer Security, such Coupon shall be returned to the Person so surrendering the Bearer Security), and interest or Defaulted Interest, as the case may be, shall not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but shall be payable only to the Holder of such Coupon when due in accordance with the provisions of this Indenture. If provided in or pursuant to this Indenture with respect to Securities of any series, at the option of the Holder, Registered Securities of such series may be exchanged for Bearer Securities upon such terms and conditions as may be provided in or pursuant to this Indenture with respect to such series. Whenever any Securities are surrendered for exchange as contemplated by the immediately preceding two paragraphs, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities, having endorsed thereon Guarantees of the Guarantor, which the Holder making the exchange is entitled to receive. Notwithstanding the foregoing, except as otherwise provided in or pursuant to this Indenture, any global Security shall be exchangeable for definitive Securities only if (i) the Depository is at any time unwilling, unable or ineligible to continue as Depository and a successor depository is not appointed by the Company within 90 days of the date the Company is so informed in writing, (ii) the Company executes and delivers to the Trustee a Company Order to the effect that such global Security shall be so exchangeable, or (iii) an Event of Default has occurred and is continuing with respect to the Securities. If the beneficial owners of interests in a global Security are entitled to exchange such interests for definitive Securities as the result of an event described in clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee 33 definitive Securities in such form and denominations as are required by or pursuant to this Indenture, and of the same series, containing identical terms and in aggregate principal amount equal to the principal amount of such global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such global Security shall be surrendered from time to time by the U.S. Depository or such other Depository as shall be specified in the Company Order with respect thereto, and in accordance with instructions given to the Trustee and the U.S. Depository or such other Depository, as the case may be (which instructions shall be in writing but need not be contained in or accompanied by an Officers' Certificate or be accompanied by an Opinion of Counsel), as shall be specified in the Company Order with respect thereto to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or in part, for definitive Securities as described above without charge. The Trustee shall authenticate and make available for delivery, in exchange for each portion of such surrendered global Security, a like aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor as the portion of such global Security to be exchanged, which (unless such Securities are not issuable both as Bearer Securities and as Registered Securities, in which case the definitive Securities exchanged for the global Security shall be issuable only in the form in which the Securities are issuable, as provided in or pursuant to this Indenture) shall be in the form of Bearer Securities or Registered Securities, or any combination thereof, as shall be specified by the beneficial owner thereof, but subject to the satisfaction of any certification or other requirements to the issuance of Bearer Securities; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of the same series to be redeemed and ending on the relevant Redemption Date; and provided, further, that (unless otherwise provided in or pursuant to this Indenture) no Bearer Security delivered in exchange for a portion of a global Security shall be mailed or otherwise delivered to any location in the United States. Promptly following any such exchange in part, such global Security shall be returned by the Trustee to such Depository or the U.S. Depository, as the case may be, or such other Depository or U.S. Depository referred to above in accordance with the instructions of the Company referred to above. If a Registered Security is issued in exchange for any portion of a global Security after the close of business at the Office or Agency for such Security where such exchange occurs on or after (i) any Regular Record Date for such Security and before the opening of business at such Office or Agency on the next Interest Payment Date, or (ii) any Special Record Date for such Security and before the opening of business at such Office or Agency on the related proposed date for payment of interest or Defaulted Interest, as the case may be, interest shall not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Registered Security, but shall be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such global Security shall be payable in accordance with the provisions of this Indenture. All Securities issued upon any registration of transfer or exchange of Securities and all Guarantees endorsed thereon shall be the valid obligations of the Company or the Guarantor, as the case may be, evidencing the same debt and entitling the Holders thereof to the same benefits under this Indenture as the Securities and Guarantees endorsed thereon surrendered upon such registration of transfer or exchange. 34 Every Registered Security presented or surrendered for registration of transfer or for exchange or redemption shall (if so required by the Company or the Security Registrar for such Security) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar for such Security duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange, or redemption of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge. Except as otherwise provided in or pursuant to this Indenture, the Company shall not be required (i) to issue, register the transfer of or exchange any Securities during a period beginning at the opening of business 15 days before the day of the selection for redemption of Securities of like tenor and the same series under Section 1103 and ending at the close of business on the day of such selection, or (ii) to register the transfer of or exchange any Registered Security so selected for redemption in whole or in part, except in the case of any Security to be redeemed in part, the portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so selected for redemption except, to the extent provided with respect to such Bearer Security, that such Bearer Security may be exchanged for a Registered Security of like tenor and the same series, provided that such Registered Security shall be immediately surrendered for redemption with written instruction for payment consistent with the provisions of this Indenture or (iv) to issue, register the transfer of or exchange any Security which, in accordance with its terms, has been surrendered for repayment at the option of the Holder, except the portion, if any, of such Security not to be so repaid. Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security or a Security with a mutilated Coupon appertaining to it is surrendered to the Trustee, subject to the provisions of this Section 306, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series containing identical terms and of like principal amount, having endorsed thereon the Guarantee of the Guarantor and bearing a number not contemporaneously outstanding, with Coupons appertaining thereto corresponding to the Coupons, if any, appertaining to the surrendered Security. If there be delivered to the Company, the Guarantor and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security or Coupon, and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Security or Coupon has been acquired by a bona fide purchaser, the Company shall execute and, upon Company Request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Security or in exchange for the Security to which a destroyed, lost or stolen Coupon appertains with all appurtenant Coupons not destroyed, lost or stolen, a new Security of the same series containing identical terms and of like principal amount having endorsed thereon the Guarantee of the Guarantor and bearing a number not contemporaneously outstanding, with Coupons 35 corresponding to the Coupons, if any, appertaining to such destroyed, lost or stolen Security or to the Security to which such destroyed, lost or stolen Coupon appertains. Notwithstanding the foregoing provisions of this Section 306, in case any mutilated, destroyed, lost or stolen Security or Coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security or Coupon; provided, however, that principal of, any premium or interest on or any Additional Amounts with respect to any Bearer Securities shall, except as otherwise provided in Section 1002, be payable only at an Office or Agency for such Securities located outside the United States and, unless otherwise provided in or pursuant to this Indenture, any interest on Bearer Securities and any Additional Amounts with respect to such interest shall be payable only upon presentation and surrender of the Coupons appertaining thereto. Upon the issuance of any new Security under this Section, the Company 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. Every new Security, with any Coupons appertaining thereto, and the Guarantee of the Guarantor endorsed thereon, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security, or in exchange for a Security to which a destroyed, lost or stolen Coupon appertains shall constitute a separate obligation of the Company and the Guarantor, respectively, whether or not the destroyed, lost or stolen Security and Coupons appertaining thereto or the destroyed, lost or stolen Coupon 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 such series and any Coupons and related Guarantees duly issued hereunder. The provisions of this Section, as amended or supplemented pursuant to this Indenture with respect to particular Securities or generally, shall be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons. Section 307. Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional Amounts Preserved. Unless otherwise provided in or pursuant to this Indenture, any interest on and any Additional Amounts with respect to any Registered Security which shall be payable, and are punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered as of the close of business on the Regular Record Date for such interest. Unless otherwise provided in or pursuant to this Indenture, in case a Bearer Security is surrendered in exchange for a Registered Security after the close of business at an Office or Agency for such Security on any Regular Record Date therefor and before the opening of business at such Office or Agency on the next succeeding Interest Payment Date therefor, such 36 Bearer Security shall be surrendered without the Coupon relating to such Interest Payment Date and interest shall not be payable on such Interest Payment Date in respect of the Registered Security issued in exchange for such Bearer Security, but shall be payable only to the Holder of such Coupon when due in accordance with the provisions of this Indenture. Unless otherwise provided in or pursuant to this Indenture, any interest on and any Additional Amounts with respect to any Registered Security which shall be payable, but shall not be punctually paid or duly provided for, on any Interest Payment Date for such Registered Security (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder thereof on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company or the Guarantor, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company or the Guarantor may elect to make payment of any Defaulted Interest to the Person in whose name such Registered Security (or a Predecessor Security thereof) shall be registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company or the Guarantor shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on such Registered Security and the date of the proposed payment, and at the same time the Company or the Guarantor, as the case may be, 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 on or prior to the date of the proposed payment, such money when so deposited to be held in trust for the benefit of the Person 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 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to the Holder of such Registered Security (or a Predecessor Security thereof) at his address as it appears in the Security Register not less than 10 days prior to such Special Record Date. The Trustee may, in its discretion, in the name and at the expense of the Company cause a similar notice to be published at least once in an Authorized Newspaper of general circulation in the Borough of Manhattan, The City of New York, but such publication shall not be a condition precedent to the establishment of 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 Person in whose name such Registered Security (or a Predecessor Security thereof) shall be registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). In case a Bearer Security is surrendered at the Office or Agency for such Security in exchange for a Registered Security after the close of business at such Office or Agency on any Special Record Date and before the opening of business at such Office or Agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the Coupon relating to such Defaulted Interest and Defaulted Interest shall not be payable on such proposed date of payment in respect of the Registered Security issued in exchange for such Bearer Security, but shall be payable only to the Holder of such Coupon when due in accordance with the provisions of this Indenture. 37 (2) The Company 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 Security may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company or the Guarantor to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. Unless otherwise provided in or pursuant to this Indenture or the Securities of any particular series, at the option of the Company, interest on Registered Securities that bear interest may be paid by mailing a check to the address of the Person entitled thereto as such address shall appear in the Security Register or by transfer to an account maintained by the payee with a bank located in the United States. Subject to the foregoing provisions of this Section and Section 305, each Security delivered under this Indenture upon registration of 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. Prior to due presentment of a Registered Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Registered Security is registered in the Security Register as the owner of such Registered Security for the purpose of receiving payment of principal of, any premium and (subject to Sections 305 and 307) interest on and any Additional Amounts with respect to such Registered Security and for all other purposes whatsoever, whether or not any payment with respect to such Registered Security shall be overdue, and neither the Company, the Guarantor nor the Trustee or any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. The Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the bearer of any Bearer Security or the bearer of any Coupon as the absolute owner of such Security or Coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not any payment with respect to such Security or Coupon shall be overdue, and neither the Company, the Guarantor nor the Trustee or any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. No holder of any beneficial interest in any global Security held on its behalf by a Depository shall have any rights under this Indenture with respect to such global Security, and such Depository may be treated by the Company, the Guarantor, the Trustee, and any agent of the Company, the Guarantor or the Trustee as the owner of such global Security for all purposes whatsoever. None of the Company, the Guarantor, 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 38 beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Section 309. Cancellation. All Securities and Coupons surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Coupons, as well as Securities and Coupons surrendered directly to the Trustee for any such purpose, shall be canceled promptly by the Trustee. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Securities or Coupons previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and all Securities or Coupons so delivered shall be canceled promptly by the Trustee. No Securities or Coupons shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by or pursuant to this Indenture. All canceled Securities and Coupons held by the Trustee shall be destroyed by the Trustee, unless by a Company Order or Guarantor Order, the Company or the Guarantor directs their return to it. Section 310. Computation of Interest. Except as otherwise provided in or pursuant to this Indenture or in any Security, interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE FOUR SATISFACTION AND DISCHARGE OF INDENTURE Section 401. Satisfaction and Discharge. Upon the direction of the Company by a Company Order or the Guarantor by a Guarantor Order, this Indenture shall cease to be of further effect with respect to any series of Securities specified in such Company Order or Guarantor Order and any Coupons appertaining thereto, and the Trustee, on receipt of a Company Order or Guarantor Order, at the expense of the Company and the Guarantor, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture as to such series, when (1) either (a) all Securities of such series theretofore authenticated and delivered and all Coupons appertaining thereto (other than (i) Coupons appertaining to Bearer Securities of such series surrendered in exchange for Registered Securities of such series and maturing after such exchange whose surrender is not required or has been waived as provided in Section 305, (ii) Securities and Coupons of such series which have been destroyed, lost or 39 stolen and which have been replaced or paid as provided in Section 306, (iii) Coupons appertaining to Securities of such series called for redemption and maturing after the relevant Redemption Date whose surrender has been waived as provided in Section 1107, and (iv) Securities and Coupons of such series for whose payment money in the applicable Currency has theretofore been deposited in trust or segregated and held in trust by the Company or the Guarantor and thereafter repaid to the Company or the Guarantor or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (b) all Securities of such series and, in the case of (i) or (ii) below, any Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, 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 Company, and the Company 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 such purpose, money in the Currency in which such Securities are payable in an amount sufficient to pay and discharge the entire indebtedness on such Securities and any Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation, including the principal of, any premium and interest on, and any Additional Amounts with respect to such Securities and any Coupons appertaining thereto, to the date of such deposit (in the case of Securities which have become due and payable) or to the Maturity thereof, as the case may be; (2) the Company or the Guarantor, as the case may be, has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Securities of such series and any Coupons appertaining thereto; and (3) the Company or the Guarantor, as the case may be, 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 as to such series have been complied with. In the event there are Securities of two or more series hereunder, the Trustee shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of such series as to which it is Trustee and if the other conditions thereto are met. 40 Notwithstanding the satisfaction and discharge of this Indenture with respect to any series of Securities, the obligations of the Company and the Guarantor to the Trustee under Section 606 and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations of the Trustee, the Guarantor and the Company with respect to the Securities of such series under Sections 305, 306, 403, 1002 and 1003, with respect to the payment of Additional Amounts, if any, with respect to such Securities as contemplated by Section 1004 (but only to the extent that the Additional Amounts payable with respect to such Securities exceed the amount deposited in respect of such Additional Amounts pursuant to Section 401(1)(b)), shall survive. Section 402. Defeasance and Covenant Defeasance. (1) Unless, pursuant to Section 301, either or both of (i) defeasance of the Securities of or within a series under clause (2) of this Section 402, or (ii) covenant defeasance of the Securities of or within a series under clause (3) of this Section 402 shall not be applicable with respect to the Securities of such series, then such provisions, together with the other provisions of this Section 402 (with such modifications thereto as may be specified pursuant to Section 301 with respect to any Securities), shall be applicable to such Securities and any Coupons appertaining thereto, and the Company may at its option by Board Resolution or Officers' Certificate, at any time, with respect to such Securities and any Coupons appertaining thereto, elect to have Section 402(2) or Section 402(3) be applied to such Outstanding Securities and any Coupons appertaining thereto upon compliance with the conditions set forth below in this Section 402. (2) Upon the Company's exercise of the above option applicable to this Section 402(2) with respect to any Securities of or within a series, the Company and the Guarantor shall be deemed to have been discharged from their respective obligations with respect to such Outstanding Securities and any Coupons appertaining thereto, and with respect to the Guarantees endorsed thereon, on the date the conditions set forth in clause (4) of this Section 402 are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company and the Guarantor shall be deemed to have paid and discharged the entire Indebtedness represented by such Outstanding Securities and any Coupons appertaining thereto, and such corresponding Guarantees, which shall thereafter be deemed to be "Outstanding" only for the purposes of clause (5) of this Section 402 and the other Sections of this Indenture referred to in clauses (i) and (ii) below, and to have satisfied all of its other obligations under such Securities and any Coupons appertaining thereto and this Indenture insofar as such Securities and any Coupons appertaining thereto are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Outstanding Securities and any Guarantees and Coupons appertaining thereto to receive, solely from the trust fund described in clause (4) of this Section 402 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest, if any, on, and Additional Amounts, if any, with respect to, such Securities and any Coupons appertaining thereto when such payments are due, (ii) the obligations of the Company and the Trustee with respect to such Securities under Sections 305, 306, 1002 and 1003, with respect to the payment of Additional Amounts, if any, on such Securities as contemplated by Section 1004 (but only to the extent that the 41 Additional Amounts payable with respect to such Securities exceed the amount deposited in respect of such Additional Amounts pursuant to Section 401(4)(a) below), and any obligations of the Guarantor relating to a surviving obligation of the Company, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 402. The Company may exercise its option under this Section 402(2) notwithstanding the prior exercise of its option under clause (3) of this Section 402 with respect to such Securities and any Coupons appertaining thereto. (3) Upon the Company's exercise of the above option applicable to this Section 402(3) with respect to any Securities of or within a series, the Company and the Guarantor shall be released from their respective obligations under Sections 1005 and 1006, and, to the extent specified pursuant to Section 301, any other covenant applicable to such Securities or the Guarantees endorsed thereon, with respect to such Outstanding Securities and any Coupons appertaining thereto on and after the date the conditions set forth in clause (4) of this Section 402 are satisfied (hereinafter, "covenant defeasance"), and such Securities and any Coupons appertaining thereto shall thereafter be deemed to be not "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with any such covenant, but shall continue to be deemed "Outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to such Outstanding Securities and any Coupons appertaining thereto and the Guarantees endorsed thereon, the Company and the Guarantor may omit to comply with, and shall have no liability in respect of, any term, condition or limitation set forth in any such Section or such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under Section 501(3) or 501(4) or otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and such Securities and Coupons appertaining thereto and the Guarantees endorsed thereon shall be unaffected thereby. (4) The following shall be the conditions to application of clause (2) or (3) of this Section 402 to any Outstanding Securities of or within a series and any Coupons appertaining thereto and the Guarantees endorsed thereon: (a) The Company or the Guarantor shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 607 who shall agree to comply with the provisions of this Section 402 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities and any Coupons appertaining thereto, (1) an amount in Dollars or in such Foreign Currency in which such Securities and any Coupons appertaining thereto are then specified as payable at Stated Maturity, or 42 (2) Government Obligations applicable to such Securities and Coupons appertaining thereto (determined on the basis of the Currency in which such Securities and Coupons appertaining thereto are then specified as payable at Stated Maturity) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on such Securities and any Coupons appertaining thereto, money in an amount, or (3) a combination thereof, in any case, in an amount, sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of (and premium, if any) and interest, if any, on such Outstanding Securities and any Coupons appertaining thereto on the Stated Maturity of such principal or installment of principal or interest on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities and any Coupons appertaining thereto. (b) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or the Guarantor is a party or by which either of them is bound. (c) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Securities and any Coupons appertaining thereto shall have occurred and be continuing on the date of such deposit and, with respect to defeasance only, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period). (d) In the case of an election under clause (2) of this Section 402, the Company or the Guarantor shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company or the Guarantor has received from the Internal Revenue Service a letter ruling, or there has been published by the Internal Revenue Service a Revenue Ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of such Outstanding Securities and any Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. 43 (e) In the case of an election under clause (3) of this Section 402, the Company and the Guarantor shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Outstanding Securities and any Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred. (f) The Company and the Guarantor shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance under clause (2) or (3) of this Section 402 (as the case may be) have been complied with. (g) Notwithstanding any other provisions of this Section 402(4), such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Company or the Guarantor in connection therewith pursuant to Section 301. (5) Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations (or other property as may be provided pursuant to Section 301) (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 402(5) and Section 403, the "Trustee") pursuant to clause (4) of Section 402 in respect of any Outstanding Securities of any series and any Coupons appertaining thereto shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and any Coupons appertaining thereto and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities and any Coupons appertaining thereto of all sums due and to become due thereon in respect of principal (and premium, if any) and interest and Additional Amounts, if any, but such money need not be segregated from other funds except to the extent required by law. Unless otherwise specified in or pursuant to this Indenture or any Security, if, after a deposit referred to in Section 402(4)(a) has been made, (a) the Holder of a Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 301 or the terms of such Security to receive payment in a Currency other than that in which the deposit pursuant to Section 402(4)(a) has been made in respect of such Security, or (b) a Conversion Event occurs in respect of the Foreign Currency in which the deposit pursuant to Section 402(4)(a) has been made, the indebtedness represented by such Security and any Coupons appertaining thereto and the Guarantees endorsed thereon shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any), and interest, if any, on, and Additional Amounts, if any, with respect to, such Security as the same becomes due out of the proceeds yielded by converting (from time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Security into the Currency in which such Security becomes payable as a result of such election or Conversion Event based on (x) in the case of payments made pursuant to clause (a) above, the applicable market exchange rate for such Currency in effect on the second Business Day 44 prior to each payment date, or (y) with respect to a Conversion Event, the applicable market exchange rate for such Foreign Currency in effect (as nearly as feasible) at the time of the Conversion Event. The Company and the Guarantor shall pay and indemnify the Trustee against any tax, fee or other charge, imposed on or assessed against the Government Obligations deposited pursuant to this Section 402 or the principal or interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of such Outstanding Securities and any Coupons appertaining thereto. Anything in this Section 402 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request, or the Guarantor, as the case may be, upon Guarantor's Request, any money or Government Obligations (or other property and any proceeds therefrom) held by it as provided in clause (4) of this Section 402 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect a defeasance or covenant defeasance, as applicable, in accordance with this Section 402. Section 403. Application of Trust Money. Subject to the provisions of the last paragraph of Section 1003, all money and Government Obligations deposited with the Trustee pursuant to Section 401 or 402 shall be held in trust and applied by it, in accordance with the provisions of the Securities, the Coupons and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or the Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal, premium, interest and Additional Amounts for whose payment such money has or Government Obligations have been deposited with or received by the Trustee; but such money and Government Obligations need not be segregated from other funds except to the extent required by law. Section 404. Reinstatement. If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture, such Securities and the related Guarantees from which the Company or the Guarantor, as the case may be, has been discharged or released pursuant to this Article shall be revived and reinstated as though no deposit has occurred pursuant to this Article with respect to such Securities and the related Guarantees, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to this Article with respect to such Securities in accordance with this Article; provided, however, that if the Company or the Guarantor makes any payment of principal of or any premium or interest on any such Security or the related Guarantee following reinstatement of 45 its obligations, the Company or the Guarantor, as the case may be, shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust. ARTICLE FIVE REMEDIES Section 501. Events of Default. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless such event is specifically deleted or modified in or pursuant to the supplemental indenture, Board Resolution or Officers' Certificate establishing the terms of such series pursuant to this Indenture: (1) failure to pay any interest on or any Additional Amounts payable in respect of any Security of such series when such interest becomes or such Additional Amounts become due and payable, and continuance of such default for a period of 30 days; or (2) failure to pay the principal of or any premium on any Security of such series when it becomes due and payable at either its Maturity or, if applicable, at 12:00 noon, New York, New York time, on the Business Day following the Change in Control Purchase Date; or (3) failure to perform or the breach of any covenant or warranty of the Company or the Guarantor in this Indenture or the Securities (other than a covenant or warranty a default in the performance or the breach of which is elsewhere in this Section specifically dealt with or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than such series), and continuance of such failure or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Company, the Guarantor 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 failure or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (4) if any event of default as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness (other than Indebtedness constituting Limited Recourse Indebtedness) of the Company, the Guarantor or any other Subsidiary, whether such Indebtedness now exists or shall hereafter be created, shall happen and shall result in Indebtedness of the Company, the Guarantor or any other Subsidiary in excess of $25,000,000 aggregate principal amount becoming or being declared due and payable prior to the date on which such Indebtedness would otherwise become due and payable, and such acceleration shall not be rescinded or annulled, or such Indebtedness shall not have been discharged, 46 within a period of 30 days after there shall have been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Trustee, the Guarantor and the Company by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such event of default and requiring the Company or the Guarantor to cause such acceleration to be rescinded or annulled or to cause such Indebtedness to be discharged and stating that such notice is a "Notice of Default" hereunder; or (5) the Company, the Guarantor or any other Subsidiary shall fail within 60 days to pay, bond or otherwise discharge any judgment, court order or uninsured monetary damage award in excess of $25,000,000 aggregate principal amount, which is not stayed on appeal or is not otherwise being appropriately contested in good faith; or (6) the entry by a court having competent jurisdiction of: (a) a decree or order for relief in respect of the Company, the Guarantor or any other Subsidiary in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) a decree or order adjudging the Company, the Guarantor or any other Subsidiary to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of the Company, the Guarantor or any other Subsidiary and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (c) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of the Company, the Guarantor or any other Subsidiary or of any substantial part of the property of the Company, the Guarantor or any other Subsidiary, as the case may be, or ordering the winding up or liquidation of the affairs of the Company, the Guarantor or any other Subsidiary; or (7) the commencement by the Company, the Guarantor or any other Subsidiary of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by the Company, the Guarantor or any other Subsidiary to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filing by the Company, the Guarantor or any other Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by the Company, the Guarantor or any other Subsidiary to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of the Company, the Guarantor or any other Subsidiary or any substantial part of the property of the Company, the Guarantor or any other Subsidiary or the making by the Company, the Guarantor or any other Subsidiary of an assignment for the benefit of creditors, or the taking of corporate action by the Company, the Guarantor or any other Subsidiary in furtherance of any such action; or 47 (8) any other Event of Default provided in or pursuant to this Indenture with respect to Securities of such series. Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding (other than an Event of Default specified in clause (6) or (7) of Section 501) occurs and is continuing, then the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series may declare the principal of all the Securities of such series, or such lesser amount as may be provided for in the Securities of such series, to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by the Holders), and upon any such declaration such principal or such lesser amount shall become immediately due and payable. If an Event of Default specified in clause (6) or (7) of Section 501 occurs, all unpaid principal of and accrued interest on the Outstanding Securities of that series (or such lesser amount as may be provided for in the Securities of such series) shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of any Security of that series. At any time after Securities of any series have been accelerated 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 not less than a majority in principal amount of the Outstanding Securities of such series, by written notice to the Trustee, the Guarantor and the Company, may rescind and annul such declaration and its consequences if (1) the Company or the Guarantor has paid or deposited with the Trustee a sum of money sufficient to pay (a) all overdue installments of any interest on and Additional Amounts with respect to all Securities of such series and any Coupon appertaining thereto, (b) the principal of and any premium on any Securities of such series which have become due otherwise than by such declaration of acceleration and interest thereon and any Additional Amounts with respect thereto at the rate or rates borne by or provided for in such Securities, (c) to the extent that payment of such interest or Additional Amounts is lawful, interest upon overdue installments of any interest and Additional Amounts at the rate or rates borne by or provided for in such Securities, and 48 (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 606; and (2) all Events of Default with respect to Securities of such series, other than the non-payment of the principal of, any premium and interest on, and any Additional Amounts with respect to Securities of such series which shall have become due solely by such declaration of acceleration, shall 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. The Company covenants that if (1) there is a failure to pay any installment of interest on or any Additional Amounts with respect to any Security or any Coupon appertaining thereto when such interest or Additional Amounts shall have become due and payable and such default continues for a period of 30 days, or (2) there is a failure to pay the principal of or any premium on any Security at its Maturity, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities and any Coupons appertaining thereto, the whole amount of money then due and payable with respect to such Securities and any Coupons appertaining thereto, with interest upon the overdue principal, any premium and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installments of interest and Additional Amounts at the rate or rates borne by or provided for in such Securities, and, in addition thereto, such further amount of money 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 to the Trustee under Section 606. If the Company or the Guarantor fails to pay the money it is required to pay the Trustee pursuant to the preceding paragraph forthwith upon the demand of the Trustee, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the money so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or the Guarantor or any other obligor upon such Securities and any Coupons appertaining thereto or the Guarantees endorsed thereon and collect the monies adjudged or decreed to be payable in the manner provided by law out of the property of the Company, the Guarantor or any other obligor upon such Securities and any Coupons appertaining thereto or the Guarantees endorsed thereon, wherever situated. 49 If an Event of Default with respect to Securities of any series 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 and any Coupons appertaining thereto 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 such Securities or in aid of the exercise of any power granted herein or therein, 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 the Company, the Guarantor or any other obligor upon the Securities or the Guarantees endorsed thereon or the property of the Company, the Guarantor or 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 the Company or the Guarantor for the payment of any overdue principal, premium, interest or Additional Amounts) shall be entitled and empowered, by intervention in such proceeding or otherwise, (1) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Securities of such series, of the principal and any premium, interest and Additional Amounts owing and unpaid in respect of the Securities and any Coupons appertaining thereto and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents or counsel) and of the Holders of Securities or any Coupons allowed in such judicial proceeding, and (2) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities or any Coupons to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities or any Coupons, 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 606. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security or any Coupon any plan of reorganization, arrangement, adjustment or composition affecting the Securities or Coupons or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder of a Security or any Coupon in any such proceeding; provided, however, that the Trustee may, on behalf 50 of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' committee or other similar committee. Section 505. Trustee May Enforce Claims without Possession of Securities, Guarantees or Coupons. All rights of action and claims under this Indenture or any of the Securities, the Guarantees or any Coupons may be prosecuted and enforced by the Trustee without the possession of any of the Securities, Guarantees or Coupons 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 or judgment, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, shall be for the ratable benefit of each and every Holder of a Security or Coupon in respect of which such judgment has been recovered. Section 506. Application of Money Collected. Any money collected by the Trustee 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 any premium, interest or Additional Amounts, upon presentation of the Securities or Coupons, or both, as the case may be, 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 and any predecessor Trustee under Section 606; SECOND: To the payment of the amounts then due and unpaid upon the Securities and any Coupons for principal and any premium, interest and Additional Amounts 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 aggregate amounts due and payable on such Securities and Coupons for principal and any premium, interest and Additional Amounts, respectively; THIRD: The balance, if any, to the Person or Persons entitled thereto. Section 507. Limitations on Suits. No Holder of any Security of any series or any Coupons appertaining thereto shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Guarantees, the Securities of any series or any Coupons appertaining thereto, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless 51 (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the 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 reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (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 of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or any Security or Guarantee to affect, disturb or prejudice the rights of any other such Holders or Holders of Securities of any other series, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. Section 508. Unconditional Right of Holders to Receive Principal and any Premium, Interest and Additional Amounts. Notwithstanding any other provision in this Indenture, the Holder of any Security or Coupon shall have the right, which is absolute and unconditional, to receive payment of the principal of, any premium and (subject to Sections 305 and 307) interest on, and any Additional Amounts with respect to such Security or payment of such Coupon or payment pursuant to the Guarantee endorsed on such Security, as the case may be, on the respective Stated Maturity or Maturities therefor specified in such Security or Coupon (or, in the case of redemption, on the Redemption Date or, in the case of repayment at the option of such Holder if provided in or pursuant to this Indenture, on the date such repayment is due, or in the case of a Change in Control, or as to any Change in Control Purchase Notice given timely, on the Change in Control Purchase Date) 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 Holder of a Security or a Coupon has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or 52 abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Guarantor, the Trustee and each such Holder shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and each such Holder shall continue as though no such proceeding had been instituted. Section 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to each and every Holder of a Security or a Coupon is intended to be exclusive of any other right or remedy, and every right and remedy, to the extent permitted by law, shall 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, to the extent permitted by law, 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 or Coupon 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 any Holder of a Security or a Coupon may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by such Holder, as the case may be. Section 512. Control by Holders of Securities. Subject to Section 601(e), 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 and any Coupons appertaining thereto, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture or with the Securities of any series, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and 53 (3) such direction is not unduly prejudicial to the rights of the other Holders of Securities of such series not joining in such action. Section 513. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series on behalf of the Holders of all the Securities of such series and any Coupons appertaining thereto may waive any past or prospective default hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of, any premium or interest on, or any Additional Amounts with respect to, any Security of such series or any Coupons appertaining thereto, 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 affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 514. Waiver of Stay or Extension Laws. Each of the Company and the Guarantor covenants that (to the extent that it may lawfully do so) 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 Company and the Guarantor expressly waives (to the extent that it may lawfully do so) 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. Section 515. 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 any 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 54 good faith of the claims or defenses made by such party litigant; but the provisions of this Section 515 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on or Additional Amounts, if any, with respect to any Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date, in the case of repayment, on or after the date for repayment and, in the case of Change of Control, on or after the date for payment of the Change of Control Purchase Price). ARTICLE SIX THE TRUSTEE Section 601. Certain Rights of Trustee. Subject to Sections 315(a) through 315(d) of the Trust Indenture Act: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other paper or document reasonably 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 the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or a Company Order or Guarantor Request or Guarantor Order, as the case may be (in each case, other than delivery of any Security, together with any Coupons appertaining thereto, to the Trustee for authentication and delivery pursuant to Section 303 which shall be sufficiently evidenced as provided therein), and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution of the Company or the Guarantor, as the case may be; (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 shall be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a Company's Officers' Certificate or, if such matter pertaining to the Guarantor, a Guarantor's Officers' Certificate; (d) the Trustee may consult with counsel 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; 55 (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Indenture at the request or direction of any of the Holders of Securities of any series or any Coupons appertaining thereto pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (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, coupon 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, during business hours and upon reasonable notice, the books, records and premises of the Company and the Guarantor, personally or by agent or attorney; (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; (h) the Trustee shall not be charged with knowledge of any default (as defined in Section 602) or Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the Corporate Trust Department of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company, the Guarantor or any other obligor on such Securities or by any Holder of such Securities; and (i) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. Section 602. Notice of Defaults. Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series entitled to receive reports pursuant to Section 703(3), 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, if any, on, or Additional Amounts with respect to, any Security 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 56 withholding of such notice is in the best interest of the Holders of Securities and Coupons of such series. For the purpose of this Section, the term "default" 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. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificate of authentication, and in any Coupons shall be taken as the statements of the Company and the Guarantor, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or the Coupons appertaining thereto or the Guarantees, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. Section 604. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other Person that may be an agent of the Trustee, the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with the Company and the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other Person. Section 605. Money Held in Trust. Except as provided in Section 403 and Section 1003, money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law and shall be held uninvested. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company or the Guarantor, as the case may be. Section 606. Compensation and Reimbursement. Each of the Company and the Guarantor, jointly and severally, agrees: 57 (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) 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 the Trustee's negligence or bad faith; and (c) to indemnify the Trustee and its agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities of any series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, and premium or interest on or any Additional Amounts with respect to particular Securities or any Coupons appertaining thereto. Any compensation or expense incurred by the Trustee after a default specified by Section 501 is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. "Trustee" for purposes of this Section 606 shall include any predecessor Trustee but the negligence or bad faith of any Trustee shall not affect the rights of any other Trustee under this Section 606. The Company's obligations under this Section 606 and any lien hereunder shall survive the resignation or removal of any Trustee, the discharge of the Company's obligations pursuant to Article Four of this Indenture and the termination of this Indenture. Section 607. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder that is a Corporation, organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000 subject to supervision or examination by Federal or state authority. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. 58 Section 608. 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 pursuant to Section 609. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 609 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 with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and the Company and the Guarantor. (d) If at any time: (i) the Trustee shall fail to comply with the obligations imposed upon it under Section 310(b) of the Trust Indenture Act with respect to Securities of any series after written request therefor by the Company, the Guarantor or any Holder of a Security of such series who has been a bona fide Holder of a Security of such series for at least six months, or (ii) the Trustee shall cease to be eligible under Section 607 and shall fail to resign after written request therefor by the Company, the Guarantor or any such Holder, or (iii) the Trustee shall become incapable of acting or 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 Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Company, by or pursuant to a Board Resolution, may remove the Trustee with respect to all Securities or the Securities of such series, or (B) subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities of such series and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee 59 or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 609. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 609, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required by Section 609, any Holder of a Security who has been a bona fide Holder of a Security of such series for at least six 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 the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Registered Securities, if any, of such series as their names and addresses appear in the Security Register and, if Securities of such series are issued as Bearer Securities, by publishing notice of such event once in an Authorized Newspaper in each Place of Payment located outside the United States. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. Section 609. Acceptance of Appointment by Successor. (a) Upon the appointment hereunder of any successor Trustee with respect to all Securities, such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, the Guarantor and the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the request of the Company, the Guarantor or such successor Trustee, such retiring Trustee, upon payment of its charges, shall execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and, subject to Section 1003, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its claim, if any, provided for in Section 606. (b) Upon the appointment hereunder of any successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and such successor Trustee shall execute and deliver an indenture supplemental hereto wherein each 60 successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any notice given to, or received by, or any act or failure to act on the part of any other Trustee hereunder, and, upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture with respect to the Securities of that or those series to which the appointment of such successor Trustee relates other than as hereinafter expressly set forth, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor, or such successor Trustee, such retiring Trustee, upon payment of its charges with respect to the Securities of that or those series to which the appointment of such successor relates and subject to Section 1003 shall duly assign, transfer and deliver to such successor Trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, subject to its claim, if any, provided for in Section 606. (c) Upon request of any Person appointed hereunder as a successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be. (d) No Person shall accept its appointment hereunder as a successor Trustee unless at the time of such acceptance such successor Person shall be qualified and eligible under this Article. Section 610. 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, without the 61 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 611. Appointment of Authenticating Agent. The Trustee may appoint one or more Authenticating Agents acceptable to the Company with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of that or those series issued upon original issue, exchange, registration of transfer, partial redemption or partial repayment 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 be acceptable to the Company and the Guarantor and, except as provided in or pursuant to this Indenture, shall at all times be a corporation that would be permitted by the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act, is authorized under applicable law and by its charter to act as an Authenticating Agent and has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it 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 all or substantially all of the corporate agency or corporate trust business of an Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, 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, the Company 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, the Company 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 may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall (i) mail written notice of such appointment by first-class mail, postage prepaid, to 62 all Holders of Registered Securities, if any, of the series with respect to which such Authenticating Agent shall serve, as their names and addresses appear in the Security Register, and (ii) if Securities of the series are issued as Bearer Securities, publish notice of such appointment at least once in an Authorized Newspaper in the place where such successor Authenticating Agent has its principal office if such office is located outside the United States. 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 Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay each Authenticating Agent from time to time reasonable compensation for its services under this Section. If the Trustee makes such payments, it shall be entitled to be reimbursed for such payments, subject to the provisions of Section 606. The provisions of Sections 308, 603 and 604 shall be applicable to each Authenticating Agent. If an Authenticating Agent is appointed with respect to one or more series of Securities pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to or in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, As Trustee By As Authenticating Agent By Authorized Officer If all of the Securities of any series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested in writing (which writing need not be accompanied by or contained in an Officers' Certificate by the Company), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities. 63 ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR Section 701. Company and Guarantor to Furnish Trustee Names and Addresses of Holders. In accordance with Section 312(a) of the Trust Indenture Act, the Company and the Guarantor shall furnish or cause to be furnished to the Trustee (a) semi-annually with respect to Securities of each series not later than March 15 and September 15 of the year or upon such other dates as are set forth in or pursuant to the Board Resolution, Officers' Certificate or indenture supplemental hereto authorizing such series, a list, in each case in such form as the Trustee may reasonably require, of the names and addresses of Holders as of the applicable date, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company 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, provided, however, that so long as the Trustee is the Security Registrar no such list shall be required to be furnished. Section 702. Preservation of Information; Communications to Holders. The Trustee shall comply with the obligations imposed upon it pursuant to Section 312 of the Trust Indenture Act. Every Holder of Securities or Coupons, by receiving and holding the same, agrees with the Trustee, the Guarantor and the Company that none of the Company, the Trustee, the Guarantor, any agent of any of them or any Security Registrar 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 312(c) of the Trust Indenture Act, 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 312(b) of the Trust Indenture Act. Section 703. Reports by Trustee. (a) Within 60 days after September 15 of each year commencing with the first September 15 following the first issuance of Securities pursuant to Section 301, if required by Section 313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report dated as of such September 15 with respect to any of the events specified 64 in said Section 313(a) which may have occurred since the later of the immediately preceding September 15 and the date of this Indenture. (b) The Trustee shall transmit the reports required by Section 313(a) of the Trust Indenture Act at the times specified therein. (c) Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture Act. Section 704. Reports by Company and Guarantor. The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall: (a) file with the Trustee, within 15 days after the Company and the Guarantor are 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 the Company or 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 the Company or the Guarantor is not required to file information, documents or reports pursuant to either of said Sections, then they shall 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; (b) 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 the Company 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 (c) transmit within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company and the Guarantor pursuant to paragraphs (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. 65 ARTICLE EIGHT CONSOLIDATION, MERGER AND SALES Section 801. Guarantor May Consolidate, Etc., Only on Certain Terms. Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Guarantor with or into any other Person or Persons (whether or not affiliated with the Guarantor), or successive consolidations or mergers in which the Guarantor or their successor or successors shall be a party or parties, or shall prevent any conveyance, transfer or lease of the property of the Guarantor as an entirety or substantially as an entirety, to any other Person (whether or not affiliated with the Guarantor); provided, however, that: (a) in case the Guarantor shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person, the entity formed by such consolidation or into which the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor as an entirety or substantially as an entirety shall be a Corporation organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there is more than one Trustee) supplemental hereto, executed by the successor Person and delivered to the Trustee, in form satisfactory to the Trustee, the performance of every obligation of the Guarantor in this Indenture and the Guarantees on the part of the Guarantor to be performed or observed; (b) immediately after giving effect to such transaction, 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, including any default pursuant to the Holder's Change of Control Purchase Option set forth in Article Fifteen; and (c) either the Guarantor or the successor Person shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 802. Company May Consolidate, etc., Only on Certain Terms. (a) The Company shall not consolidate with or merge into any other Person, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person, unless: 66 (1) any Person formed by such consolidation or into which the Company is merged or to whom the Company has conveyed, transferred or leased its properties and assets as an entirety or substantially as an entirety (a "Successor") is a Person organized and validly existing under the laws of the jurisdiction of organization of such Person, and expressly assumes 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 any premium and interest on and any Additional Amounts with respect to all the Securities of the Company and the performance or observance 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 occurred and be continuing; (3) any such Person shall expressly agree, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, (i) to immediately indemnify (pursuant to the indemnification procedure described in Section 805) the Holder of each Security against (A) any tax, assessment or governmental charge imposed on such Holder or required to be withheld or deducted from any payment to such Holder (including any governmental charge or withholding attributable to such Person's indemnifying such Holder) as a consequence of such consolidation, merger, conveyance, transfer or lease, and (B) any other tax costs or other tax expenses of the act of such consolidation, merger, conveyance, transfer or lease (except that if the Company or any such Person delivers by the date of any such transaction an opinion of an independent counsel or a tax consultant of recognized standing that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such transaction, a Holder will have such rights to indemnification only if and when gain for U.S. federal income tax purposes is actually recognized by such Holders) and (ii) that all payments pursuant to the Securities in respect of the principal of and any premium and interest on such Securities, as the case may be, shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the jurisdiction of organization of such Person or any political subdivision or taxing authority thereof or therein, unless such taxes, duties, assessments or governmental charges are required by such jurisdiction or any such subdivision or authority to be withheld or deducted, in which case such Person will pay by way of additional interest such additional amounts of or in respect of, principal and any premium and interest ("Successor Additional Amounts") as will result (after deduction of such taxes, duties, assessments or governmental charges and any additional taxes, duties, assessments or governmental charges payable in respect of such) in the payment to each Holder of a Security of the amounts which would have been payable pursuant to the Securities had no such withholding or deduction been required, except that no Successor Additional Amounts shall be so payable for or on account of: (A) any tax, duty, levy, assessment or other governmental charge which would not have been imposed but for the fact that such Holder: (i) was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the jurisdiction of organization of such Successor or any of its territories or any political subdivision 67 thereof or otherwise had some connection with such jurisdiction other than the mere ownership of, or receipt of payment under, such Security; (ii) presented (if presentation is required) such Security for payment in such jurisdiction or any of its territories or any political subdivision thereof, unless such Security could not have been presented for payment elsewhere; or (iii) presented (if presentation is required) such Security more than thirty (30) days after the date on which the payment in respect of such Security first became due and payable or provided for, whichever is later, except to the extent that the Holder would have been entitled to such Successor Additional Amounts if it had presented such Security for payment on any day within such period of thirty (30) days; (B) any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge; (C) any tax, assessment or other governmental charge which is payable otherwise than by withholding or deduction from payments of (or in respect of) principal of or any premium or interest on, such Securities; (D) any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of the Security with a request of the Company or the Successor addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition or exemption from all or part of such tax, assessment or other governmental charge; or (E) any combination of items (A), (B), (C) and (D); nor shall Successor Additional Amounts be paid with respect to any payment of the principal of or any premium or interest on any such Security to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the jurisdiction of organization of such Person (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Successor Additional Amounts had it been the Holder of the Security; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. 68 (b) The Company may assign its obligations under any series of Securities to any other Subsidiary (the "Subsidiary Assignee") and such Subsidiary Assignee shall be treated as the Successor to the Company with respect to such series of Securities, provided that the conditions set forth in Section 802(a) that would apply to the merger of the Company into such Subsidiary Assignee are satisfied. Section 803. Successor Person Substituted for Company or Guarantor. Upon any consolidation by the Company or the Guarantor with or merger of the Company or the Guarantor into any other Person or any conveyance, transfer or lease of the properties and assets of the Company or the Guarantor, as the case may be, as an entirety or substantially as an entirety to any Person in accordance with Sections 801 or 802, the successor Person formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as the case may be, herein; and thereafter, except in the case of a lease, the predecessor Person shall be released from all obligations and covenants under this Indenture, the Securities, the Guarantees and the Coupons. Section 804. Assumption by the Guarantor of the Company's Obligations. (a) The Guarantor may, at its option, assume the obligations of the Company as obligor under any series of Securities and this Indenture; provided that: (i) the Guarantor expressly assumes in an assumption agreement or supplemental indenture hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on such Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed (including any obligation to pay any Additional Amounts); (ii) immediately after giving effect to such assumption, no Event of Default and no event, which after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (iii) the Guarantor shall expressly agree in an assumption agreement or supplemental indenture hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, to immediately indemnify (pursuant to the indemnification procedure described in Section 805) the Holder of each Security against (i) any tax, assessment or governmental charge imposed on such Holder or required to be withheld or deducted from any payment to such Holder (including any governmental charge or withholding tax attributable to the Guarantor indemnifying such Holder) as a consequence of such assumption and (ii) any costs or expenses of such assumption (except that if the 69 Guarantor delivers to the Trustee an opinion of an independent counsel or a tax consultant of recognized standing that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such assumption by the date of such assumption, a Holder will have indemnification rights pursuant to the indemnification procedure described in Section 805 only if and when gain for U.S. federal income tax purposes is actually recognized by such Holder); and (iv) the Guarantor shall have delivered to the Trustee an Officers' Certificate stating that such assumption and such assumption agreement comply with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with. (b) Upon any assumption pursuant to Section 804(a), the Guarantor shall succeed to, and be substituted for, and may exercise every right and power of, the Company under such Securities and this Indenture with the same effect as if the Guarantor had been named as the Company herein, and the Company shall be released from its liability as obligor upon the Securities and any Coupons and under this Indenture. Section 805. Indemnification Procedure (a) If a transaction described above under Sections 801, 802 or 804 (an "Indemnifiable Transaction") should constitute a taxable event for U.S. federal income tax purposes, the Guarantor or any other Person that assumes the obligations of the Guarantor or the Company pursuant to such Sections, as the case may be, shall indemnify a Holder of a Security against any tax, assessment or governmental charge imposed on such Holder or required to be withheld or deducted from any payment to such Holder (including any governmental charge or withholding attributable to an indemnification payment made by or on behalf of the Guarantor or any such Person) and any other tax costs or other tax expenses attributable to such Indemnifiable Transaction, and the Guarantor or any such Person, as the case may be, shall comply with the following indemnification procedures: (1) Unless the Guarantor or any such Person, as the case may be, delivers to the Trustee by the date of an Indemnifiable Transaction an opinion of an independent counsel or a tax consultant of recognized standing to the effect that such Indemnifiable Transaction will not be a taxable event for U.S. federal income tax purposes, the Guarantor or any such Person, as the case may be, shall send to each Holder on or prior to the date of such Indemnifiable Transaction (i) notification explaining the U.S. federal income tax consequences to each such Holder of such Indemnifiable Transaction and (ii) an indemnification claim form requesting (A) information concerning each such Holder's tax basis and holding period in a Security and (B) a statement that the Holder is not then an entity described in Section 501 of the Code that is exempt from U.S. federal income tax and (iii) a statement setting forth the address to which each such Holder must remit such form. (2) If the Guarantor or any such Person delivers such an opinion, each Holder will have indemnification rights pursuant to this Section 805 only if and when gain for U.S. federal income tax purposes is actually recognized by such Holder. 70 (3) When the Guarantor or any such Person, as the case may be, receives from a Holder an indemnification claim form, the Guarantor or such Person, as the case may be, shall within 15 Business Days remit to such Holder a certified check in an amount equal to the product of any gain recognized as a result of the Indemnifiable Transaction and the highest marginal U.S. income tax rate in effect at the time of such Indemnifiable Transaction (the "Indemnification Amount"). For these purposes, a Holder's gain shall equal the amount by which the fair market value of a Security at the time of such Indemnifiable Transaction exceeds such Holder's adjusted tax basis in such Security. ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures without Consent of Holders. Without the consent of any Holders of Securities or Coupons, the Company (when authorized by or pursuant to a Board Resolution), the Guarantor (when authorized by or pursuant to a 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: (a) to evidence the succession of another Person to the Company or the Guarantor, and the assumption by any such successor of the covenants of the Company or the Guarantor, as the case may be, contained herein and in the Securities or the Guarantees; or (b) to add to the covenants of the Company or the Guarantor for the benefit of the Holders of all or any series of Securities (as shall be specified in such supplemental indenture or indentures) or to surrender any right or power herein conferred upon the Company or the Guarantor; or (c) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal of, any premium or interest on or any Additional Amounts with respect to Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, to permit Bearer Securities to be exchanged for Bearer Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form, provided any such action shall not adversely affect the interests of the Holders of Securities of any series or any Coupons appertaining thereto in any material respect; or (d) to establish the form or terms of Securities of any series and any Coupons appertaining thereto as permitted by Sections 201 and 301 or of the related Guarantees as permitted by Section 202; or (e) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of 71 the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 609; or (f) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not adversely affect the interests of the Holders of Securities of any series then Outstanding or any Coupons appertaining thereto in any material respect; or (g) to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Securities, as herein set forth; or (h) to add any additional Events of Default with respect to all or any series of Securities (as shall be specified in such supplemental indenture); or (i) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Article Four, provided that any such action shall not adversely affect the interests of any Holder of a Security of such series and any Coupons appertaining thereto or any other Security or Coupon in any material respect; or (j) to secure the Securities or the Guarantees pursuant to Section 1005, 1006 or otherwise; or (k) to make provisions with respect to conversion or exchange rights of Holders of Securities of any series; or (l) to amend or supplement any provision contained herein or in any supplemental indenture, provided that no such amendment or supplement shall materially adversely affect the interests of the Holders of any Securities then Outstanding. Section 902. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than 66-2/3% in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company (when authorized by or pursuant to a Board Resolution), the Guarantor (when authorized by or pursuant to 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 Securities of such series under this Indenture or of the Securities of such series; provided, however, that no such supplemental indenture, without the consent of the Holder of each Outstanding Security affected thereby, shall 72 (a) change the Stated Maturity of the principal of, or any premium or installment of interest on or any Additional Amounts with respect to, any Security, or reduce the principal amount thereof or the rate (or modify the calculation of such rate) of interest thereon or any Additional Amounts with respect thereto, or any premium payable upon the redemption thereof or otherwise, or change the obligation of the Company to pay Additional Amounts pursuant to Section 1004 (except as contemplated by Section 801(a) and permitted by Section 901(a)), or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502 or the amount thereof provable in bankruptcy pursuant to Section 504, change the redemption provisions or adversely affect the right of repayment at the option of any Holder as contemplated by Article Twelve, or change the Place of Payment, Currency in which the principal of, any premium or interest on, or any Additional Amounts with respect to any Security is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date or, in the case of repayment at the option of the Holder, on or after the date for repayment or in the case of change in control, after the Change in Control Purchase Date), or (b) 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 reduce the requirements of Section 1404 for quorum or voting, or (c) modify or effect in any manner adverse to the Holders the terms and conditions of the obligations of the Company under the Securities or the Coupons, or the Guarantor under the Guarantees, or either of them hereunder, in respect of the due and punctual payments of principal of, any premium or interest on, or any Additional Amounts with respect to, the Securities, or (d) 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 shall have been included expressly and 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 Holders of Securities 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. 73 Section 903. Execution of Supplemental Indentures. As a condition to executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trust created by this Indenture, the Trustee shall be entitled to receive (in addition to those documents required by Section 102), and (subject to Section 315 of the Trust Indenture Act) 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 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 a Security theretofore or thereafter authenticated and delivered hereunder and of any Coupon appertaining thereto shall be bound thereby. Section 905. Reference in Securities to Supplemental Indentures. Securities of any series 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 Company and the Guarantor shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared with Guarantees endorsed thereon, if appropriate, and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Section 906. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. 74 ARTICLE TEN COVENANTS Section 1001. Payment of Principal, any Premium, Interest and Additional Amounts. The Company covenants and agrees for the benefit of the Holders of the Securities of each series that it will duly and punctually pay the principal of, any premium and interest on and any Additional Amounts with respect to the Securities of such series in accordance with the terms thereof, any Coupons appertaining thereto and this Indenture. Any interest due on any Bearer Security on or before the Maturity thereof, and any Additional Amounts payable with respect to such interest, shall be payable only upon presentation and surrender of the Coupons appertaining thereto for such interest as they severally mature. Section 1002. Maintenance of Office or Agency. The Company and the Guarantor shall maintain in each Place of Payment for any series of Securities an Office or Agency where Securities of such series, and Guarantees with respect thereto (but not Bearer Securities, except as otherwise provided below, unless such Place of Payment is located outside the United States), may be presented or surrendered for payment, where Securities of such series may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Company and the Guarantor in respect of the Securities of such series relating thereto and this Indenture may be served. If Securities of a series are issuable as Bearer Securities, the Company and the Guarantor shall maintain, subject to any laws or regulations applicable thereto, an Office or Agency in a Place of Payment for such series which is located outside the United States where Securities of such series and any Coupons appertaining thereto, and Guarantees with respect thereto, may be presented and surrendered for payment; provided, however, that if the Securities of such series are listed on The Stock Exchange of the United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company and the Guarantor shall maintain a Paying Agent in London, Luxembourg or any other required city located outside the United States, as the case may be, so long as the Securities of such series are listed on such exchange. The Company and 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 Company and the Guarantor shall fail to maintain any such required Office or Agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, except that Bearer Securities of such series and any Coupons appertaining thereto, and Guarantees with respect thereto, may be presented and surrendered for payment at the place specified for the purpose with respect to such Securities as provided in or pursuant to this Indenture, and the Company and the Guarantor hereby appoint the Trustee as their agent to receive all such presentations, surrenders, notices and demands. 75 Except as otherwise provided in or pursuant to this Indenture, no payment of principal, premium, interest or Additional Amounts with respect to Bearer Securities shall be made at any Office or Agency in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, if amounts owing with respect to any Bearer Securities shall be payable in Dollars, payment of principal of, any premium or interest on and any Additional Amounts with respect to any such Security, or the Guarantees with respect thereto, may be made at the Corporate Trust Office of the Trustee or any Office or Agency designated by the Company in the Borough of Manhattan, The City of New York, if (but only if) payment of the full amount of such principal, premium, interest or Additional Amounts at all offices outside the United States maintained for such purpose by the Company and the Guarantor in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions. The Company and the Guarantor may also from time to time designate one or more other Offices or Agencies where the Securities of one or more series, and the Guarantees endorsed thereon, may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company or the Guarantor of its obligation to maintain an Office or Agency in each Place of Payment for Securities of any series for such purposes. The Company and the Guarantor shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other Office or Agency. Unless otherwise provided in or pursuant to this Indenture, the Company and the Guarantor hereby designate as the Place of Payment for each series of Securities and the Guarantees endorsed thereon, the Borough of Manhattan, The City of New York, and initially appoints the Corporate Trust Office of the Trustee as the Company's or the Guarantor's Office or Agency in the Borough of Manhattan, The City of New York for such purpose. The Company and the Guarantor may subsequently appoint a different Office or Agency in the Borough of Manhattan, The City of New York for the Securities of any series, and the Guarantees endorsed thereon. Unless otherwise specified with respect to any Securities pursuant to Section 301, if and so long as the Securities of any series (i) are denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long as it is required under any other provision of this Indenture, then the Company and the Guarantor will maintain with respect to each such series of Securities, or as so required, at least one exchange rate agent. Section 1003. Money for Securities Payments to Be Held in Trust. If the Company or the Guarantor, as the case may be, shall at any time act as its own Paying Agent with respect to any series of Securities, it shall, on or before each due date of the principal of, any premium or interest on or Additional Amounts with respect to any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in the Currency or Currencies in which the Securities of such series are payable (except as otherwise specified pursuant to Section 301 for the Securities of such series) sufficient to pay the principal or any 76 premium, interest or Additional Amounts so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company or the Guarantor, as the case may be, shall have one or more Paying Agents for any series of Securities, it shall, on or prior to each due date of the principal of, any premium or interest on or any Additional Amounts with respect to any Securities of such series, deposit with any Paying Agent a sum (in the Currency or Currencies described in the preceding paragraph) sufficient to pay the principal or any premium, interest or Additional Amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless such Paying Agent is the Trustee) the Company or the Guarantor, as the case may be, will promptly notify the Trustee of its action or failure so to act. The Company shall cause each Paying Agent for any series of Securities other than the Trustee 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 shall: (a) hold all sums held by it for the payment of the principal of, any premium or interest on or any Additional Amounts with respect to 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 provided in or pursuant to this Indenture; (b) give the Trustee notice of any default by the Company or the Guarantor (or any other obligor upon the Securities of such series) in the making of any payment of principal, any premium or interest on or any Additional Amounts with respect to the Securities of such series; and (c) 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. The Company or the Guarantor, as the case may be, may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order of the Company or the Guarantor direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company, the Guarantor or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Company, the Guarantor 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 sums. Except as otherwise provided herein or pursuant hereto, any money deposited with the Trustee or any Paying Agent, or then held by the Company or the Guarantor, as the case may be, in trust for the payment of the principal of, any premium or interest on or any Additional Amounts with respect to any Security of any series or any Coupon appertaining thereto and remaining unclaimed for two years after such principal or any such premium or interest or any such Additional Amounts shall have become due and payable shall be paid to the Company or the Guarantor, as the case may be, on Company Request, or (if then held by the Company or the Guarantor) shall be discharged from such 77 trust; and the Holder of such Security or any Coupon appertaining thereto, or Guarantees endorsed thereon, shall thereafter, as an unsecured general creditor, look only to the Company or the Guarantor (pursuant to the Guarantees) for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company or the Guarantor (pursuant to Guarantee) as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment for such series or to be mailed to Holders of Registered Securities of such series, or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing nor shall it be later than two years after such principal and any premium or interest or Additional Amounts shall have become due and payable, any unclaimed balance of such money then remaining will be repaid to the Company or the Guarantor, as the case may be. Section 1004. Additional Amounts. If any Securities of a series provide for the payment of Additional Amounts, the Company and the Guarantor each agrees to pay to the Holder of any such Security or any Coupon appertaining thereto Additional Amounts as provided in or pursuant to this Indenture or such Securities. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or any Coupon or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided by the terms of such series established hereby or pursuant hereto to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of Additional Amounts (if applicable) in any provision hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. Except as otherwise provided in or pursuant to this Indenture or the Securities of the applicable series, if the Securities of a series provide for the payment of Additional Amounts, at least 10 days prior to the first Interest Payment Date with respect to such series of Securities (or if the Securities of such series shall not bear interest prior to Maturity, the first day on which a payment of principal is made), and at least 10 days prior to each date of payment of principal or interest if there has been any change with respect to the matters set forth in the below mentioned Officers' Certificate, the Company or the Guarantor, as the case may be, shall furnish to the Trustee and the principal Paying Agent or Paying Agents, if other than the Trustee, an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and premium, if any, or interest on the Securities of such series shall be made to Holders of Securities of such series or the Coupons appertaining thereto who are United States Aliens or non-residents of Canada without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of such series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or Coupons, and the Company agrees to pay to the Trustee or such Paying Agent the Additional Amounts required by the terms of such Securities. Each of the Company and the 78 Guarantor, jointly and severally, covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section. Section 1005. Limitation on Liens. Nothing in this Indenture or in the Securities shall in any way restrict or prevent the Company, the Guarantor or any other Subsidiary from issuing, assuming, guaranteeing or otherwise incurring any indebtedness; provided, however, that neither the Company, the Guarantor nor any other Subsidiary shall issue, assume or guaranty any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed secured by any Lien on any asset now owned or hereafter acquired by it without making effective provision whereby any and all Securities then or thereafter outstanding shall be secured by a Lien equally and ratably with any and all other obligations thereby secured, so long as any such obligations shall be so secured. Notwithstanding the foregoing, the Company, the Guarantor or any other Subsidiary, without so securing the Securities, may issue, assume or guaranty indebtedness secured by the following Liens: (a) Liens existing on the date of this Indenture or provided for under the terms of agreements existing on the date hereof; (b) Liens on property to secure (i) all or any portion of the cost of exploration, production, gathering, processing, marketing, drilling or development of such property, (ii) all or any portion of the cost of acquiring, constructing, altering, improving or repairing any property or assets, real or personal, or improvements used in connection with such property, and (iii) indebtedness incurred by the Guarantor, the Company or any other Subsidiary to provide funds for the activities set forth in clauses (i) and (ii) above; (c) Liens which secure indebtedness owing by a Subsidiary to the Guarantor or to one or more other Subsidiaries, or to the Guarantor and one or more other Subsidiaries; (d) Liens on the property of any Person existing at the time such Person becomes a Subsidiary; (e) Liens on any property securing (i) indebtedness incurred in connection with the construction, installation or financing of pollution control or abatement facilities or other forms of industrial revenue bond financing, (ii) indebtedness issued or guaranteed by the United States, any state or any department, agency or instrumentality of either or (iii) indebtedness issued or guaranteed by (Y) a foreign government, any state or any department, agency or instrumentality of either or (Z) an international finance agency or any division or department thereof, including the World Bank, the International Finance Corp. and the Multilateral Investment Guarantee Agency; 79 (f) any Lien extending, renewing or replacing (or successive extensions, renewals or replacements of) any Lien of the type set forth in paragraphs (a) through (e) above, which Lien exists on the date of this Indenture; (g) any Ordinary Course Lien (as defined below) arising, and only so long as continuing, in the ordinary course of the business of the Guarantor; or (h) Liens which secure Limited Recourse Indebtedness. Notwithstanding the foregoing, the Guarantor and any one or more other Subsidiaries may issue, assume or guaranty the following indebtedness secured by Liens on assets without regard to the foregoing limitations: indebtedness in any aggregate principal amount which, together with the aggregate outstanding principal amount of all other indebtedness of the Company, the Guarantor and its other Subsidiaries so secured (excluding indebtedness secured by the permitted Liens described above), and the aggregate amount of Sale/Leaseback Transaction obligations which would otherwise be subject to the provisions of Section 1006, does not at the time such indebtedness is incurred exceed 10% of the Guarantor's Consolidated Net Worth as shown on the most recent audited consolidated balance sheet of the Guarantor and its Subsidiaries. Notwithstanding the foregoing, nothing in this Section 1005 shall be deemed to prohibit or otherwise limit the following types of transactions: (1)(i) the sale, granting of Liens with respect to or other transfer of crude oil, natural gas or other petroleum hydrocarbons in place, for a period of time until, or in an amount such that, the transferee will realize therefrom a specified amount (however determined) of money or such crude oil, natural gas or other petroleum hydrocarbons, or (ii) the sale or other transfer of any other interest in property of the character commonly referred to as a production payment, overriding royalty, forward sales or similar interest; and (2) the granting of Liens required by any contract or statute in order to permit the Guarantor or a Subsidiary to perform any contract or subcontract made by it with or at the request of the United States government or any foreign government or international finance agency, any state or any department thereof, or any agency or instrumentality thereof, or to secure partial, progress, advance or other payments to the Guarantor or any other Subsidiary by any such entity pursuant to the provisions of any contract or statute. "Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, security interest or encumbrances of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law. The Company, the Guarantor or any other Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. The right of set-off, whether by operation of law or by contract, does not constitute a Lien unless there is a related obligation to maintain a deposit of cash or other assets in respect of which such right of set-off may be exercised. 80 "Ordinary Course Lien" shall mean: (a) Liens for taxes, assessments or governmental changes or levies on the property of the Company, the Guarantor or any other Subsidiary if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with generally accepted accounting principles shall have been set aside on the books of the Company or the Guarantor; (b) Liens imposed by law, such as carriers', warehousemen's, landlords' and mechanics' liens and other similar liens arising in the ordinary course of business which secure obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with generally accepted accounting principles shall have been set aside on the books of the Company or the Guarantor; (c) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation; (d) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Company, the Guarantor or its other Subsidiaries, as the case may be; (e) Liens arising under operating agreements or similar agreements in respect of obligations which are not yet due or which are being contested in good faith by appropriate proceedings; (f) Liens reserved in oil, gas and/or mineral leases for bonus or rental payments and for compliance with the terms of such leases; (g) Liens pursuant to partnership agreements, oil, gas and/or mineral leases, farm-out-agreements, division orders, contracts for the sale, purchase, exchange, or processing of oil, gas and/or other hydrocarbons, unitization and pooling declarations and agreements, operating agreements, development agreements, area of mutual interest agreements, forward sale agreements, oil and gas delivery obligations, and other agreements which are customary in the oil, gas and other mineral exploration, development and production business and in the business of processing of gas and gas condensate production of the extraction of products therefrom; 81 (h) Liens on personal property (excluding the capital stock or indebtedness of any Subsidiary) securing indebtedness maturing not more than one year from the date of its creation; and (i) Liens relating to a judgment or other court-ordered award or settlement as to which the Guarantor or the Company has not exhausted its appellate rights. "Consolidated Net Worth" means the consolidated stockholders' equity of the Guarantor, determined in accordance with generally accepted accounting principles. Section 1006. Limitation on Sale/Leaseback Transactions. None of the Company, the Guarantor or any other Subsidiary will enter into any Sale/Leaseback Transaction with any Person (other than the Guarantor or a Subsidiary) providing for a term of more than three years unless: (a) the Company, the Guarantor or such other Subsidiary would be permitted, pursuant to the terms of Section 1005, to incur indebtedness in an aggregate principal amount equal to or exceeding the value of the Sale/Leaseback Transaction secured by a Lien on the property subject to such Sale/Leaseback Transaction; (b) since the date of this Indenture and within a period commencing six months prior to the Sale/Leaseback Transaction and ending six months after the consummation thereof, the Company, the Guarantor or such other Subsidiary expends for any property (including amounts expended for the acquisition, exploration, drilling or development thereof, or for additions, alterations, improvements or repairs thereto) an amount up to the net proceeds of such Sale/Leaseback Transaction, and the Company or the Guarantor, as the case may be, elects to designate such amount as a credit against such Sale/Leaseback Transaction (with any amount of such net proceeds not being so designated to be applied as set forth in paragraph (c) below); or (c) the Company or Guarantor, as the case may be, during or immediately after the expiration of the 12 month period following the consummation of the Sale/Leaseback Transaction, applies to the voluntary retirement, redemption or defeasance of the Securities and its other Senior Indebtedness an amount equal to the greater of (i) the net proceeds of the Sale/Leaseback Transaction and (ii) the fair value, in the opinion of the Board of Directors of the Company or the Guarantor, as the case may be, of the subject property of the Sale/Leaseback Transaction at the time of such transaction (adjusted, in either case, to reflect the remaining term of the lease and any amount applied pursuant to paragraph (b) above), less an amount equal to the principal amount of other Senior Indebtedness voluntarily retired by the Company or the Guarantor, as the case may be, during such 12-month period. 82 "Sale/Leaseback Transaction" means any arrangement providing for the leasing to the Company, the Guarantor or any other Subsidiary by any Person (other than the Guarantor, the Company or any other Subsidiary) of any property which has been, or is to be, sold or transferred by the Guarantor, the Company or such other Subsidiary to such Person or to any Person (other than the Company or any other Subsidiary) to which funds have been or are to be advanced by such Person on the security of the leased property, except with respect to any lease that secures or relates to obligations issued by or on behalf of (a) the United States, any state or any department, agency or instrumentality of either, (b) a foreign government, any state or any department agency or instrumentality of either, or (c) an international finance agency or any division or department thereof, including the World Bank, the International Finance Corp. and the Multilateral Investment Guarantee Agency, in connection with the financing of the cost of construction, improvement or equipping of such property. Section 1007. Corporate Existence. Subject to Articles Eight and Fifteen, each of the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and that of each other Subsidiary and their respective rights (charter and statutory) and franchises; provided, however, that the foregoing shall not obligate the Company, the Guarantor or any other Subsidiary to preserve any such right or franchise if the Company, the Guarantor or any other Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of its business or the business of such other Subsidiary. Section 1008. Waiver of Certain Covenants. The Company or the Guarantor, as the case may be, may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1005, 1006 or 1007 with respect to the Securities of any series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series, by Act of such Holders, either shall waive such compliance in such instance or generally shall have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 1009. Company Statement as to Compliance; Notice of Certain Defaults. (a) Each of the Company and the Guarantor shall deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement (which need not be contained in or accompanied by an Officers' Certificate) signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company and the Guarantor, respectively, stating that 83 (1) a review of the activities of the Company or the Guarantor, as the case may be, during such year and of its performance under this Indenture has been made under his or her supervision, and (2) to the best of his or her knowledge, based on such review, (i) the Company or the Guarantor, as the case may be, has complied with all the conditions and covenants imposed on it under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such condition or covenant, specifying each such default known to him or her and the nature and status thereof, and (ii) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default, or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. (b) Each of the Company and the Guarantor shall deliver to the Trustee, within five days after the occurrence thereof, written notice of any Event of Default or any event which after notice or lapse of time or both would become an Event of Default. ARTICLE ELEVEN REDEMPTION OF SECURITIES Section 1101. Applicability of Article. Redemption of Securities of any series at the option of the Company as permitted or required by the terms of such Securities shall be made in accordance with the terms of such Securities and (except as otherwise provided herein or pursuant hereto) this Article. Section 1102. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution or an Officers' Certificate. In case of any redemption at the election of the Company of (a) less than all of the Securities of any series or (b) all of the Securities of any series, with the same issue date, interest rate or formula, Stated Maturity and other terms, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (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. 84 Section 1103. Selection by Trustee of Securities to be Redeemed. If less than all of the Securities of any series with the same issue date, interest rate or formula, Stated Maturity and other terms are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date 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 provide for the selection for redemption of portions of the principal amount of Registered Securities of such series; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Registered Security of such series not redeemed to less than the minimum denomination for a Security of such series established herein or pursuant hereto. The Trustee shall promptly notify the Company and the Security Registrar (if other than itself) in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. 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 Securities redeemed or to be redeemed only in part, to the portion of the principal of such Securities which has been or is to be redeemed. Section 1104. Notice of Redemption. Notice of redemption shall be given in the manner provided in Section 106, not less than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to the Holders of Securities to be redeemed. Failure to give notice by mailing in the manner herein provided to the Holder of any Registered Securities designated for redemption as a whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Securities or portion thereof. Any notice that is mailed to the Holder of any Registered Securities in the manner herein provided shall be conclusively presumed to have been duly given, whether or not such Holder receives the notice. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if less than all Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amount) of the particular Security or Securities to be redeemed, 85 (d) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed, (e) that, on the Redemption Date, the Redemption Price shall become due and payable upon each such Security or portion thereof to be redeemed, and, if applicable, that interest thereon shall cease to accrue on and after said date, (f) the place or places where such Securities, together (in the case of Bearer Securities) with all Coupons appertaining thereto, if any, maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price and any accrued interest and Additional Amounts pertaining thereto, (g) that, unless otherwise specified in such notice, Bearer Securities of any series, if any, surrendered for redemption must be accompanied by all Coupons maturing subsequent to the date fixed for redemption or the amount of any such missing Coupon or Coupons will be deducted from the Redemption Price, unless security or indemnity satisfactory to the Company, the Trustee and any Paying Agent is furnished, (h) if Bearer Securities of any series are to be redeemed and any Registered Securities of such series are not to be redeemed, and if such Bearer Securities may be exchanged for Registered Securities not subject to redemption on the Redemption Date pursuant to Section 305 or otherwise, the last date, as determined by the Company, on which such exchanges may be made, (i) the CUSIP number or the Euroclear or the Cedel reference numbers of such Securities, if any (or any other numbers used by a Depository to identify such Securities). A notice of redemption mailed as contemplated by Section 106 need not identify particular Registered Securities to be redeemed. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 1105. Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit, with respect to the Securities of any series called for redemption pursuant to Section 1104, with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money in the applicable Currency sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date, unless 86 otherwise specified pursuant to Section 301 or in the Securities of such series) any accrued interest on and Additional Amounts with respect thereto, all such Securities or portions thereof 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 Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest and the Coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of any such Security for redemption in accordance with said notice, together with all Coupons, if any, appertaining thereto maturing after the Redemption Date, such Security shall be paid by the Company at the Redemption Price, together with any accrued interest and Additional Amounts to the Redemption Date; provided, however, that, except as otherwise provided in or pursuant to this Indenture or the Bearer Securities of such series, installments of interest on Bearer Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable only upon presentation and surrender of Coupons for such interest (at an Office or Agency located outside the United States except as otherwise provided in Section 1002), and provided, further, that, except as otherwise specified in or pursuant to this Indenture or the Registered Securities of such series, installments of interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the Regular Record Dates therefor according to their terms and the provisions of Section 307. If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant Coupons maturing after the Redemption Date, such Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any such missing Coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that any interest or Additional Amounts represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an Office or Agency for such Security located outside of the United States except as otherwise provided in Section 1002. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium, until paid, shall bear interest from the Redemption Date at the rate prescribed therefor in the Security. 87 Section 1107. Securities Redeemed in Part. Any Registered Security which is to be redeemed only in part shall be surrendered at any Office or Agency for such Security (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute, the Guarantees of the Guarantor shall be endorsed on and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Registered Security or Securities of the same series, containing identical terms and provisions, 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. If a Security in global form is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the U.S. Depository or other Depository for such Security in global form as shall be specified in the Company Order with respect thereto to the Trustee, without service charge, a new Security in global form in a denomination equal to and in exchange for the unredeemed portion of the principal of the Security in global form so surrendered. ARTICLE TWELVE REPAYMENT AT THE OPTION OF HOLDERS Section 1201. Applicability of Article. Securities of any series which are repayable at the option of the Holders thereof before their Stated Maturity shall be repaid in accordance with the terms of the Securities of such series. The repayment of any principal amount of Securities pursuant to such option of the Holder to require repayment of Securities before their Stated Maturity, for purposes of Section 309, shall not operate as a payment, redemption or satisfaction of the Indebtedness represented by such Securities unless and until the Company, at its option, shall deliver or surrender the same to the Trustee with a directive that such Securities be canceled. Notwithstanding anything to the contrary contained in this Section 1201, in connection with any repayment of Securities, the Company may arrange for the purchase of any Securities by an agreement with one or more investment bankers or other purchasers to purchase such Securities by paying to the Holders of such Securities on or before the close of business on the repayment date an amount not less than the repayment price payable by the Company on repayment of such Securities, and the obligation of the Company to pay the repayment price of such Securities shall be satisfied and discharged to the extent such payment is so paid by such purchasers. 88 ARTICLE THIRTEEN SECURITIES IN FOREIGN CURRENCIES Section 1301. Applicability of Article. Whenever this Indenture provides for (i) any action by, or the determination of any of the rights of, Holders of Securities of any series in which not all of such Securities are denominated in the same Currency, or (ii) any distribution to Holders of Securities, in the absence of any provision to the contrary in the form of Security of any particular series or pursuant to this Indenture or the Securities, any amount in respect of any Security denominated in a Currency other than Dollars shall be treated for any such action or distribution as that amount of Dollars that could be obtained for such amount on such reasonable basis of exchange and as of the record date with respect to Registered Securities of such series (if any) for such action, determination of rights or distribution (or, if there shall be no applicable record date, such other date reasonably proximate to the date of such action, determination of rights or distribution) as the Company or the Guarantor may specify in a written notice to the Trustee or, in the absence of such written notice, as the Trustee may determine. ARTICLE FOURTEEN MEETINGS OF HOLDERS OF SECURITIES Section 1401. Purposes for Which Meetings May Be Called. A meeting of Holders of Securities of any series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such series. Section 1402. Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in Section 1401, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or, if Securities of such series have been issued in whole or in part as Bearer Securities, in London or in such place outside the United States as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 180 days prior to the date fixed for the meeting. 89 (b) In case at any time the Company or the Guarantor (in each case, by or pursuant to a Board Resolution) or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 1401, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to Section 106) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company, the Guarantor or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or, if Securities of such series are to be issued as Bearer Securities, in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (a) of this Section. Section 1403. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company or the Guarantor and their respective counsel. Section 1404. Quorum; Action. The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of at least 66-2/3% in principal amount of the Outstanding Securities of a series, the Persons entitled to vote 66-2/3% in principal amount of the Outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 1402(1), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum. 90 Except as limited by the proviso to Section 902, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by the proviso to Section 902, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of at least 66-2/3% in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly convened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of 66-2/3% in principal amount of the Outstanding Securities of that series; and provided, further, that, except as limited by the proviso to Section 902, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series. Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the Coupons appertaining thereto, whether or not such Holders were present or represented at the meeting. Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104 or by having the signature of the person executing the proxy witnessed or guaranteed by any trust company, bank or banker authorized by Section 104 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company, the Guarantor or Holders of Securities as provided in Section 1402(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons 91 entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting. (c) At any meeting, each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. (d) Any meeting of Holders of Securities of any series duly called pursuant to Section 1402 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting; and the meeting may be held as so adjourned without further notice. Section 1406. Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1402 and, if applicable, Section 1404. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, another to the Guarantor and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. 92 ARTICLE FIFTEEN PURCHASES OF SECURITIES UPON CHANGE IN CONTROL Section 1501. Purchase of Securities at Option of the Holder upon Change in Control. (1) If on or prior to Maturity, there shall have occurred a Change in Control (as defined herein), the Securities shall be purchased, at the option of the Holder thereof, by the Company at the purchase price specified in the Securities (the "Change in Control Purchase Price"), on the date that is 35 Business Days after the occurrence of the Change in Control (the "Change in Control Purchase Date"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 1501(3). A "Change in Control" shall be deemed to have occurred at such time as any of the following events shall occur: (a) Any person (for purposes of paragraph (a) of this Section 1501(1) only, the term "person" shall mean a "person" as defined in or for purposes of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act of 1934 (as defined herein), or any successor provision to either of the foregoing, including any "group" acting for the purposes of acquiring, holding or disposing of securities within the meaning of Rule 13D-5(b)(1) under the Exchange Act of 1934), together with its Affiliates and Associates (as defined herein), shall file or become obligated to file a report under or in response to Schedule 13D or 14D-1 (or any successor schedule, form or report) pursuant to the Exchange Act of 1934 disclosing that such person has become the beneficial owner (as the term "beneficial owner" is defined in Rule 13d-3 under the Exchange Act of 1934, or any successor provision) of either (A) 50% or more of the shares of Common Stock of the Guarantor then outstanding or (B) 50% or more of the voting power of the Voting Stock of the Guarantor then outstanding; provided, however, that for purposes of paragraph (a) of this Section 1501(1), a person shall not be deemed the beneficial owner of (1) any securities tendered pursuant to a tender offer or exchange offer made by or on behalf of such person, or its Affiliates or Associates, until such tendered securities are accepted for purchase or exchange thereunder, or (2) any securities in respect of which beneficial ownership by such person arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation that is made pursuant to, and in accordance with, the Exchange Act of 1934 and the applicable rules and regulations thereunder and is not then reportable on Schedule 13D (or any successor schedule, form or report) under the Exchange Act of 1934. (b) There shall be consummated any sale, transfer, lease or conveyance of all or substantially all of the properties and assets of the Guarantor to any other Corporation or Corporations or other Person or Persons (other than a Subsidiary of the Guarantor). 93 (c) There shall be consummated any consolidation of the Guarantor with or merger of the Guarantor with or into any other Person (whether or not affiliated with the Guarantor) in which the Guarantor is not the sole surviving or continuing Corporation or pursuant to which the shares of Common Stock outstanding immediately prior to the consummation of such consolidation or merger are converted into cash, securities or other property, other than a consolidation or merger in which the holders of shares of Common Stock receive, directly or indirectly, (A) 75% or more of the common stock of the sole surviving or continuing Corporation outstanding immediately following the consummation of such consolidation or merger and (B) securities representing 75% or more of the combined voting power of the Voting Stock of the sole surviving or continuing Corporation outstanding immediately following the consummation thereof of such consolidation or merger. "Exchange Act of 1934" shall mean the Securities Exchange Act of 1934, as amended. "Associate" shall have the meaning ascribed to such term in Rule 12b-2 under the Exchange Act of 1934, as in effect on the date hereof. (2) Within 15 Business Days after the occurrence of a Change in Control, the Company shall mail a written notice of Change in Control by first-class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law, including, without limitation, Rule 13e-4) and shall cause a copy of such notice to be published at least once in an Authorized Newspaper located in New York City and, if any Securities are then listed on any stock exchange located outside the United States, in an Authorized Newspaper in such city as the stock exchange so requires. The notice shall include or transmit a form of Change in Control Purchase Notice (as described below) to be completed by the Holder and shall state: (a) the events causing a Change in Control and the date of such Change in Control; (b) the date by which the Change in Control Purchase Notice pursuant to this Section 1601 must be given; (c) the Change in Control Purchase Date; (d) the Change in Control Purchase Price; (e) the name and address of the Trustee and the Office or Agency; (f) that the Securities must be surrendered to the Trustee or the Office or Agency to collect payment; (g) that the Change in Control Purchase Price for any Security as to which a Change in Control Purchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Change in Control Purchase Date or the time of surrender of such Security as described in (f); 94 (h) the procedures the Holder must follow to exercise rights under this Section 1501(1) and a brief description of those rights; and (i) the procedures for withdrawing a Change in Control Purchase Notice. (3) A Holder may exercise its rights specified in Section 1501(1) upon delivery of a written notice of purchase (a "Change in Control Purchase Notice") to the Trustee or to an Office or Agency at any time prior to the close of business of the Change in Control Purchase Date, stating: (a) the certificate number or numbers of the Security or Securities which the Holder will deliver to be purchased; (b) the portion of the principal amount of the Security or Securities which the Holder will deliver to be purchased, which portion must be $1,000 or an integral multiple thereof; and (c) that such Security or Securities shall be purchased on the Change in Control Purchase Date pursuant to the terms and conditions specified in the Securities. The delivery of the Security, by hand or by registered mail prior to, on or after the Change in Control Purchase Date (together with all necessary endorsements), to the Trustee or to an Office or Agency shall be a condition precedent to the obligation of the Company to pay to the Holder the Change in Control Purchase Price therefor; provided, however, that such Change in Control Purchase Price shall be so paid pursuant to this Section 1501 only if the Security so delivered to the Trustee or such Office or Agency shall conform in all respects to the description thereof set forth in the related Change in Control Purchase Notice. Notwithstanding anything herein to the contrary, any Holder delivering to the Trustee or to an Office or Agency, the Change in Control Purchase Notice contemplated by this Section 1501(3) shall have the right to withdraw such Change in Control Purchase Notice at any time prior to or on the Change in Control Purchase Date by delivery of a written notice of withdrawal to the Trustee or to such Office or Agency in accordance with Section 1502. Section 1502. Effect of Change in Control Purchase Notice. Upon receipt by the Company of the Change in Control Purchase Notice specified in Section 1501(3), the Holder of the Security in respect of which such Change in Control Purchase Notice was given shall (unless such Change in Control Purchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to receive solely the Change in Control Purchase Price with respect to such Security. Such Change in Control Purchase Price shall be paid to such Holder promptly following the later of (x) the Change in Control Purchase Date, as the case may be, with respect to such Security (provided the conditions in Section 1501(3), as applicable, have been satisfied) 95 and (y) the time of delivery of such Security to the Trustee or to an Office or Agency by the Holder thereof in the manner required by Section 1501(3), as applicable. A Change in Control Purchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Trustee or to an Office or Agency at any time prior to the close of business on the Change in Control Purchase Date, specifying: (a) the certificate number or numbers of the Security or Securities in respect of which such notice of withdrawal is being submitted; (b) the principal amount of the Security or Securities with respect to which such notice of withdrawal is being submitted; and (c) the principal amount, if any, of such Security or Securities which remains subject to the original Change in Control Purchase Notice, and which has been and will be delivered for purchase by the Company. There shall be no purchase of any Securities pursuant to Section 1501 if there has occurred and in continuing an Event of Default (other than a default in the payment of the Change in Control Purchase Price). Section 1503. Deposit of Change in Control Purchase Price. Prior to 12:00 Noon (local time in The City of New York) on the Business Day following the Change in Control Purchase Date, the Company shall deposit with the Trustee (or, if the Guarantor or a Subsidiary or an Affiliate of any of them is acting as Paying Agent, shall segregate and hold in trust as provided in Section 1003) an amount of cash in immediately available funds or securities, if expressly permitted hereunder, sufficient to pay the aggregate Change in Control Purchase Price of all the Securities or portions thereof which are to be purchased. If a deposit is made with the Trustee of the aforesaid amount of cash or securities, the Securities or portions thereof with respect to which a Change in Control Purchase Notice has been delivered and not validly withdrawn shall become due and payable as of the Business Day following the applicable Change in Control Purchase Date, and on and after such date interest payable in respect of such Securities shall cease and all other rights of the Holders thereof shall terminate, other than the right to receive the Change in Control Purchase Price upon delivery of such Securities to the Trustee. Section 1504. Covenant to Comply With Securities Laws Upon Purchase of Securities. In connection with any purchase of securities under Section 1501 hereof, the Company shall (a) comply with Rule 13e-4 under the Exchange Act of 1934, if applicable, (b) file the related Schedule 13E-4 (or any successor schedule, form or report) under the Exchange Act of 1934, if 96 applicable, and (c) otherwise comply with all Federal and state securities laws regulating the purchase of the Securities (including positions of the Commission under applicable no-action letters) so as to permit the rights and obligation under Section 1501 to be exercised in the time and in the manner specified in Section 1501 and 1502. Section 1505. Repayment to the Company. The Trustee shall return to the Company any cash, together with interest or dividends, if any, thereon (subject to the provisions of Section 605) held by it for the payment of the Change in Control Purchase Price of the Securities that remain unclaimed as provided in the Securities; provided, however, that to the extent the aggregate amount of cash deposited by the Company pursuant to Section 1503 exceeds the aggregate Change in Control Purchase Price of the Securities or portions thereof to be purchased, then promptly after the Change in Control Purchase Date, the Trustee shall return any such excess to the Company together with interest or dividends, if any, thereon (subject to the provisions of Section 605). ARTICLE SIXTEEN GUARANTEES Section 1601. Guarantee. The Guarantor hereby irrevocably and unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of and any premium and interest on and any Additional Amounts with respect to such Security and the due and punctual payment of any payments provided for pursuant to the terms of such Security and any Coupons appertaining thereto, when and as the same shall become due and payable, whether at the State Maturity, by declaration of acceleration, call for redemption or repayment or otherwise, in accordance with the terms of such Security, any such Coupons and this Indenture, and any and all other amounts owed by the Company to the Trustee or the Holders under the terms of this Indenture. This guarantee will not be discharged with respect to any Securities of any series or Coupons appertaining thereto except by payment in full of the principal thereof, premium, if any, and interest thereon and all other amounts payable thereunder and under this Indenture with respect thereto. The Guarantor hereby expressly waives its right to require the Trustee to pursue or exhaust its legal or equitable remedies against the Issuer prior to exercising its rights under this guarantee. In case of the failure of the Company punctually to make any such payment, the Guarantor hereby agrees to cause such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or repayment or otherwise, and as if such payment were made by the Company. 97 The Guarantor hereby agrees that any amounts to be paid by it hereunder shall be paid without deduction or withholding for or on account of any and all present or future tax, duty, assessment or governmental charge imposed upon or as a result of such payment by the Government of the United States, or any state or other political subdivision or taxing authority thereof or therein, or if deduction or withholding of any such tax, duty, assessment or charge shall at any time be required by or on behalf of the Government of the United States or any such state, political subdivision or taxing authority, the Guarantor shall pay such additional amount in respect of principal, premium, if any, and interest, if any, as may be necessary in order that the net amounts paid to the Holder of a Security or the Trustee on behalf of the Holder of such Security, as the case may be, pursuant to this guarantee after such deduction or withholding shall not be less than the amount provided for in such Security to be then due and payable; except that no such additional amount shall be payable in respect of any Security to any Holder (a) who is subject to such tax, duty, assessment or governmental charge in respect of such Security by reason of his being connected with the United States otherwise than merely by the holding or ownership of such Security, or (b) who is not dealing at arm's length with the Guarantor (within the meaning of the Internal Revenue Code as amended from time to time). The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of any Security or this Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of such Security or by the Trustee with respect to any provisions thereof or of this Indenture, the obtaining of any judgment against the Company or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that no guarantee (including any Guarantee endorsed on a Security) will be discharged in respect of any Security except by complete performance of the obligations contained in such Security and in this guarantee. The Guarantor hereby agrees that, in the event of a default in payment of principal (or premium, if any) or interest, if any, on or Additional Amounts with respect to any Security, or a default in any payment referred to therein, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, on the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce this guarantee without first proceeding against the Company. The Guarantor shall be subrogated to all rights of the Holders of the Securities of a particular series against the Company in respect of any amounts paid by the Guarantor on account of such Securities pursuant to the provisions of this guarantee or this Indenture; 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, any premium and interest on, and Additional Amounts with respect to, all Securities of such series issued hereunder shall have been paid in full. 98 Section 1602. Execution and Delivery of Guarantees. The Guarantees to be endorsed on the Securities of each series shall include the terms of the guarantee set forth in Section 202 (except that references to premium and interest need be included only if any premium or interest, respectively, is provided for in the terms of such series) and any other terms that may be set forth in the form established pursuant to Section 202 with respect to such series. The Guarantor hereby agrees to execute the Guarantees, in a form established pursuant to Section 202, to be endorsed on each Security authenticated and delivered by the Trustee. The Guarantees shall be executed on behalf of the Guarantor by its Chairman of the Board, a Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Guarantees may be manual or facsimile. Guarantees bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Guarantor shall bind the Guarantor, notwithstanding that such individuals or any of them have cased to hold such offices prior to the authentication and delivery of such Guarantees or did not hold such offices at the date of such Guarantees. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in Section 202 and in this Article shall remain in full force and effect notwithstanding any failure to endorse a Guarantee on any Security. The Guarantees shall continue to be effective or be reinstated, as the case may be, if at any time payment on any Security, in whole or in part, is rescinded or must otherwise be restored to the Company or the Guarantor upon the bankruptcy, liquidation or reorganization of the Company or the Guarantor or otherwise. ARTICLE SEVENTEEN MISCELLANEOUS Section 1701. Submission to Jurisdiction The Company hereby acknowledges and agrees for the benefit of the Trustee and the Holders of Securities and Coupons that any judicial proceedings instituted in relation to any matter arising out of this Indenture, the Securities or the Coupons may be brought in any court having subject matter jurisdiction in the Borough of Manhattan, The City of New York, New York (including, without limitation, federal courts located in the Borough of Manhattan, The City of New York, New York), and, by execution and delivery of this Indenture, the Company hereby irrevocably accepts generally and unconditionally, the jurisdiction of the aforesaid courts, acknowledges their competence and irrevocably agrees to be bound by any judgment rendered in any such proceeding. The Company also 99 irrevocably and unconditionally waives for the benefit of the Trustee and the Holders of Securities and Coupons any immunity from jurisdiction and any immunity from legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) in respect of this Indenture. The Company hereby irrevocably designates and appoints for the benefit of the Trustee and the Holders of Securities, Guarantees and Coupons for the term of this Indenture CT Corporation, 111 8th Avenue, New York, New York 10011 as its agent to receive on its behalf service of all process (with a copy of all such service of process to be delivered to CT Corporation, 111 8th Avenue, New York, New York 10011) brought against it with respect to any such proceeding in any such court in the City of New York, such service being hereby acknowledged by the Company to be effective and binding service on it in every respect whether or not the Company shall then be doing or shall have at any time done business in New York. Such appointment shall be irrevocable so long as any of the Securities or Coupons or the obligations of the Company hereunder remain outstanding until the appointment of a successor by the Company and such successor's acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees for the benefit of the Trustee and the Holders of the Securities and the Coupons to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said CT Corporation in full force and effect so long as any of the Securities or Coupons or the obligations of the Company hereunder shall be outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take such action. Nothing herein shall affect the right to serve process in any other manner permitted by any law or limit the right of the Trustee or any Holder to institute proceedings against the Company in the courts of any other jurisdiction or jurisdictions. Section 1702. Stamp Duty The Company and the Guarantor, jointly and severally, agree to pay or reimburse any Holder of Securities or Coupons for stamp duty or similar governmental charges imposed upon this Indenture, any Securities or any Coupons. 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. 100 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed, all as of the day and year first above written. [SEAL] APACHE FINANCE CANADA CORPORATION By: /s/ Roger B. Plank ------------------------------- Name: Roger B. Plank Title: Vice President, Chief Financial Officer and a Director Attest: By: /s/ Cheri L. Peper ------------------------- Name: Cheri L. Peper Title: Secretary [SEAL] APACHE CORPORATION Attest: By /s/ Cheri L. Peper By /s/ Matthew W. Dundrea -------------------------- -------------------------------- Name: Cheri L. Peper Name: Matthew W. Dundrea Title: Secretary Title: Vice President and Treasurer 101 [SEAL] THE CHASE MANHATTAN BANK, as Trustee Attest: By /s/ Glenn G. McKeever By /s/ Andrew M. Deck -------------------------- -------------------------------- Name: Glenn G. McKeever Name: Andrew M. Deck Title: Senior Trust Officer Title: Vice President 102 STATE OF TEXAS : SS.: COUNTY OF HARRIS On the 24th day of November, 1999, before me personally came Matthew W. Dundrea, to me known, who, being by me duly sworn, did depose and say that he is the Vice President and Treasurer of APACHE CORPORATION, a State of Delaware corporation, one of the persons described in and who executed the foregoing instrument; that he knows the seal of said Corporation; that the seal affixed to said instrument is such Corporation's seal; that it was so affixed by authority of the Board of Directors of said Corporation; and that he signed his name thereto by like authority. /s/ JEAN-MONIQUE MACIEL ------------------------------------ Notary Public [NOTARIAL SEAL] STATE OF TEXAS : SS.: COUNTY OF HARRIS On the 24th day of November, 1999, before me personally came Roger B. Plank, to me known, who, being by me duly sworn, did depose and say that he is a Director of APACHE FINANCE CANADA CORPORATION, an unlimited liability company organized under the laws of Nova Scotia, Canada, one of the persons described in and who executed the foregoing instrument; that he knows the seal of said Corporation; that the seal affixed to said instrument is such Corporation's seal; that it was so affixed by authority of the Board of Directors of said Corporation; and that he signed his name thereto by like authority. /s/ JEAN-MONIQUE MACIEL ------------------------------------ Notary Public [NOTARIAL SEAL] 103 STATE OF NEW YORK : SS.: COUNTY OF NEW YORK On the 29th day of November, 1999, before me personally came Andrew M. Deck, to me known, who, being by me duly sworn, did depose and say that he is a Vice President of THE CHASE MANHATTAN BANK, a banking corporation organized and existing under the laws of the State of New York, one of the persons described in and who executed the foregoing instrument; that he knows the seal of said Corporation; that the seal affixed to said instrument is such Corporation's seal; that it was so affixed by authority of the Board of Directors of said Corporation; and that he signed his name thereto by like authority. /s/ ANNABELLE DeLUCA ------------------------------------ Notary Public [NOTARIAL SEAL] 104 EX-4.2 4 h08254exv4w2.txt REGISTRATION RIGHTS AGREEMENT DATED 5/15/2003 EXHIBIT 4.2 ================================================================================ REGISTRATION RIGHTS AGREEMENT Dated as of May 15, 2003 among Apache Finance Canada Corporation, as Issuer Apache Corporation, as Guarantor and Banc of America Securities LLC Deutsche Bank Securities Inc. BNP Paribas Securities Corp. Citigroup Global Markets Inc. J.P. Morgan Securities Inc. RBC Dominion Securities Corporation ABN AMRO Incorporated Banc One Capital Markets, Inc. The Royal Bank of Scotland plc SG Cowen Securities Corporation Scotia Capital (USA) Inc. TD Securities (USA) Inc. Wachovia Securities, Inc., as Initial Purchasers ================================================================================ REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is made and entered into this 15th day of May, 2003, by and among Apache Finance Canada Corporation, an unlimited liability company organized under the laws of Nova Scotia, Canada (the "Issuer") and Apache Corporation, a Delaware corporation (the "Guarantor"), and Banc of America Securities LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., J.P. Morgan Securities Inc., RBC Dominion Securities Corporation, ABN AMRO Incorporated, Banc One Capital Markets, Inc., The Royal Bank of Scotland plc, SG Cowen Securities Corporation, Scotia Capital (USA) Inc., TD Securities (USA) Inc. and Wachovia Securities, Inc. (collectively, the "Initial Purchasers"). This Agreement is made pursuant to the Purchase Agreement, dated May 8, 2003 (the "Purchase Agreement"), among the Issuer, the Guarantor and the Initial Purchasers, which provides for the sale by the Issuer to the Initial Purchasers of an aggregate of $350,000,000 principal amount of the Issuer's 4.375% Notes due May 15, 2015 (the "Notes"). The Notes will be unconditionally guaranteed as to payment of principal, premium, if any, interest and additional amounts, if any, by the Guarantor (the "Guarantee"). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuer and the Guarantor have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 Act" shall mean the Securities Act of 1933, as amended from time to time. "1934 Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Closing Date" shall mean the Closing Time as defined in the Purchase Agreement. "Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Issuer, provided, however, that such depositary must have an address in the Borough of Manhattan, in The City of New York. "Exchange Guarantee" shall mean the Guarantor's unconditional guarantee of principal of, and premium, if any, interest and additional amounts, if any, on the Exchange Notes containing terms identical in all material respects to the Guarantee. "Exchange Notes" shall mean the 4.375% Notes due May 15, 2015, issued by the Issuer under the Indenture containing terms identical to the Notes in all material respects (except for references to certain interest rate provisions, restrictions on transfers and restrictive legends), to be offered to Holders of Notes in exchange for Registrable Notes pursuant to the Exchange Offer. "Exchange Offer" shall mean the exchange offer by the Issuer of Exchange Notes for Registrable Notes and the exchange offer by the Guarantor of the Exchange Guarantee for the Registrable Guarantee pursuant to Section 2.1 hereof. "Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2.1 hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Exchange Period" shall have the meaning set forth in Section 2.1 hereof. "Guarantee" shall have the meaning set forth in the preamble to this Agreement. "Holder" shall mean each of the Initial Purchasers, for so long as it owns any Registrable Notes, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Notes under the Indenture. "Indenture" shall mean the Indenture relating to the Notes, dated as of November 23, 1999, by and among the Issuer, the Guarantor and JPMorgan Chase Bank, as successor trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof. "Initial Purchasers" shall have the meaning set forth in the preamble to this Agreement. "Issuer" shall have the meaning set forth in the preamble and shall also include the Issuer's successors. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Outstanding (as defined in the Indenture) Registrable Notes; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Issuer or the Guarantor or any Affiliate (as defined in the Indenture) of the Issuer or any Guarantor shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount. "Notes" shall have the meaning set forth in the preamble to this Agreement. "Participating Broker-Dealer" shall mean Banc of America Securities LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., J.P. Morgan Securities Inc., RBC Dominion Securities Corporation, ABN AMRO 2 Incorporated, Banc One Capital Markets, Inc., The Royal Bank of Scotland plc, SG Cowen Securities Corporation, Scotia Capital (USA) Inc., TD Securities (USA) Inc. and Wachovia Securities, Inc., and any other broker-dealer which makes a market in the Notes and exchanges Registrable Notes in the Exchange Offer for Exchange Notes. "Person" shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or incorporated organization, or a government or agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Notes and Registrable Guarantee covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. "Purchase Agreement" shall have the meaning set forth in the preamble. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Issuer and the Guarantor with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. (the "NASD") registration and filing fees, including, if applicable, the reasonable fees and expenses of any "qualified independent underwriter" (and its counsel) that is required to be retained by any holder of Registrable Notes in accordance with the rules and regulations of the NASD, (ii) all reasonable fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Notes or Registrable Notes and any filings with the NASD), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Notes on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Issuer and the Guarantor and of the independent public accountants of the Issuer and the Guarantor, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, (vii) the fees and expenses of the Trustee, and any escrow agent or custodian, (viii) the reasonable fees and expenses of the Initial Purchasers in connection with the Exchange Offer, including the reasonable fees and expenses of counsel to the Initial Purchasers in connection therewith, and (ix) any reasonable fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the reasonable fees and expenses of any special experts retained by the Issuer or the Guarantor in connection with any Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Notes by a Holder, 3 it being understood that in no event shall the Issuer or the Guarantor be liable for the fees and expenses of more than one counsel (in addition to any local counsel) in connection with registration pursuant to either Section 2.1 or 2.2. "Registrable Guarantee" shall mean the Guarantee in respect of Registrable Notes. "Registrable Notes" shall mean the Notes of any Holder; provided, however, that such Notes shall cease to be Registrable Notes when (i) a Registration Statement with respect to such Notes shall have been declared effective under the 1933 Act and such Notes shall have been disposed of pursuant to such Registration Statement, (ii) such Notes can be sold to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Notes shall have ceased to be outstanding or (iv) the Exchange Offer is consummated (except in the case of Notes purchased from the Issuer and continued to be held by the Initial Purchasers). "Registration Statement" shall mean any registration statement of the Issuer and the Guarantor which covers any of the Exchange Notes and Exchange Guarantee or Registrable Notes and Registrable Guarantee pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission. "Shelf Registration" shall mean a registration effected pursuant to Section 2.2 hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Issuer and the Guarantor pursuant to the provisions of Section 2.2 of this Agreement which covers all of the Registrable Notes and Registrable Guarantee on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Trustee" shall mean the trustee with respect to the Notes under the Indenture. 2. Registration Under the 1933 Act. 2.1. Exchange Offer. The Issuer and the Guarantor shall (A) prepare and, as soon as practicable but not later than 90 calendar days following the Closing Date, file with the SEC an Exchange Offer Registration Statement with respect to a proposed Exchange Offer and the issuance and delivery to the Holders, in exchange for the Registrable Notes of each series, a like principal amount of Exchange Notes of such series, (B) use their reasonable best efforts to 4 cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act not later than 150 calendar days following the Closing Date, (C) use their reasonable best efforts to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer and (D) use their reasonable best efforts to cause the Exchange Offer to be consummated within 270 calendar days following the Closing Date. The Exchange Notes will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Issuer shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Notes together with the Registrable Guarantee for Exchange Notes together with the Exchange Guarantee (assuming that such Holder (a) is not an affiliate of the Issuer or the Guarantor within the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer tendering Registrable Notes acquired directly from the Issuer for its own account, (c) acquired the Exchange Notes in the ordinary course of such Holder's business and (d) has no arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing the Exchange Notes) to transfer such Exchange Notes from and after their receipt without any limitations or restrictions under the 1933 Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. The Exchange Notes will be issued under the Exchange Offer as evidence of the same continuing indebtedness under the Registrable Notes. Under no circumstances will the surrender of the Registrable Notes and the issue of the Exchange Notes constitute new indebtedness or obligate the Issuer to repay the principal amount of the Registrable Notes in connection with the Exchange Offer. In connection with the Exchange Offer, the Issuer and the Guarantor shall: (a) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement together with an appropriate letter of transmittal and related documents; (b) keep the Exchange Offer open for acceptance for a period of not less than 20 business days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the "Exchange Period"); (c) utilize the services of the Depositary for the Exchange Offer; (d) permit Holders to withdraw tendered Registrable Notes at any time prior to 5:00 p.m. (Eastern Time) on the last business day of the Exchange Period, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal, the principal amount of Registrable Notes delivered for exchange, and a statement that such Holder is withdrawing his election to have such Notes exchanged; (e) notify each Holder that any Registrable Notes not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchasers and Participating Broker-Dealers as provided herein); and 5 (f) otherwise comply in all respects with all applicable laws relating to the Exchange Offer. As soon as practicable after the close of the Exchange Offer, the Issuer and the Guarantor shall: (i) accept for exchange all Registrable Notes duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto; (ii) deliver to the Trustee for cancellation all Registrable Notes so accepted for exchange; and (iii) cause the Trustee promptly to authenticate and deliver the respective Exchange Notes to each Holder of Registrable Notes so accepted for exchange in a principal amount equal to the principal amount of the Registrable Notes of such Holder so accepted for exchange and the Guarantor will execute the Exchange Guarantee. The Issuer and the Guarantor shall use their reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by all Participating Broker-Dealers subject to the prospectus delivery requirements of the 1933 Act for such period of time as such Participating Broker-Dealers must comply with such requirements in order to resell the Exchange Notes; provided, however, that (i) such period shall be the lesser of 90 days after the consummation of the Exchange Offer and the date on which all Participating Broker-Dealers have sold all Exchange Notes held by them (unless such period is extended pursuant to Section 3(k) below) and (ii) the Issuer and the Guarantor shall make such Prospectus, and any amendment or supplement thereto, available to any such Participating Broker-Dealer for use in connection with any resale of any Exchange Notes for a period of the lesser of 90 days after the consummation of the Exchange Offer and the date on which all Participating Broker-Dealers have sold all Exchange Notes held by them (unless such period is extended pursuant to Section 3(k) below). Interest on the Exchange Notes will accrue from the most recent interest payment date to which interest has been paid on the respective Registrable Notes surrendered in exchange therefor or, if no interest has been paid on such Registrable Notes, from the date of original issuance. The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer, or the making of any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (ii) the due tendering of Registrable Notes in accordance with the Exchange Offer, (iii) that each Holder of Registrable Notes exchanged in the Exchange Offer shall have represented that all Exchange Notes to be received by it shall be acquired in the ordinary course of its business and that at the time of the consummation of the Exchange Offer it shall have no arrangement or understanding with any person to participate in the distribution (within the meaning of the 1933 Act) of the Exchange Notes and shall have made such other representations as may be reasonably necessary under applicable SEC rules, 6 regulations or interpretations to render the use of Form S-4 or other appropriate form under the 1933 Act available and (iv) that no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the judgment of the Issuer and the Guarantor, would reasonably be expected to impair the ability of the Issuer or the Guarantor to proceed with the Exchange Offer. The Issuer and the Guarantor shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Notes in the Exchange Offer. 2.2. Shelf Registration. (i) If, because of any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC, the Issuer or the Guarantor is not permitted to effect the Exchange Offer as contemplated by Section 2.1 hereof, (ii) if for any other reason (A) the Exchange Offer Registration Statement is not declared effective within 150 calendar days following the Closing Date or (B) the Exchange Offer is not consummated within 270 calendar days after the Closing Date (provided that the Issuer is not then actively pursuing such effectiveness or consummation, as the case may be), (iii) upon the written request of the Initial Purchasers with respect to any Registrable Notes which it acquired directly from the Issuer or (iv) upon the written request of any Holder that either (A) is not permitted pursuant to applicable law, SEC rules and regulations or applicable interpretations thereof by the staff of the SEC to participate in the Exchange Offer or (B) participates in the Exchange Offer and does not receive fully tradable Exchange Notes pursuant to the Exchange Offer, then in case of each of clauses (i) through (iv) the Issuer and the Guarantor shall, at their cost: (a) As promptly as practicable, file with the SEC, and thereafter shall use their reasonable best efforts to cause to be declared effective as promptly as practicable but no later than 270 calendar days after the Closing Date, a Shelf Registration Statement relating to the offer and sale of the Registrable Notes together with the Registrable Guarantee by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders participating in the Shelf Registration and set forth in such Shelf Registration Statement. (b) Use their reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be usable by Holders for a period ending on the earliest of (i) two years from the date the Registrable Notes were originally issued by the Issuer, (ii) the date on which the Registrable Notes become eligible for resale without volume limitations pursuant to Rule 144 under the 1933 Act, or (iii) for such shorter period that will terminate when all Registrable Notes of each series covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Notes. (c) Notwithstanding any other provisions hereof, use their best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, 7 contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading. The Issuer and the Guarantor further agree, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(b) below, and to furnish to the Holders of Registrable Notes copies of any such supplement or amendment promptly as reasonably practicable after its being used or filed with the SEC. 2.3. Expenses. The Issuer and the Guarantor shall pay all Registration Expenses in connection with the registration pursuant to Section 2.1 or 2.2. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Notes pursuant to the Shelf Registration Statement. 2.4. Effectiveness. (a) The Issuer and the Guarantor will be deemed not to have used their reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Issuer or the Guarantor voluntarily takes any action that would, or omits to take any action which omission would, result in any such Registration Statement not being declared effective or in the holders of Registrable Notes covered thereby not being able to exchange or offer and sell such Registrable Notes that during that period as and to the extent contemplated hereby, unless such action is required by applicable law. (b) An Exchange Offer Registration Statement pursuant to Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Notes pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference until the offering of Registrable Notes pursuant to such Registration Statement may legally resume. 2.5. Interest. The Notes will provide that if the Exchange Offer is not consummated and the Shelf Registration Statement is not declared effective on or prior to the date that is 270 days after the Closing Date, the interest rate on the Notes will be increased by 0.25% per annum commencing the date that is 270 days after the Closing Date, until the Exchange Offer is consummated or the Shelf Registration Statement is declared effective by the SEC; provided, that in the case of a Shelf Registration Statement, if the Issuer and the Guarantor are unable to cause such Shelf Registration Statement to become effective because Holders of Registrable Notes have not provided information with respect to themselves as required by law to be included therein pursuant to the Issuer's or the Guarantor's request as provided herein, such 0.25% increase in the interest rate shall be payable only to Holders that have furnished such information required by law to be included therein to the Issuer or the 8 Guarantor pursuant to its request hereunder from but excluding the date such information is provided to the Issuer or the Guarantor to but excluding the date the Shelf Registration Statement is declared effective by the SEC. 2.6. Specific Enforcement. Without limiting the remedies available to the Initial Purchasers and the Holders, the Issuer and the Guarantor acknowledge that any failure by the Issuer or the Guarantor to comply with their respective obligations under Sections 2.1 and 2.2 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Issuer's and the Guarantor's obligations under Sections 2.1 and 2.2 hereof. 3. Registration Procedures. In connection with the obligations of the Issuer and the Guarantor with respect to Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Issuer and the Guarantor shall: (a) prepare and file with the SEC a Registration Statement, within the relevant time period specified in Section 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Issuer and the Guarantor, (ii) shall in the case of a Shelf Registration, be available for the sale of the Registrable Notes by the selling Holders thereof, (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and (iv) shall comply in all respects with the requirements of Regulation S-T under the 1933 Act, and use their best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act and comply with the provisions of the 1933 Act applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof; (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Notes, at least 5 business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Notes is being filed and advising such Holders that the distribution of Registrable Notes and Registrable Guarantee will be made in accordance with the method selected by the Majority Holders participating in the Shelf Registration; (ii) furnish to each Holder of Registrable Notes and to each underwriter of an underwritten offering of Registrable Notes, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so 9 requests, all exhibits in order to facilitate the public sale or other disposition of the Registrable Notes; and (iii) hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Notes in connection with the offering and sale of the Registrable Notes covered by the Prospectus or any amendment or supplement thereto; (d) use their best efforts to register or qualify the Registrable Notes under all applicable state Notes or "blue sky" laws of such jurisdictions as any Holder of Registrable Notes covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Notes shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Notes owned by such Holder; provided, however, that neither the Issuer nor the Guarantor shall be required to (i) qualify as a foreign corporation or as a dealer in Securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; (e) notify promptly each Holder of Registrable Notes under a Shelf Registration or any Participating Broker-Dealer who has notified the Issuer and the Guarantor that it is utilizing the Exchange Offer Registration Statement as provided in paragraph (f) below, and, if requested by such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for addition information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Registrable Notes covered thereby, the representations and warranties of the Issuer and the Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading and (vi) of the receipt by the Issuer or the Guarantor of any notification with respect to the suspension of the qualification of the Registrable Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (f) (A) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled "Plan of Distribution" which section shall include all information that the Initial Purchasers may reasonably 10 request, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that holds Registrable Notes acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of Exchange Notes to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of the Initial Purchasers and their counsel, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Notes for Registrable Notes pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Notes, (ii) furnish to each Participating Broker-Dealer who has delivered to the Issuer and the Guarantor the notice referred to in Section 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request, (iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any person subject to the prospectus delivery requirement of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Notes covered by the Prospectus or any amendment or supplement thereto, and (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision: "if the exchange offeree is a broker-dealer holding Registrable Notes acquired for its own account as a result of market-making activities or other trading activities, it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Notes received in respect of such Registrable Notes pursuant to the Exchange Offer;" and (y) a statement to the effect that by a broker-dealer making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Registrable Notes, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act; and (B) in the case of any Exchange Offer Registration Statement, the Issuer and the Guarantor agree to deliver to the Participating Broker-Dealers upon the effectiveness of the Exchange Offer Registration Statement (i) an opinion of counsel or opinions of counsel substantially in the form attached hereto as Exhibit A, (ii) an officers' certificate substantially in the form customarily delivered in a public offering of debt securities and (iii) a comfort letter or comfort letters in customary form if permitted by Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts ("SAS 72"), or if such a comfort letter is not permitted by SAS 72, an agreed upon procedures letter in customary form at least as broad in scope and coverage as the comfort letter or 11 comfort letters delivered to the Initial Purchasers in connection with the initial sale of the Notes to the Initial Purchasers; (g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Notes copies of any comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information; (h) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment; (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Notes, and each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested); (j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Notes to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold and not bearing any restrictive legends; and enable such Registrable Notes to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least 3 business days prior to the closing of any sale of Registrable Notes; (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(e)(v) and 3(e)(vi) hereof, use its best efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified; (l) in the case of a Shelf Registration, a reasonable time prior to the filing of any Registration Statement, any Prospectus, an amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers on behalf of such Holders; and make representatives of the Issuer and the Guarantor as shall be reasonably requested by the Holders of Registrable Notes, or the Initial Purchasers on behalf of such Holders, available for discussion of such document; (m) obtain a CUSIP number of all Exchange Notes or Registrable Notes, as the case may be, not later than the effective date of a Registration Statement, and provide the 12 Trustee with printed certificates for the Exchange Notes or the Registrable Notes, as the case may be, in a form eligible for deposit with the Depositary; (n) (i) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Notes or Registrable Notes, as the case may be, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (o) in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Notes and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration: (i) make such representations and warranties to the Holders of such Registrable Notes and the underwriters, if any, in form, substances and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them; (ii) obtain opinions of counsel to the Issuer and the Guarantor and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the holders of a majority in principal amount of the Registrable Notes of each series being sold) addressed to each selling Holder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters; (iii) obtain "cold comfort" letters and updates thereof from the independent certified public accountants who have certified the financial statements of the Guarantor and any other entity included or incorporated by reference in the Registration Statement addressed to the underwriters, if any, and use reasonable efforts to have such letter addressed to the selling Holders of Registrable Notes (to the extent consistent with SAS 72), such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with similar underwritten offerings; (iv) enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Notes, which agreement shall be in form, substances and scope customary for similar offerings; 13 (v) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; and (vi) deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Registrable Notes of each series being sold and the managing underwriters, if any. The above shall be done at (i) the effectiveness of such Registration Statement (and each post-effective amendment thereof) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder; (p) in the case of a Shelf Registration, make available for inspection by representatives of the Holders of the Registrable Notes and any underwriters participating in any disposition pursuant to a Shelf Registration Statement and any counsel or accountant retained by such Holders or underwriters, all financial and other records, pertinent corporate documents and properties of the Issuer and the Guarantor reasonably requested by any such persons and use its reasonable best efforts to cause the respective officers, directors, employees, and any other agents of the Issuer and the Guarantor to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement, and make such representatives of the Issuer and the Guarantor available for discussion of such documents as shall be reasonably requested by the Initial Purchasers; (q) (i) in the case of an Exchange Offer Registration Statement, within a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Initial Purchasers and make such changes in any such document prior to the filing thereof as the Initial Purchasers may reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the Initial Purchasers on behalf of the Holders of Registrable Notes shall reasonably object, and make the representatives of the Issuer and the Guarantor available for discussion of such documents as shall be reasonably requested by the Initial Purchasers; and (ii) in the case of a Shelf Registration, within a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of 14 Registrable Notes, to the Initial Purchasers, to counsel on behalf of the Holders and to the underwriter or underwriters of an underwritten offering of Registrable Notes, if any, make such changes in any such document prior to the filing thereof as the Initial Purchasers, the counsel to the Holders or the underwriter or underwriters reasonably request and not file any such document in a form to which the Majority Holders or the Initial Purchasers on behalf of the Holders of Registrable Notes or any underwriter may reasonably object and make the representatives of the Issuer and the Guarantor available for discussion of such document as shall be reasonably requested by the Holders of Registrable Notes, the Initial Purchasers on behalf of such Holders, or any underwriter. (r) in the case of a Shelf Registration, use their reasonable best efforts to cause all Registrable Notes to be listed on any securities exchange on which similar debt securities issued by the Issuer are then listed if requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Notes, if any; (s) in the case of a Shelf Registration, use their reasonable best efforts to cause the Registrable Notes to be rated by the appropriate rating agencies, if so requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Notes, if any; (t) otherwise comply with all applicable rules and regulations of the SEC and make available to Holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; (u) cooperate and assist in any filings required to be made with the NASD and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD); and (v) upon consummation of an Exchange Offer, obtain a customary opinion of counsel to the Issuer and the Guarantor addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer, and which includes an opinion that (i) the Issuer has duly authorized, executed and delivered the Exchange Notes and the Indenture, (ii) the Guarantor has duly authorized, executed and delivered the Exchange Guarantee and the related indenture and (iii) each of the Exchange Notes, the Exchange Guarantee and Indenture constitute a legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its respective terms (with customary exceptions). In the case of a Shelf Registration Statement, the Issuer and the Guarantor may (as a condition to such Holder's participation in the Shelf Registration) require each Holder of Registrable Notes to furnish to the Issuer and the Guarantor such information regarding the 15 Holder and the proposed distribution by such Holder of such Registrable Notes as the Issuer and the Guarantor may from time to time reasonably request in writing for use in connection with any Shelf Registration Statement or Prospectus included therein, including, without limitation, information specified in item 507 of Regulation S-K under the 1933 Act. Each Holder as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuer and the Guarantor all information required to be disclosed with respect to such Holder in order to make any information with respect to such Holder previously furnished to the Issuer and the Guarantor by such Holder not materially misleading. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Issuer or the Guarantor of the happening of any event or the discovery of any facts, each of the kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue disposition of Registrable Notes pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by the Issuer or the Guarantor, such Holder will deliver to the Issuer and the Guarantor (at its expense) all copies in such Holder's possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Notes current at the time of receipt of such notice. If any of the Registrable Notes covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Registrable Notes included in such offering and shall be acceptable to the Issuer and the Guarantor. No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting agreement. 4. Indemnification; Contribution. (a) The Issuer and the Guarantor, jointly and severally, agree to indemnify and hold harmless the Initial Purchasers, each Holder, each Participating Broker-Dealer, each Person who participates as an underwriter (any such Person being an "Underwriter") and each Person, if any, who controls any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Notes and Exchange Guarantee or Registrable Notes and Registrable Guarantee were registered under the 1933 Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a 16 material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the Issuer and the Guarantor; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party as provided herein), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Issuer or the Guarantor by any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter with respect to such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter, as the case may be, expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) or made in reliance upon the Statements of Eligibility and Qualification of Trustees (Form T-1) under the 1939 Act filed as exhibits to the Registration Statement. (b) Each Holder, each Initial Purchaser, each Participating Broker-Dealer and each Underwriter severally, but not jointly, agrees to indemnify and hold harmless the Issuer, the Guarantor, each other Initial Purchaser, each other Participating Broker-Dealer, each other Underwriter and each other selling Holder, and each of their respective directors and officers, and each Person, if any, who controls the Issuer, the Guarantor, any Initial Purchaser, any Underwriter, any Participating Broker-Dealer or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Issuer by such Holder, Initial Purchaser, Underwriter or Participating Broker-Dealer, respectively, expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided, however, that no indemnifying party shall be liable for any claims hereunder in excess of the amount of net proceeds received by such 17 indemnifying party from the sale of Registrable Securities pursuant to such Shelf Registration Statement; (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action (including any governmental investigation) commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action of separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. (e) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 4 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantor on the one hand and the Initial Purchasers, Holders, Participating Broker-Dealers and Underwriters on the other hand or (ii) if the allocation provided by clause 18 (i) 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 Issuer and the Guarantor on the one hand and of the Initial Purchasers, Holder, Participating Broker-Dealers and Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Guarantor from the offering of the Notes, Exchange Notes, Exchange Guarantee, Registrable Notes and Registrable Guarantee (taken together) included in such offering shall in each case be deemed to include the proceeds received by the Issuer in connection with the offering of the Notes pursuant to the Purchase Agreement. The parties hereto agree that any underwriting fee or commission or reimbursement of fees paid to the Initial Purchasers pursuant to the Purchase Agreement shall not be deemed to be a benefit received by the Initial Purchasers in connection with the offering of the Exchange Notes and Exchange Guarantee or Registrable Notes and Registrable Guarantees included in such offering. The relative fault of the Issuer and the Guarantor on the one hand and the Initial Purchasers, Holders, Participating Broker-Dealers and Underwriters on the other hand 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 Issuer or the Guarantor or by the Initial Purchases, Holders, Participating Broker-Dealers and Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Issuer, the Guarantor, the Initial Purchasers, the Holders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 4 shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 4, no Initial Purchaser or Holder, Participating Broker-Dealer or Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes sold by it were offered exceeds the amount of any damages which such Initial Purchaser, Holder, Participating Broker-Dealer or 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. 19 For purposes of this Section 4, each person, if any, who controls an Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter, as the case may be, and each director of the Issuer and the Guarantor, each officer of the Issuer or Guarantor who signs the Shelf Registration Statement or Exchange Offer Registration Statement, and each person, if any, who controls the Issuer or any Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Issuer and such Guarantor, respectively. The respective obligations of the Initial Purchasers, Holders, Participating Broker-Dealers and Underwriters to contribute pursuant to this Section 4 are several in proportion to the principal amount of Notes purchased by them and not joint. 5. Consent to Jurisdiction; Appointment of Agent to Accept Service of Process. (a) The Issuer irrevocably consents and agrees that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement, may be brought in the courts of the State of New York, or the courts of the United States of America located in The City of New York and, until all amounts due and to become due in respect of the Notes, the Guarantee, the Exchange Notes, the Exchange Guarantee, the Registrable Notes and the Registrable Guarantee have been paid, or until any such legal action, suit or proceeding commenced prior to such payment has been concluded, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues. (b) The Issuer hereby irrevocably designates, appoints, and empowers CT Corporation, with offices currently at 111 8th Avenue, New York, New York 10011, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf service of any and all legal process, summons, notices and documents that may be served in any action, suit or proceeding brought against the Issuer in any such United States federal or state court with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement and that may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Issuer agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 5 reasonably satisfactory to each of the Initial Purchasers. The Issuer further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any such action, suit or proceeding against the Issuer by serving a copy thereof upon the relevant agent for service of process referred to in this Section 5 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, postage prepaid, to the Issuer at its address specified in or designated pursuant to this Agreement, with a copy (similarly mailed) to CT Corporation, 111 8th Avenue, New York, New York 10011. The Issuer agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not 20 impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of the Holders, the Initial Purchasers or any other persons to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the Issuer or bring actions, suits or proceedings against the Issuer in such other jurisdictions, and in such manner, as may be permitted by applicable law. The Issuer hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement brought in the United States federal courts located in The City of New York or the courts of the State of New York located in The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. (c) The provisions of this Section 5 shall survive any termination of this Agreement, in whole or in part. 6. Waiver of Immunities. To the extent that the Issuer or the Guarantor or any of their properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any thereof, from set-off or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement, the Issuer and the Guarantor hereby irrevocably and unconditionally waive, and agree not to plead or claim, any such immunity and consent to such relief and enforcement. 7. Miscellaneous. 7.1. Rule 144 and Rule 144A. For so long as the Guarantor is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Guarantor covenants that it will file the reports required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder. If the Guarantor ceases to be so required to file such reports, the Guarantor covenants that it will upon the request of any Holder of Registrable Notes (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Notes without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Notes, the Guarantor will 21 deliver to such Holder a written statement as to whether it has complied with such requirements. The Issuer agrees to comply with the information obligations to the extent that it is required by applicable law or regulations . 7.2. No Inconsistent Agreements. The Issuer and the Guarantor have not entered into and neither the Issuer nor the Guarantor will after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to the Holders of the Issuer's and the Guarantor's other issued and outstanding Notes under any such agreements. 7.3. Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers of consents to departures from the provisions hereof may not be given unless the Issuer and the Guarantor have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Notes of each series affected by such amendment, modification, supplement, waiver or departure. 7.4. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Issuer and the Guarantor by means of a notice given in accordance with the provisions of this Section 7.4, which address initially is the address set forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the Issuer or the Guarantor initially at the Issuer's and Guarantor's address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 7.4. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the person given the same to the Trustee under the Indenture, at the address specified in such Indenture. 7.5. Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Notes in violation of the terms of the Purchase Agreement. If any transferee of any Holder shall acquire Registrable Notes, in any manner, whether by operation of law or otherwise, such Registrable Notes shall be held subject to all of the terms of this Agreement, and by taking any holding such Registrable Notes such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the 22 restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof. 7.6. Third Party Beneficiaries. The Initial Purchasers (even if the Initial Purchasers are not Holders of Registrable Notes) shall be a third party beneficiary to the agreements made hereunder between the Issuer and the Guarantor, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. Each Holder of Registrable Notes shall be a third party beneficiary to the agreements made hereunder between the Issuer and the Guarantor, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. 7.7. Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 7.8. Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 7.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF. 7.10. Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 23 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. APACHE FINANCE CANADA CORPORATION as Issuer By: /s/ Matthew W. Dundrea ----------------------------------- Name: Matthew W. Dundrea Title: Vice President and Treasurer APACHE CORPORATION as Guarantor By: /s/ Matthew W. Dundrea ----------------------------------- Name: Matthew W. Dundrea Title: Vice President and Treasurer 24 Confirmed and accepted as of the date first above written: BANC OF AMERICA SECURITIES LLC DEUTSCHE BANK SECURITIES INC. BNP PARIBAS SECURITIES CORP. CITIGROUP GLOBAL MARKETS INC. J.P. MORGAN SECURITIES INC. RBC DOMINION SECURITIES CORPORATION ABN AMRO INCORPORATED BANC ONE CAPITAL MARKETS, INC. THE ROYAL BANK OF SCOTLAND PLC SG COWEN SECURITIES CORPORATION SCOTIA CAPITAL (USA) INC. TD SECURITIES (USA) INC. WACHOVIA SECURITIES, INC. By: Deutsche Bank Securities Inc. By: /s/ Ben-Zion Smilchensky ------------------------------------ Authorized Signatory By: /s/ Peter Klosowicz ------------------------------------ Authorized Signatory Acting severally on behalf of themselves and as representatives of the Initial Purchasers named above. 25 Exhibit A Form of Opinion of Counsel We are of the opinion that the Exchange Offer Registration Statement and the Prospectus (other than the financial statements, notes or schedules thereto and other financial data and supplemental schedules included or incorporated by reference therein or omitted therefrom and the Form T-1, as to which we need express no opinion), comply as to form in all material respects with the requirements of the 1933 Act and the applicable rules and regulations promulgated under the 1933 Act. In addition, we have participated in conferences with officers and other representatives of the Issuer and the Guarantor, representatives of the independent public accountants of the Issuer and the Guarantor and representatives of the Initial Purchasers, at which the contents of the Registration Statement and the Prospectus and related matters were discussed and, although we are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus and have not made any independent check or verification thereof, during the course of such participation, no facts came to our attention that caused us to believe that the Registration Statement or any amendment thereto, at the time the Registration Statement or any such amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any amendment or supplement thereto, at the time the Prospectus was issued, at the time any such amended or supplemented Prospectus was issued or at the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; it being understood that we express no belief with respect to the financial statements and schedules and engineering reports and other financial or engineering data included in the Registration Statement and the Prospectus. 26 EX-4.3 5 h08254exv4w3.txt FORM OF EXCHANGE NOTE Exhibit 4.3 THIS NOTE IS A GLOBAL NOTE. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY ") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. REGISTERED PRINCIPAL AMOUNT: No: 4 $350,000,000 APACHE FINANCE CANADA CORPORATION CUSIP: 03746AAC4 4.375% NOTES DUE 2015 APACHE FINANCE CANADA CORPORATION, an unlimited liability company organized under the laws of Nova Scotia, Canada (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Three Hundred Fifty Million Dollars on May 15, 2015 ("Stated Maturity") and to pay interest thereon from May 15, 2003 or from the most recent date in respect of which interest has been paid or duly provided for, on May 15 and November 15 of each year (each, an "Interest Payment Date"), commencing November 15, 2003, and at Stated Maturity or upon such other date on which the principal of this Note becomes due and payable, whether by declaration of acceleration, notice of redemption or otherwise, and including any Redemption Date or Change in Control Purchase Date (each such date, "Maturity"), at the rate of 4.375% per annum, until the principal hereof and premium, if any, hereon and any Additional Amounts (as defined below) is paid or duly made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture referred to below, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered as of the close of business on May 1 or November 1, as the case may be (whether or not a Business Day), next preceding such Interest Payment Date (each such date, a "Regular Record Date"). Any such interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the Holder of this Note on such Regular Record Date, and shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to the Holder of this Note not less than 10 days prior to such Special Record Date, or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Any interest paid on this Note shall be increased to the extent necessary to pay Additional Amounts as set forth in this Note. Payment of the principal of, and premium, if any, and interest on, or any Additional Amounts in respect of, this Note will be made at the office or agency maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the Person in whose name this Note is registered at the close of business on the related record date; provided further, that, notwithstanding anything else contained herein, if this Note is a Global Security and is held in book-entry form through the facilities of the Depository, payments on this Note will be made to the Depository or its nominee in accordance with the arrangements then in effect between the Trustee and the Depository. Reference is hereby made to the further provisions of this Note set forth on the succeeding pages hereof, which further provisions shall for all purposes have the same effect as if set forth herein. CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein, referred to in the within-mentioned Indenture. JPMorgan Chase Bank, as Trustee By: ------------------------------------- Authorized Officer -1- APACHE FINANCE CANADA CORPORATION 4.375% NOTES DUE 2015 This Note is one of a duly authorized issue of Securities of the Company issued under an Indenture, dated as of November 23, 1999 (the "Indenture"), among the Company, Apache Corporation (the "Guarantor") and JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank (the "Trustee", which term includes any successor trustee under the Indenture), designated as the 4.375% Notes due 2015 (the "Notes"). Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. All terms used in this Note and the Guarantee set forth below which are not defined herein and which are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Indenture provides for the defeasance of the Notes, the Guarantees and certain covenants in certain circumstances. This Note is unsecured as to payment of principal, premium, if any, Additional Amounts, if any, and interest, and ranks pari passu with all other unsecured unsubordinated indebtedness of the Company. Interest payments on this Note will include interest accrued to but excluding the applicable Interest Payment Date or Maturity hereof, as the case may be. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. For the purposes of this Note, if interest is calculated on the basis of a year of 360 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate (as so determined) multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. In the case where the applicable Interest Payment Date or Maturity with respect hereto, as the case may be, does not fall on a Business Day, payment of principal, premium, if any, Additional Amounts, if any, or interest otherwise payable on such 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 the Interest Payment Date or at Maturity and, unless the Company or the Guarantor default on such payment, no interest shall accrue with respect to such payment for the period from and after the Interest Payment Date or such Maturity, as the case may be, to the date of payment. "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York. If any Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note will have any right to institute any proceeding with respect to the Indenture, the Notes or the Guarantees, or for any remedy thereunder, unless (i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes, (ii) the Holders of not less than 25% in principal amount of the Outstanding Notes shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days after receipt of such written notice, request and offer of indemnity and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Notes a direction inconsistent with such request within such 60 day period; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of, premium, if any, Additional Amounts, if any, or any interest on this Note on or after the respective due dates expressed herein or to require the purchase of this Note by the Company upon the occurrence of a Change in Control in accordance with the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Securities of each series thereunder to be affected under the Indenture at any time by the Company and the Trustee -2- with the consent of the Holders of not less than 66-2/3% in aggregate principal amount of such Securities then Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of not less than a majority in principal amount of the Securities of each series thereunder at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain restrictive provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of any Note issued upon the registration of transfer hereof or in exchange for or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. Notwithstanding the foregoing, no consent of Holders shall be required to advance the Stated Maturity of the Notes as provided herein. No reference to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and any interest on, and any Additional Amounts in respect of, this Note at the times, places and rate, and in the coin or currency, herein prescribed. The Notes are issuable only in fully registered form in denominations of $1,000 and integral multiples in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of any authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of, premium, if any, any interest on, and any Additional Amounts in respect of, this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to, the Company and the Security Registrar or any transfer agent duly executed by the registered owner hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount and Stated Maturity will be issued to the designated transferee or transferees. The Notes will not be subject to any sinking fund and, except as provided in the Indenture or herein, will not be redeemable or repayable prior to their Stated Maturity. The Notes are redeemable as a whole or in part, at the Company's option at any time, at a Redemption Price equal to the greater of (i) 100 percent of their principal amount or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon and discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield plus 15 basis points, plus, in each case, accrued interest to the date of redemption. The Company will, however, pay the interest installment due on any Interest Payment Date that occurs on or before a Redemption Date to the Holders as of the close of business on the Regular Record Date immediately preceding that Interest Payment Date. "Treasury Yield" means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. "Comparable Treasury Issue" means the United States Treasury security selected by the Referenced Treasury Dealers or Dealer as having a maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four but more than one such Reference Treasury Dealer Quotations, the average of all such Quotations, or (iii) if the Trustee obtains only one such Referenced Treasury Dealer Quotation, such quotation. -3- "Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of the principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. (New York City Time) on the third Business Day preceding such Redemption Date. "Reference Treasury Dealer" means each of (i) Banc of America Securities LLC and Deutsche Bank Securities Inc. (or their respective affiliates that are Primary Treasury Dealers), and their respective successors; provided, however, that if either of the foregoing ceases being a U.S. Government securities dealer in New York City (a "Primary Treasury Dealer") the Company may substitute another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer(s) selected by the Trustee after consultation with the Company. If as a result of any change in or any amendment to the laws, regulations or published tax rulings of the "applicable taxing jurisdiction" (as hereinafter defined) affecting taxation, or any change in the official administration, application or interpretation of such laws, regulations or published tax rulings either generally or in relation to the Notes, which change or amendment becomes effective on or after the original issue date of the Notes or which change in official administration, application or interpretation shall not have been available to the public prior to such issue date, it is determined by the Company that (a) the Company would be required to pay any Additional Amounts pursuant to the Indenture or the terms of the Notes in respect of interest on the next succeeding Interest Payment Date and (b) such obligation cannot be avoided by the Company or the Guarantor taking reasonable measures available to it, the Company may, at its option, redeem all (but not less than all) of the Notes upon not less than 30 nor more than 60 days' written notice as provided in the Indenture, at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption; provided, however, that (a) no such notice of redemption may be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay such Additional Amounts were a payment then due in respect of the Notes, and (b) at the time any such redemption notice is given, such obligation to pay such Additional Amounts must remain in effect. If (a) the Company shall have on any date (the "Succession Date") consolidated with or merged into, or conveyed or transferred or leased its properties and assets as an entirety or substantially as an entirety to, any Successor which is organized under the laws of any jurisdiction other than the United States of America, any State thereof or the District of Columbia or the jurisdiction in which the Company is organized, (b) as result of any change in or any amendment to the laws, regulations or published tax rulings of such jurisdiction, or of any political subdivision or taxing authority thereof or therein, affecting taxation, or any change in the official administration, application or interpretation of such laws, regulations or published tax rulings either generally or in relation to the Notes, which change or amendment becomes effective on or after the Succession Date or which change in official administration, application or interpretation shall not have been available to the public prior to such Succession Date and is notified to the Company, such Successor would be required to pay any Successor Additional Amounts pursuant to the Indenture or the terms of the Notes in respect of interest on any Notes on the next succeeding Interest Payment Date and (c) such obligation cannot be avoided by the Company or such Successor taking reasonable measures available to it, the Company or such Successor may at its option redeem all (but not less than all) of the Notes, upon not less than 30 nor more than 60 days' written notice as provided in the Indenture, at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption; provided however, that (a) no such notice of redemption may be given earlier than 60 days prior to the earliest date on which a Successor would be obligated to pay such Successor Additional Amounts were a payment then due in respect of the Notes, and (b) at the time any such redemption notice is given, such obligation to pay such Successor Additional Amounts must remain in effect. Holders of Notes to be redeemed will receive notice thereof by first-class mail at least 30 and not more than 60 days prior to the Redemption Date, as provided in the Indenture. Unless the Company defaults in payment of the redemption price, on and after the Redemption Date interest will cease to accrue on the Notes or portions thereof called for redemption. All payments of, or in respect of, principal of and premium, if any, and interest on this Note shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, levies, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Company is incorporated or resident (or deemed for -4- tax purposes to be resident) (the "applicable taxing jurisdiction"), unless such taxes, duties, levies, assessments or governmental charges are required by the applicable taxing jurisdiction or any such subdivision or authority to be withheld or deducted. In that event, the Company will pay by way of additional interest such additional amounts of, or in respect of, principal and premium, if any, of and interest ("Additional Amounts") as will result (after deduction of such taxes, duties, levies, assessments or governmental charges and any additional taxes, duties, levies, assessments or governmental charges payable in respect of such Additional Amounts) in the payment to the Holder of this Note of the amounts which would have been payable in respect of this Note had no such withholding or deduction been required, except that no Additional Amounts shall be so payable for or on account of: (a) any tax, duty, levy, assessment or other governmental charge which would not have been imposed but for the fact that such Holder: (i) was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the applicable taxing jurisdiction or otherwise had some connection with the applicable taxing jurisdiction other than the mere ownership of this Note; (ii) presented (if presentation is required) this Note for payment in the applicable taxing jurisdiction, unless this Note could not have been presented for payment elsewhere; (iii) presented (if presentation is required) this Note, as the case may be, more than 30 days after the date on which the payment in respect of this Note first became due and payable or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amounts; if it had presented such Note for payment on any days within such period of 30 days; (iv) is not dealing with the Company, directly or indirectly, on an arm's-length basis; or (v) entered into or participated in a scheme to avoid Canadian withholding tax, being a scheme which the Company was neither a party to nor participated in; (b) any estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge; (c) any tax, assessment or other governmental charge which is payable otherwise than by withholding or deduction from payments of, or in respect of, principal of, premium, if any, or interest on this Note; (d) any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure to comply by the Holder or the beneficial owner of this Note with a request of the Company addressed to the Holder (i) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (ii) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (i) or (ii), is required or imposed by a statute, treaty, regulation or administrative practice of the applicable taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge; or (e) any combination of items (a), (b), (c) and (d); nor shall Additional Amounts be paid with respect to any payment of the principal of or premium, if any, or interest on this Note to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the applicable taxing jurisdiction to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts had it been the Holder of this Note. The payment of principal of, or premium, if any, or interest on, or in respect of, this Note shall be deemed to include the payment of Additional Amounts provided for in the Indenture or herein to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the Indenture or this Note. -5- Subject to the terms and conditions of the Indenture, if any Change in Control occurs prior to the Stated Maturity of the Notes, the Company shall, at the option of the Holders thereof, purchase all Notes for which a Change in Control Purchase Notice shall have been delivered as provided in the Indenture and not withdrawn, by a date which shall be 35 Business Days after the occurrence of such Change in Control, at a Change in Control Purchase Price equal to 100% of the principal amount thereof plus accrued interest to the Change in Control Purchase Date, which Change in Control Purchase Price shall be paid in cash. Holders have the right to withdraw any Change in Control Purchase Notice by delivering to the paying agent a written notice of withdrawal in accordance with the provisions of the Indenture. If cash sufficient to pay the Change in Control Purchase Price of all Notes or portions thereof to be purchased on the Change in Control Purchase Date is deposited with the Trustee on the Change in Control Purchase Date, interest shall cease to accrue on such Notes (or portions thereof) and on and after the Change in Control Purchase Date the Holders thereof shall have no other rights as such (other than the right to receive the Change in Control Purchase Price upon surrender of such Notes). Subject to the terms of the Indenture, prior to due presentment of this Note for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue, and neither the Company, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary. No service charge shall be made for any registration of transfer or exchange of this Note, but, subject to certain limitations set forth in the Indenture, the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York. This Note shall not be valid or become obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been executed by the Trustee. IN WITNESS WHEREOF, APACHE FINANCE CANADA CORPORATION has caused this instrument to be duly executed under its corporate seal. APACHE FINANCE CANADA CORPORATION [SEAL] By: ------------------------------------- Name: Title: Attest: By: -------------------------------- Name: Cheri L. Peper Title: Corporate Secretary Date: -6- GUARANTEE For value received, Apache Corporation, a corporation organized under the laws of the State of Delaware (herein called the "Guarantor," which term includes any successor corporation under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby irrevocably and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee on behalf of the Trustee and such Holder the due and punctual payment of the principal of and premium, if any, and interest on, and any Additional Amounts with respect to, such Security, and any other amount due and payable pursuant to the terms of such Security or Indenture or payments referred to therein, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or repurchase or otherwise, according to the terms of such Security and of the Indenture referred to therein. In case of the failure of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of Nova Scotia, Canada (herein called the "Company," which term includes any successor corporation under such Indenture), punctually to make any such payment of principal or premium, if any, or interest on, or any Additional Amounts with respect to such Security, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or repurchase or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by strict and complete performance of the obligations contained in such Security and this Guarantee. The Guarantor hereby agrees that, in the event of a default in payment of principal or premium, if any, or interest on, or any Additional Amounts with respect to such Security, or default in any payment referred to therein, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, on the terms and conditions set forth in such Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Company in respect of any amounts paid to such Holder by the Guarantor on account of such Security pursuant to the provisions of this Guarantee or such Indenture; 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, and premium, if any, and interest on, and any Additional Amounts required with respect to Securities issued under such Indenture shall have been paid in full. No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to the Security upon which this Guarantee is endorsed. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security upon which this Guarantee is endorsed shall have been manually executed by or on behalf of the Trustee under the Indenture. All terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in such Indenture. This Guarantee shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of the State of New York. -7- This Guarantee is an unsecured obligation of the Guarantor, and ranks pari passu with all other unsubordinated indebtedness of the Guarantor. Reference is made to the Indenture, including Article Sixteen thereof, for further provisions with respect to this Guarantee. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed under its corporate seal and dated the date of the Security upon which this Guarantee is endorsed. APACHE CORPORATION [SEAL] By: ------------------------------------ Name: Title: Attest: By: -------------------------------- Name: Cheri L. Peper Title: Corporate Secretary -8- ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or other identifying number of assignee (please print or type name and address of assignee) the within Security and all rights thereunder and does hereby irrevocably constitute and appoint the aforesaid assignee attorney to transfer the within Security on the books kept for registration thereof, with full power of substitution in the premises. Dated: Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever. ---------------------------------------- Signature Signature Guarantee: ---------------------------------------- (Signature must be guaranteed) Signature - -------------------------------------------------------------------------------- NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Security in every particular, without alteration or enlargement or any change whatever. When assignment is made by a guardian, trustee, executor or administrator, an officer of a corporation, or anyone in a representative capacity, proof of his or her authority to act must accompany the Security. The signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee. -9- EX-5.1.1 6 h08254exv5w1w1.txt OPINION OF CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & MARTIN A PARTNERSHIP OF PROFESSIONAL CORPORATIONS ATTORNEYS AT LAW 1200 SMITH STREET, SUITE 1400 HOUSTON, TEXAS 77002-4496 (713) 658-1818 (800) 342-5829 (713) 658-2553 (FAX) HOUSTON www.chamberlainlaw.com ATLANTA EXHIBIT 5.1.1 August 13, 2003 Apache Corporation Apache Finance Canada Corporation c/o Apache Corporation 2000 Post Oak Blvd. Suite 100 Houston, Texas 77056-4400 Ladies and Gentlemen: We have acted as counsel in connection with the preparation and filing with the Securities and Exchange Commission of a registration statement on Form S-4 (the "Registration Statement") in connection with the proposed issuance of up to $350,000,000 aggregate principal amount of the 4.375% Notes due 2015 (the "Exchange Notes") of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia (the "Company"), and the guarantees of the Exchange Notes (the "Exchange Guarantees") by Apache Corporation, a Delaware corporation (the "Guarantor"), each registered under the Securities Act of 1933, as amended (the "Act"), in exchange for up to $350,000,000 aggregate principal amount of the Company's outstanding 4.375% Notes due 2015 (the "Outstanding Notes") and the related guarantees thereof by the Guarantor (the "Outstanding Guarantees"). The Exchange Notes and the Exchange Guarantees are issuable under an Indenture, dated as of November 23, 1999 (the "Indenture"), among the Company, the Guarantor and JPMorgan Chase Bank, as trustee (the "Trustee"). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Registration Statement. In connection herewith, we have examined the Registration Statement and such other documents and instruments as we have deemed necessary or appropriate for the expression of the opinions contained herein. Apache Corporation Apache Finance Canada Corporation August 13, 2003 Page 2 of 2 In our examination, we have assumed the authenticity and completeness of all records, certificates and other instruments represented to us to be originals, the conformity to original documents of all records, certificates, and other instruments submitted to me as copies, the authenticity and completeness of the originals of those records, certificates and other instruments submitted to me as copies and the correctness of all statements of fact contained in all records, certificates and other instruments that we have examined. Based on the foregoing and subject to the limitations set forth herein, we are of the opinion that: 1. When the Exchange Notes have been duly executed and delivered by the Company, authenticated by the Trustee and delivered against surrender and cancellation of a like aggregate principal amount of the Outstanding Notes, as contemplated in the Registration Rights Agreement among the Company, the Guarantor and the initial purchasers named therein (the "Registration Rights Agreement"), and as described in the prospectus included in the Registration Statement, the Exchange Notes will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. 2. The Exchange Guarantees have been duly authorized by the Guarantor, and when (a) the Exchange Notes have been duly executed and delivered by the Company, authenticated by the Trustee and delivered against surrender and cancellation of a like aggregate principal amount of the Outstanding Notes and related Outstanding Guarantees, as contemplated by the Registration Rights Agreement and as described in the prospectus included in the Registration Statement, and (b) the Exchange Guarantees have been duly executed and delivered by the Guarantor, the Exchange Guarantees will constitute legal, valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with their terms. The opinions expressed above regarding validity, binding effect and enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and enforceability may be limited by general equitable principles. We call to your attention that the making of payments may be subject to governmental authority to limit, delay or prohibit the making of payments outside the United States. The opinions set forth above are limited in all respects to matters of Texas law and to the Delaware General Corporation Law. With your consent, we have relied solely on the opinion of McInnes Cooper, filed as Exhibit 5.2 to the Registration Statement, as to matters governed by the laws of Canada and the Province of Nova Scotia. In rendering the opinions expressed above regarding the enforceability of the Exchange Notes and the Exchange Guarantees, with your consent we have relied solely on the opinions of Sidley Austin Brown & Wood llp, dated the date of this letter and filed as Exhibit 5.1.2 to the Registration Statement, to the extent such opinions concern the laws of the State of New York. We have not made an independent Apache Corporation Apache Finance Canada Corporation August 13, 2003 Page 3 of 3 examination of the laws of Canada, the Province of Nova Scotia or the State of New York, respectively. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption "Legal Matters" in the Prospectus included as part of the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & MARTIN EX-5.1.2 7 h08254exv5w1w2.txt OPINION OF SIDLEY, AUSTIN, BROWN & WOOD, LLP Exhibit 5.1.2 SIDLEY AUSTIN BROWN & WOOD LLP CHICAGO 787 SEVENTH AVENUE BEIJING NEW YORK, NEW YORK 10019 DALLAS TELEPHONE 212 839 5300 GENEVA FACSIMILE 212 839 5599 LOS ANGELES www.sidley.com HONG KONG SAN FRANCISCO FOUNDED 1866 LONDON WASHINGTON, D.C. SHANGHAI SINGAPORE TOKYO August 13, 2003 Apache Finance Canada Corporation Apache Corporation c/o Apache Corporation 2000 Post Oak Blvd. Houston, Texas 77056-4400 Ladies and Gentlemen: We have acted as special counsel as to the laws of the State of New York in connection with the preparation and filing with the Securities and Exchange Commission of a registration statement on Form S-4 (the "Registration Statement") in connection with the proposed issuance of up to $350,000,000 aggregate principal amount of the 4.375% Notes due 2015 (the "Exchange Notes") of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia (the "Company"), and the guarantees of the Exchange Notes (the "Exchange Guarantees") by Apache Corporation, a Delaware corporation (the "Guarantor"), each registered under the Securities Act of 1933, as amended (the "Act"), in exchange for up to $350,000,000 aggregate principal amount of the Company's outstanding 4.375% Notes due 2015 (the "Outstanding Notes") and the related guarantees thereof by the Guarantor (the "Outstanding Guarantees"). The Exchange Notes and the Exchange Guarantees are issuable under an Indenture, dated as of November 23, 1999 (the "Indenture"), among the Company, the Guarantor and JPMorgan Chase Bank, as trustee (the "Trustee"). As special counsel as to the laws of the State of New York, we have examined the Registration Statement and such other documents and instruments as we have deemed necessary or appropriate for the expression of the opinions contained herein. In our examination, we have assumed the authenticity and completeness of all records, certificates and other instruments represented to us to be originals, the conformity to original documents of all records, certificates, and other instruments submitted to us as copies, the authenticity and completeness of the originals of those records, certificates and other instruments submitted to us as copies and the correctness of all statements of fact contained in all records, certificates and other instruments that we have examined. Based on the foregoing and subject to the limitations set forth herein, we are of the opinion that: 1. When the Exchange Notes have been duly executed and delivered by the Company, authenticated by the Trustee and delivered against surrender and cancellation of a like aggregate principal amount of the Outstanding Notes, as contemplated in the Registration Rights Agreement among the Company, the Guarantor and the initial purchasers named therein (the "Registration Rights Agreement"), and as described in the prospectus included in the Registration Statement, the Exchange Notes will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. 2. When (a) the Exchange Notes have been duly executed and delivered by the Company, authenticated by the Trustee and delivered against surrender and cancellation of a like aggregate principal amount of the Outstanding Notes and related Outstanding Guarantees, as contemplated by the Registration Rights Agreement and as described in the prospectus included in the Registration Statement, and (b) the Exchange Guarantees have been duly executed and delivered by the Guarantor, the Exchange Guarantees will constitute legal, valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with their terms. The opinions expressed above regarding validity, binding effect and enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and enforceability may be limited by general equitable principles. We call to your attention that the making of payments may be subject to governmental authority to limit, delay or prohibit the making of payments outside the United States. We are members of the bar of the State of New York and the foregoing opinions are limited to matters arising under the laws of the State of New York, and we express no opinion with respect to matters arising under the laws of any other jurisdiction. In rendering the opinions expressed above we have, with your consent, relied solely on the opinions of (i) Chamberlain, Hrdlicka, White, Williams & Martin, filed as Exhibit 5.1.1 to the Registration Statement, as to due authorization of the Exchange Guarantees by the Guarantor and (ii) McInnes Cooper, filed as Exhibit 5.2 to the Registration Statement, as to matters governed by the laws of Canada and the Province of Nova Scotia, including due authorization of the Exchange Notes by the Company. Chamberlain, Hrdlicka, White, Williams & Martin may rely on this opinion as to matters of New York law in rendering their opinion being filed as an exhibit to the Registration Statement. We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ SIDLEY AUSTIN BROWN & WOOD LLP 2 EX-5.2 8 h08254exv5w2.txt OPINION OF MCINNES COOPER EXHIBIT 5.2 McINNES COOPER - -------------------------------------------------------------------------------- BARRISTERS SOLICITORS & TRADE MARK AGENTS August 13, 2003 Summit Place 1601 Lower Water Street Post Office Box 730 Halifax, Nova Scotia Canada B3J 2V1 T. 902 425 6500 F. 902 425 6350 www.mcinnescooper.com Apache Corporation 2000 Post Oak Boulevard, Suite 100 Houston, TX 77056-4400 Ladies & Gentlemen: Re: Form S-4 Registration Statement ------------------------------------ We have acted as Nova Scotia counsel to Apache Corporation (the "Company") in connection with the preparation of a Registration Statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act") relating to the proposed issuance of $350,000,000 aggregate principal amount of 4.375% Notes due 2015 (the "Exchange Securities") of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia, Canada (the "Issuer"), to be issued under that certain Indenture ("Indenture"), dated as of November 23, 1999, by and between the Issuer, the Company and JP Morgan Chase Bank, formerly known as The Chase Manhattan Bank, as Trustee, in connection with the exchange offer set forth in the Registration Statement, pursuant to which the Exchange Securities will be issued for a like principal amount of the Issuer's outstanding 4.375% Notes due 2015. We understand that the Exchange Securities issued by the Issuer will be guaranteed by the Company pursuant to a guarantee provided for under the Indenture. We have examined: (i) the Registration Statement covering the Exchange Securities which we understand has been filed with the United States Securities and Exchange Commission; (ii) an executed copy of the Indenture; McINNES COOPER Page 2 BH-403 August 13, 2003 (iii) the Memorandum of Association and Articles of Association of the Issuer as contained in the minute book of the Issuer made available for our inspection on the date hereof, which we assume is complete and accurate in all respects; (iv) a resolution signed by the directors of the Issuer on October 29, 1999 with respect to, inter alia, the entering into of the Indenture, which we assume continues in full force and effect unamended as of the date hereof; (v) a resolution signed by the directors of the Issuer on May 8, 2003, with respect to, inter alia, the issuance of the Exchange Securities, which we assume continues in full force and effect unamended as of the date hereof; and (vi) a certificate of status dated August 11, 2003 issued in respect of the Issuer by the Registrar of Joint Stock Companies for the Province of Nova Scotia; and such other documents and instruments as we have deemed necessary or appropriate for the expression of the opinion contained herein. For purposes of giving this opinion, we have assumed the following: (a) the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as copies; (b) such documents are within the capacity and powers of, and have been validly authorized, executed and delivered by and are binding on, the parties to them other than the Issuer; (c) insofar as any obligation under any document is to be performed in any jurisdiction other than in the Province of Nova Scotia, its performance will not be illegal or unenforceable under the law of that jurisdiction; (d) each such document has been duly executed and delivered and constitutes or will constitute legal, valid and binding obligations of the parties under their respective governing laws, enforceable in competent courts of such jurisdictions; and (e) the information provided by government officials, agencies and authorities is complete and accurate. McINNIS COOPER Page 3 BH-403 August 13, 2003 Based upon the foregoing and subject to the limitations set forth below, it is our opinion that, under current law, the Issuer has the corporate power and authority to issue the Exchange Securities and the Exchange Securities have been duly authorized by the Issuer. Our opinion herein is limited solely to the laws of the Province of Nova Scotia and the federal laws of Canada applicable therein and we express no opinion herein concerning the law of any other jurisdiction. We express no opinion as to any matters other than as expressly set forth above and no opinion is to be otherwise implied or inferred herefrom. Our opinion herein is rendered solely for your benefit in connection with the transaction contemplated herein. Our opinion herein may not be used or relied on by any third party, filed with a government agency, quoted, cited or otherwise referred to without our prior written consent, except that each of Chamberlain, Hrdlicka, White, Williams & Martin and Sidley Austin Brown & Wood LLP, may rely on this letter and the opinion expressed herein as if each of them were named as an addressee of this letter. We hereby consent to the filing of this opinion letter as Exhibit 5.2 to the Registration Statement and to the reference to our name under the caption "Legal Matters" in the prospectus forming part of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. Yours very truly, /s/ McInnes Cooper EX-12.1 9 h08254exv12w1.txt COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1 APACHE CORPORATION STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, ---------------------- 2003 2002 2002 2001 2000 1999 1998 ---------- ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS Pretax income (loss) from continuing operations before preferred interests of subsidiaries.......................... $1,000,549 $ 372,778 $ 915,194 $1,206,863 $1,203,681 $ 344,573 $ (187,563) Add: Fixed charges excluding capitalized interest and preferred interest requirements of consolidated subsidiaries............................. 61,785 65,041 128,730 134,484 116,190 90,398 78,728 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Adjusted Earnings.......................... $1,062,334 $ 437,819 $1,043,924 $1,341,347 $1,319,871 $ 434,971 $ (108,835) ========== ========== ========== ========== ========== ========== ========== FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Interest expense including capitalized interest................................. $ 79,124 $ 78,333 $ 155,667 $ 178,915 $ 168,121 $ 132,986 $ 119,703 Amortization of debt expense............... 1,067 800 1,859 2,460 2,726 4,854 4,496 Interest component of lease rental expenditures (1)......................... 5,444 6,372 11,895 9,858 7,343 5,789 3,808 Preferred interest requirements of consolidated subsidiaries (2)............ 8,404 10,525 19,581 8,608 -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Fixed charges.............................. 94,039 96,030 189,002 199,841 178,190 143,629 128,007 Preferred stock dividend requirements (3)......................... 5,071 12,815 17,540 32,495 33,386 24,788 2,905 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Combined Fixed Charges and Preferred Stock Dividends.......................... $ 99,110 $ 108,845 $ 206,542 $ 232,336 $ 211,576 $ 168,417 $ 130,912 ========== ========== ========== ========== ========== ========== ========== Ratio of Earnings to Fixed Charges........... 11.30 4.56 5.52 6.71 7.41 3.03 --(4) ========== ========== ========== ========== ========== ========== ========== Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends...... 10.72 4.02 5.05 5.77 6.24 2.58 --(4) ========== ========== ========== ========== ========== ========== ==========
(1) Represents the portion of rental expense assumed to be attributable to interest factors of related rental obligations determined at interest rates appropriate for the period during which the rental obligations were incurred. Approximately 32 to 34 percent applies for all periods presented. (2) The Company does not receive a tax benefit for a portion of its preferred interests of consolidated subsidiaries. As a result, these amounts represent the pre-tax earnings that would be required to cover preferred interests requirements of consolidated subsidiaries. (3) The Company does not receive a tax benefit for its preferred stock dividends. As a result, this amount represents the pre-tax earnings that would be required to cover its preferred stock dividends. (4) Earnings in 1998 were inadequate to cover fixed charges and combined fixed charges and preferred stock dividends by $237 million and $240 million, respectively. EX-23.1 10 h08254exv23w1.txt CONSENT OF ERNST & YOUNG LLP, HOUSTON, TEXAS EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-4) and related Prospectus of Apache Corporation for the registration of $350 million of debt securities and to the incorporation by reference therein of our report dated March 14, 2003, with respect to the consolidated financial statements of Apache Corporation included in its Annual Report (Form 10-K) for the year ended December 31, 2002, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Houston, Texas August 13, 2003 EX-23.6 11 h08254exv23w6.txt CONSENT OF RYDER SCOTT COMPANY PETROLEUM ENGINEERS EXHIBIT 23.6 (RYDER SCOTT COMPANY LETTERHEAD) CONSENT OF RYDER SCOTT COMPANY PETROLEUM CONSULTANTS As independent petroleum engineers, we hereby consent to the incorporation by reference in this registration statement of our Firm's review of the proved oil and gas reserve quantities of Apache Corporation as of January 1, 2003, and to all references to our Firm included in this registration statement. /s/ RYDER SCOTT COMPANY, L.P. ------------------------------- RYDER SCOTT COMPANY, L.P. Houston, Texas August 12, 2003 EX-25.1 12 h08254exv25w1.txt FORM T-1 STATEMENT OF ELIGIBILITY Exhibit 25.1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- APACHE FINANCE CANADA CORPORATION (Exact name of obligor as specified in its charter) NOVA SCOTIA 98-0216251 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 700 - 9TH AVE. SW, SUITE 1000 CALGARY, ALBERTA, CANADA T2P 3V4 (Address of principal executive offices) (Zip Code) ---------------------------------------- DEBT SECURITIES (Title of the indenture securities) ================================================================================ GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001 in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, 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 12th day of August, 2003. JPMORGAN CHASE BANK By /s/ William G. Keenan ---------------------------------- William G. Keenan Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2003, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ......................................................... $ 21,415 Interest-bearing balances ................................................. 6,882 Securities: Held to maturity securities .................................................... 334 Available for sale securities .................................................. 80,076 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices .................................... 14,044 Securities purchased under agreements to resell ........................... 73,060 Loans and lease financing receivables: Loans and leases held for sale ............................................ 25,832 Loans and leases, net of unearned income .............. $161,345 Less: Allowance for loan and lease losses ............. 3,823 Loans and leases, net of unearned income and allowance ................................................................. 157,522 Trading Assets ................................................................. 189,427 Premises and fixed assets (including capitalized leases) ....................... 6,186 Other real estate owned ........................................................ 131 Investments in unconsolidated subsidiaries and associated companies ...................................................... 691 Customers' liability to this bank on acceptances outstanding ............................................................... 225 Intangible assets Goodwill ............................................................... 2,180 Other Intangible assets ................................................ 3,314 Other assets ................................................................... 40,377 TOTAL ASSETS ................................................................... $621,696 ========
LIABILITIES Deposits In domestic offices ....................................................... $174,351 Noninterest-bearing .......................... $ 70,991 Interest-bearing ............................. 103,360 In foreign offices, Edge and Agreement subsidiaries and IBF's .................................................... 125,789 Noninterest-bearing .......................... $ 7,531 Interest-bearing ............................. 118,258 Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased in domestic offices ............................... 5,929 Securities sold under agreements to repurchase ............................ 113,903 Trading liabilities ............................................................ 116,329 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ................................. 10,758 Bank's liability on acceptances executed and outstanding ....................... 225 Subordinated notes and debentures .............................................. 8,306 Other liabilities .............................................................. 29,735 TOTAL LIABILITIES .............................................................. 585,325 Minority Interest in consolidated subsidiaries ................................. 97 EQUITY CAPITAL Perpetual preferred stock and related surplus .................................. 0 Common stock ................................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....................... 16,304 Retained earnings .............................................................. 17,228 Accumulated other comprehensive income ......................................... 957 Other equity capital components ................................................ 0 TOTAL EQUITY CAPITAL ........................................................... 36,274 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ....................... $621,696 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this 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 appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HELENE L. KAPLAN ) DIRECTORS WILLIAM H. GRAY, III ) EX-25.2 13 h08254exv25w2.txt STMT OF ELIGIBILITY & QUALIFICATION ON FORM T-1 EXHIBIT 25.2 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ------------------------- APACHE CORPORATION (Exact name of obligor as specified in its charter) DELAWARE 41-0747868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) ONE POST OAK CENTRAL 2000 POST OAK BOULEVARD, SUITE 100 HOUSTON, TEXAS 77056 (Address of principal executive offices) (Zip Code) ------------------------- GUARANTEE OF DEBT SECURITIES OF APACHE FINANCE CANADA CORPORATION (Title of the indenture securities) GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001 in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, 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 12th day of August, 2003. JPMORGAN CHASE BANK By /s/ William G. Keenan ------------------------------- William G. Keenan Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 2003, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ......................................................... $ 21,415 Interest-bearing balances ................................................. 6,882 Securities: Held to maturity securities .................................................... 334 Available for sale securities .................................................. 80,076 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices .................................... 14,044 Securities purchased under agreements to resell ........................... 73,060 Loans and lease financing receivables: Loans and leases held for sale ............................................ 25,832 Loans and leases, net of unearned income .............. $161,345 Less: Allowance for loan and lease losses ............. 3,823 Loans and leases, net of unearned income and allowance ................................................................. 157,522 Trading Assets ................................................................. 189,427 Premises and fixed assets (including capitalized leases) ....................... 6,186 Other real estate owned ........................................................ 131 Investments in unconsolidated subsidiaries and associated companies ...................................................... 691 Customers' liability to this bank on acceptances outstanding ............................................................... 225 Intangible assets Goodwill ............................................................... 2,180 Other Intangible assets ................................................ 3,314 Other assets ................................................................... 40,377 TOTAL ASSETS ................................................................... $621,696 ========
LIABILITIES Deposits In domestic offices ....................................................... $174,351 Noninterest-bearing .......................... $ 70,991 Interest-bearing ............................. 103,360 In foreign offices, Edge and Agreement subsidiaries and IBF's .................................................... 125,789 Noninterest-bearing .......................... $ 7,531 Interest-bearing ............................. 118,258 Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased in domestic offices ............................... 5,929 Securities sold under agreements to repurchase ............................ 113,903 Trading liabilities ............................................................ 116,329 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ................................. 10,758 Bank's liability on acceptances executed and outstanding ....................... 225 Subordinated notes and debentures .............................................. 8,306 Other liabilities .............................................................. 29,735 TOTAL LIABILITIES .............................................................. 585,325 Minority Interest in consolidated subsidiaries ................................. 97 EQUITY CAPITAL Perpetual preferred stock and related surplus .................................. 0 Common stock ................................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ....................... 16,304 Retained earnings .............................................................. 17,228 Accumulated other comprehensive income ......................................... 957 Other equity capital components ................................................ 0 TOTAL EQUITY CAPITAL ........................................................... 36,274 -------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ....................... $621,696 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this 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 appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HELENE L. KAPLAN ) DIRECTORS WILLIAM H. GRAY, III ) EX-99.1 14 h08254exv99w1.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT 99.1 LETTER OF TRANSMITTAL APACHE FINANCE CANADA CORPORATION OFFER TO EXCHANGE 4.375% NOTES DUE 2015 FULLY AND UNCONDITIONALLY GUARANTEED BY APACHE CORPORATION, FOR ANY AND ALL OUTSTANDING 4.375% NOTES DUE 2015 FULLY AND UNCONDITIONALLY GUARANTEED BY APACHE CORPORATION, PURSUANT TO THE PROSPECTUS DATED , 2003 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2003, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. JPMORGAN CHASE BANK, as Exchange Agent By Mail: By Hand or by Overnight By Facsimile: (Registered or Certified Mail Courier: (For Eligible Institutions is recommended) ITS Bond Events only) ITS Bond Events 2001 Bryan Street, 9th Floor ITS Bond Events P.O. Box 2320 Dallas, TX 75201 Facsimile No.: Dallas, TX 75221 Attention: Frank Ivins (214) 468-6494 Attention: Frank Ivins Attention: Frank Ivins To confirm facsimile: (214) 468-6464 Telephone Inquiries: (800) 275-2048
Delivery of this Letter of Transmittal to an address other than as set forth above, or transmission of instructions other than as set forth above, will not constitute a valid delivery. This Letter of Transmittal is to be used by a Holder of Outstanding Notes (i) if certificates representing Outstanding Notes are to be forwarded herewith, (ii) if delivery of Outstanding Notes is to be made by book-entry transfer to the Exchange Agent's account at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the procedures set forth in the section of the Prospectus entitled "The Exchange Offer -- Procedures for Tendering Outstanding Notes," unless an agent's message is transmitted in lieu hereof, or (iii) if a tender has previously been made pursuant to the guaranteed delivery procedures in the section of the Prospectus entitled "The Exchange Offer -- Guaranteed Delivery Procedures," unless an agent's message is transmitted in lieu hereof. Any beneficial owner whose Outstanding Notes are held in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such Holder of Outstanding Notes promptly and instruct such Holder of Outstanding Notes to tender on behalf of the beneficial owner. If such beneficial owner wishes to tender on such owner's own behalf, such beneficial owner must, prior to completing and executing this Letter of Transmittal and delivering its Outstanding Notes, either make appropriate arrangements to record ownership of the Outstanding Notes in such beneficial owner's name or obtain a properly completed power of attorney from the Holder of Outstanding Notes. The transfer of record ownership may take considerable time. In order to properly complete this Letter of Transmittal, a Holder of Outstanding Notes must (i) complete columns (1) through (3) in the box entitled "Description of Outstanding Notes," (ii) if appropriate, check and complete the boxes relating to book-entry transfer, guaranteed delivery, "Special Issuance Instructions" and "Special Delivery Instructions," and (iii) sign the Letter of Transmittal by completing the box entitled "Holder(s) Sign Here." If only columns (1) through (3) of the box entitled "Description of Outstanding Notes" are completed, such holder of Outstanding Notes will have tendered for exchange all Outstanding Notes listed in column (3) below. If a Holder of Outstanding Notes wishes to tender for exchange less than all of such Outstanding Notes, column (4) must be completed in full. In such case, such Holder of Outstanding Notes should refer to Instruction 5. Each Holder of Outstanding Notes should carefully read the detailed instructions below prior to completing the Letter of Transmittal. Holders of Outstanding Notes who desire to tender their Outstanding Notes for exchange and (i) whose Outstanding Notes are not immediately available, (ii) who cannot deliver their Outstanding Notes and all other documents required hereby to the Exchange Agent prior to the Expiration Date, or (iii) who cannot complete the procedures for book-entry transfer on a timely basis, may tender their Outstanding Notes pursuant to the guaranteed delivery procedures set forth in the section of the Prospectus entitled "The Exchange Offer -- Guaranteed Delivery Procedures." We refer you to Instruction 2. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. THE UNDERSIGNED, BY COMPLETING THE BOX BELOW ENTITLED "DESCRIPTION OF OUTSTANDING NOTES" AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED OUTSTANDING NOTES AS SET FORTH IN SUCH BOX. List below the Outstanding Notes to which this Letter of Transmittal relates. We also refer you to Instruction 3. 2
- ----------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OUTSTANDING NOTES - ----------------------------------------------------------------------------------------------------------------------------- (1) (2) (3) (4) - ----------------------------------------------------------------------------------------------------------------------------- AGGREGATE PRINCIPAL AMOUNT REPRESENTED BY PRINCIPAL NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE OUTSTANDING AMOUNT (PLEASE FILL-IN, IF BLANK) NUMBER(S)(A) NOTES(B) TENDERED(C) - ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- Total: - ----------------------------------------------------------------- (A) Need not be completed by book-entry holders. (B) Unless otherwise indicated in this column, the holder will be deemed to have tendered the full aggregate principal amount represented by such Outstanding Notes. (C) The minimum tender is $1,000 principal amount of Outstanding Notes. All other tenders must be in integral multiples of $1,000. - -----------------------------------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: --------------------------------------------------------------------------- DTC Account Number: --------------------------------------------------------------------------- Transaction Code Number: --------------------------------------------------------------------------- By crediting Outstanding Notes to the Exchange Agent's account at DTC in accordance with DTC's Automated Tender Offer Program ("ATOP") and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting an Agent's Message to the Exchange Agent in which the Holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of this Letter of Transmittal, the participant in ATOP confirms, on behalf of itself and the beneficial owners of such Outstanding Notes, all provisions of this Letter of Transmittal applicable to it and such beneficial owner as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. [ ] CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Registered Holder: --------------------------------------------------------------------------- Window Ticket Number (if any): --------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: --------------------------------------------------------------------------- Name of Institution Which Guaranteed Delivery: --------------------------------------------------------------------------- 3 If Delivered by Book-Entry Transfer, Complete the Following: DTC Account Number: --------------------------------------------------------------------------- Transaction Code Number: --------------------------------------------------------------------------- [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND ANY AMENDMENTS OR SUPPLEMENTS THERETO. (UNLESS OTHERWISE SPECIFIED, 10 ADDITIONAL COPIES WILL BE FURNISHED.) Name: --------------------------------------------------------------------------- Address: --------------------------------------------------------------------------- If the undersigned is not a broker-dealer, the undersigned represents that it will acquire the Exchange Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes and it has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as result of market-making activities or other trading activities (other than Outstanding Notes acquired directly from the Company), it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Any holder who is an "affiliate" of the Company or who has an arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who purchased Outstanding Notes from the Company to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act. Unless otherwise indicated in "Special Issuance Instructions" below, the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) will be issued in the name of the undersigned or, in the case of a book-entry delivery of Outstanding Notes, the account indicated below maintained at DTC will be credited. Similarly, unless otherwise indicated in "Special Delivery Instructions" below, the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) will be sent to the undersigned at the address shown in "Description of Outstanding Notes" above. 4 SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 2, 6 AND 8) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal below or if Outstanding Notes delivered by book-entry transfer that are not for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above. Issue Exchange Notes and/or Outstanding Notes to: Name: - -------------------------------------------------------------------------------- (PLEASE TYPE OR PRINT) Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (ZIP CODE) - -------------------------------------------------------------------------------- (TAXPAYER IDENTIFICATION NO. OR SOCIAL SECURITY NO.) [ ] Credit unexchanged Outstanding Notes delivered by book-entry transfer to the DTC account set forth below. - -------------------------------------------------------------------------------- (DTC ACCOUNT) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 2, 6 AND 8) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be mailed or delivered to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal below or to such person delivered by book-entry transfer that are not for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above. Mail Exchange Notes and/or Outstanding Notes to: Name: - -------------------------------------------------------------------------------- (PLEASE TYPE OR PRINT) Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (ZIP CODE) - -------------------------------------------------------------------------------- (TAXPAYER IDENTIFICATION NO. OR SOCIAL SECURITY NO.) [ ] Credit unexchanged Outstanding Notes delivered by book-entry transfer to the DTC account set forth below. - -------------------------------------------------------------------------------- (DTC ACCOUNT) 5 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: Pursuant to the offer by Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia, Canada (the "Company"), and Apache Corporation, a Delaware corporation (the "Guarantor"), upon the terms and subject to the conditions set forth in the Prospectus dated , 2003 (as the same may be amended or supplemented from time to time, the "Prospectus") of the Company and the Guarantor, receipt of which is hereby acknowledged, and this Letter of Transmittal (the "Letter of Transmittal"), which together with the Prospectus constitutes the Company's and the Guarantor's offer (the "Exchange Offer") to exchange up to $350,000,000 aggregate principal amount of the Company's 4.375% Notes due 2015 (the "Exchange Notes") for a like principal amount of the Company's issued and outstanding 4.375% Notes due 2015 (the "Outstanding Notes"), in each case fully and unconditionally guaranteed by the Guarantor, the undersigned hereby tenders to the Company for exchange the Outstanding Notes indicated above. The undersigned is the Holder (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as a holder of a book-entry interest in the Global Notes representing Outstanding Notes) of all such Outstanding Notes and if the undersigned holds the Outstanding Notes as a nominee for the beneficial owner(s), the undersigned represents that it has received from each beneficial owner of such Outstanding Notes a duly completed and executed form of "Instruction to Registered Holder and/or Book-Entry Transfer Participant from Beneficial Owner" accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal. By executing this Letter of Transmittal and subject to and effective upon acceptance for exchange of all or any portion of the Outstanding Notes tendered for exchange herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned will have irrevocably sold, assigned, transferred and exchanged, to or upon the order of the Company, all right, title and interest in, to and under all of the Outstanding Notes tendered for exchange hereby, and hereby will have irrevocably appointed the Exchange Agent as the true and lawful agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as agent of the Company in connection with the Exchange Offer) of such holder of Outstanding Notes with respect to such Outstanding Notes, with full power of substitution, subject only to the right of withdrawal described in the Prospectus, to (i) deliver certificates representing such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by DTC (together, in any such case, with all accompanying evidences of transfer and authenticity), to or upon the order of the Company, (ii) present and deliver such Outstanding Notes for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights and incidents of beneficial ownership with respect to such Outstanding Notes, all in accordance with the terms and conditions of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest. The undersigned hereby represents and warrants that (i) the undersigned has full power and authority to tender, exchange, assign and transfer the Outstanding Notes tendered hereby and (ii) that when such Outstanding Notes are accepted for exchange by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims or proxies. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Outstanding Notes tendered for exchange hereby. The undersigned will comply with its obligations under the Registration Rights Agreement and agrees to all of the terms of the Exchange Offer. By tendering Outstanding Notes in the Exchange Offer, the undersigned holder represents to the Company that (i) the Exchange Notes to be acquired by the undersigned in exchange for the Outstanding 6 Notes tendered hereby are being acquired in the ordinary course of business, (ii) the undersigned has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act of 1933, as amended (the "Securities Act")) of such Exchange Notes, (iii) the undersigned is not an "affiliate," as defined in Rule 405 under the Securities Act, of the Company or, if it is an affiliate, such holder of Outstanding Notes will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) the undersigned, if it is not a broker-dealer, represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes, and (v) the undersigned, if it is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of Section 2(a)(11) of the Securities Act. The Company has agreed that, for a period of 90 days after the Expiration Date, the Company will make the Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. For purposes of the Exchange Offer, the Company will be deemed to have accepted properly tendered Outstanding Notes, when and if the Company gives oral (promptly confirmed in writing) or written notice of the acceptance to the Exchange Agent. Tenders of Outstanding Notes for exchange may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. We refer you to the section in the Prospectus entitled "The Exchange Offer -- Withdrawal Rights." The undersigned acknowledges that the Company's acceptance of Outstanding Notes validly tendered for exchange pursuant to any one of the procedures described in the section of the Prospectus entitled "The Exchange Offer -- Procedures for Tendering" and in the instructions hereto will constitute a binding agreement between the undersigned, the Company upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" above, the undersigned hereby directs that the Exchange Notes be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Outstanding Notes, that such Exchange Notes be credited to the account indicated above maintained at the Book-Entry Transfer Facility. If applicable, substitute certificates representing Outstanding Notes not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Outstanding Notes, will be credited to the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under "Special Delivery Instructions," please deliver Exchange Notes to the undersigned at the address shown above. The undersigned recognizes that the Exchange Offer is subject to the terms of the Registration Rights Agreement among the Company, the Guarantor and the Initial Purchasers and customary conditions as set forth in the section of the Prospectus entitled "The Exchange Offer -- Conditions to the Exchange Offer." All authority herein conferred or agreed to be conferred shall survive the death, incapacity, or dissolution of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Prospectus, this tender for exchange of Outstanding Notes is irrevocable. 7 HOLDER(S) SIGN HERE SIGNATURE(S) Must be signed by the registered holder(s) of Outstanding Notes exactly as name(s) appear(s) on certificate(s) for the Outstanding Notes tendered hereby or on a security position listing or by person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth the signer's full title. (We refer you to Instruction 6.) - -------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Date: , 2003 ------------------------------ Name(s): ----------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title): --------------------------------------------------------- Address: ----------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number(s): ( ) ----------------------------------- Tax Identification or Social Security Number(s): ------------------------------- GUARANTEE OF SIGNATURE(S) (SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1) Authorized Signature: ---------------------------------------------------------- Name and Title: ---------------------------------------------------------------- Name of Firm: ------------------------------------------------------------------ (PLEASE PRINT) Address: ----------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Numbers: ( ) ------------------------------------- Dated: , 2003 ------------------------------ 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an institution (an "Eligible Institution") which is (1) a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., (2) a commercial bank or trust company having an office or correspondent in the United States, or (3) an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, which is a member of one of the following Recognized Signature Guarantee Programs: a. The Securities Transfer Agents Medallion Program (STAMP) b. The New York Stock Exchange Medallion Signature Program (MSP) c. The Stock Exchange Medallion Program (SEMP) Signatures on this Letter of Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed by the holder(s) of the Outstanding Notes tendered herewith and such holder(s) have not completed the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (ii) if such Outstanding Notes are tendered for the account of an Eligible Institution. IN ALL OTHER CASES, ALL SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. 2. Delivery of this Letter of Transmittal and Outstanding Notes; Guaranteed Delivery Procedures. This Letter of Transmittal is to be used by a holder of Outstanding Notes (i) if certificates representing Outstanding Notes are to be forwarded herewith, (ii) if delivery of Outstanding Notes is to be made by book-entry transfer to the Exchange Agent's account at the Book-Entry Transfer Facility, pursuant to the procedures set forth in the section of the Prospectus entitled "The Exchange Offer -- Procedures for Tendering Outstanding Notes," unless an agent's message is transmitted in lieu hereof, or (iii) if a tender has previously been made pursuant to the guaranteed delivery procedures in the section of the Prospectus entitled "The Exchange Offer -- Guaranteed Delivery Procedures," unless an agent's message is transmitted in lieu hereof. If tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer -- Procedures for Tendering Outstanding Notes -- Notes held through DTC" in the Prospectus and in accordance with the Automated Tender Offer Program ("ATOP") established by DTC, a tendering holder will become bound by the terms and conditions hereof in accordance with the procedures established under ATOP. Certificates for all physically tendered Outstanding Notes or any timely confirmation of a book-entry transfer of such Outstanding Notes into the Exchange Agent's account at DTC (a "Book-Entry Confirmation"), as well as a properly completed and duly executed copy of this Letter of Transmittal (or facsimile hereof or agent's message in lieu thereof), together with any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth on the cover of this Letter of Transmittal prior to 5:00 p.m., New York City time, on the Expiration Date. Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available; (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal and all other documents required hereby to the Exchange Agent prior to the Expiration Date or (iii) who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Outstanding Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures" in the Prospectus. Holders may have such tender effected if: (a) such tender is made through an Eligible Institution; (b) prior to the Expiration Date, the Exchange Agent has received from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmittal, mail or hand delivery), setting forth the name and address of the holder of such Outstanding Notes, the certificate number(s) of such Outstanding Notes (unless tender is to be made by book-entry transfer) and the principal amount of Outstanding Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the date of 9 execution of the Notice of Guaranteed Delivery, the certificate(s) for all physically tendered Outstanding Notes, in proper form for transmittal, together with a properly completed and duly executed Letter of Transmittal, or a Book-Entry Confirmation, together with a properly completed and duly executed Letter of Transmittal (or facsimile hereof or an agent's message in lieu thereof), and all other documents required by this Letter of Transmittal, will be deposited by such Eligible Institution with the Exchange Agent; and (c) the certificate(s) for all physically tendered Outstanding Notes or a Book-Entry Confirmation and all other documents referred to in clause (b) above are received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, WITH RETURN RECEIPT REQUESTED, BE USED. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE ELIGIBLE HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT. NEITHER THIS LETTER OF TRANSMITTAL NOR ANY OUTSTANDING NOTES SHOULD BE SENT TO THE COMPANY, THE GUARANTOR OR DTC. No alternative, conditional or contingent tenders will be accepted. All tendering holders of Outstanding Notes, by execution of this Letter of Transmittal (or facsimile hereof, if applicable), or any agent's message in lieu thereof, waive any right to receive notice of the acceptance of their Outstanding Notes for exchange. 3. Inadequate Space. If the space provided in the box entitled "Description of Outstanding Notes" above is inadequate, the certificate number(s) and/or the aggregate principal amount(s) of the Outstanding Notes being tendered and/or the principal amount tendered for exchange should be listed on a separate signed schedule affixed hereto. 4. Withdrawals. A tender of Outstanding Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date by delivery of a written or facsimile transmission notice of withdrawal to the Exchange Agent at the address or the facsimile number set forth on the cover of this Letter of Transmittal or by compliance with the appropriate procedures of DTC's ATOP system. To be effective, a notice of withdrawal of Outstanding Notes must (i) specify the name of the person who tendered the Outstanding Notes to be withdrawn; (ii) identify the Outstanding Notes to be withdrawn (including the certificate number(s) unless tendered by book-entry transfer), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Outstanding Notes were tendered (including any required signature guarantees); and (iv) if Outstanding Notes have been tendered pursuant to book-entry transfer, specify the name and number of the account at DTC to be credited with the withdrawn Outstanding Notes and otherwise comply with the procedures of such facility, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by any method of delivery described in this section. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company in the Company's discretion, whose determination shall be final and binding on all parties. Any Outstanding Notes so withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer and will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal. Properly withdrawn Outstanding Notes will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered by following one of the procedures described in the section of the Prospectus entitled "The Exchange Offer -- Procedures for Tendering Outstanding Notes" at any time prior to 5:00 p.m., New York City time, on the Expiration Date. 5. Partial Tenders. Tenders of Outstanding Notes will be accepted only in integral multiples of $1,000 principal amount. If a tender for exchange is to be made with respect to less than the entire 10 principal amount of any Outstanding Notes held by any holder, fill in the principal amount of Outstanding Notes which are tendered for exchange in column (4) of the box entitled "Description of Outstanding Notes," as more fully described in the footnotes thereto. In case of a partial tender for exchange of Outstanding Notes represented by a certificate, a new certificate, for the remainder of the principal amount of the Outstanding Notes, will be sent to such holder of Outstanding Notes as promptly as practicable after the expiration or termination of the Exchange Offer. All Outstanding Notes represented by a certificate delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 6. Signatures on this Letter of Transmittal, Assignment and Endorsements. (a) The signature(s) of the holder of Outstanding Notes on this Letter of Transmittal must correspond with the name(s) of the holder written on the face of the certificate representing tendered Outstanding Notes or as recorded in the records of the Book-Entry Transfer Facility, as the case may be, without alteration, enlargement or any change whatsoever. (b) If tendered Outstanding Notes are owned by two or more joint owners, all such owners must sign this Letter of Transmittal. (c) If any tendered Outstanding Notes are owned in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal and as many necessary or required documents as there are different registrations or certificates. (d) When this Letter of Transmittal is signed by the holder(s) of the Outstanding Notes listed and transmitted hereby, no endorsements of Outstanding Notes or powers of attorney are required unless the Exchange Notes are to be issued in the name of a person other than the holder(s). Signatures on such certificates representing such Outstanding Notes or powers of attorney must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). (e) If this Letter of Transmittal or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, proper evidence satisfactory to the Company of such person's authority to so act must be submitted with this Letter of Transmittal. (f) If this Letter of Transmittal is signed by a person or persons other than the holder of Outstanding Notes listed herein, this Letter of Transmittal must be accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the holders that appear on the face of the certificate representing tendered Outstanding Notes or on the security position listing maintained by DTC, as the case may be. Signatures on such powers of attorney must be guaranteed by an Eligible Institution (unless signed by an Eligible Institution). 7. Transfer Taxes. Holders who tender their Outstanding Notes will not be obligated to pay transfer taxes, if any, in connection therewith unless tendered Outstanding Notes are registered in the name of any person other than the person signing the Letter of Transmittal or any transfer tax is imposed for any reason other than the exchange of Outstanding Notes in the Exchange Offer. If satisfactory evidence of payment of such taxes or exemptions therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. 8. Special Issuance and Delivery Instructions. If the Exchange Notes are to be issued to someone other than the registered holder of Outstanding Notes or sent to someone other than the registered holder or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. 9. Irregularities. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of Outstanding Notes tendered for exchange will be determined by the Company, at the Company's discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all tenders of any particular Outstanding Notes not properly 11 tendered or to reject any particular Outstanding Notes the acceptance of which might, in the judgment of the Company or its counsel, be unlawful. The Company also reserves the absolute right, in the Company's discretion, to waive any defects or irregularities or conditions of the Exchange Offer as to particular Outstanding Notes either before or after the Expiration Date (including the right to waive the ineligibility of any holder who seeks to tender Outstanding Notes in the Exchange Offer). The interpretation of the terms and conditions of the Exchange Offer as to any particular Outstanding Notes either before or after the Expiration Date (including the Letter of Transmittal and instructions thereto) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes for exchange must be cured within such reasonable period of time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of Outstanding Notes for exchange, nor shall any of them incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. 10. Taxpayer Identification Number. The Company or its agent may be required to withhold (currently at a rate of 28%) the amount of any reportable payment made with respect to the Outstanding Notes or the Exchange Notes following the Exchange Offer (the "Notes"). In order to avoid withholding, United States federal income tax law generally requires that a holder of the Notes must provide the Company or its agent with (i) such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or (ii) in the case of certain exempt foreign persons, the appropriate Form W-8 as discussed below. If a holder does not provide the Company or its agent with its current TIN, such holder may be subject to a $50 penalty imposed by the Internal Revenue Service (the "IRS"). If withholding results in an overpayment of taxes, a refund may be obtained. Exempt holders of the Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. Certain foreign persons can qualify for this exemption by submitting a properly completed Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, or Form W-8ECI, Certificate of Foreign Person's Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States. A Form W-8BEN or Form W-8ECI may be obtained from the Exchange Agent. To prevent backup withholding on the amount of any reportable payment made with respect to the Notes, each holder of the Notes must provide its correct TIN by completing the Substitute Form W-9 set forth below, certifying, under penalties of perjury, that the TIN provided is correct (or that such holder is awaiting a TIN) and that (i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the IRS that such holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the IRS has notified the holder that such holder is no longer subject to backup withholding. If the Notes are in more than one name or are not in the name of the actual owner, such holder should consult the W-9 Guidelines for instructions on applying for a TIN and write "applied for" in lieu of its TIN in Part 1 of the Substitute Form W-9. Note: writing "applied for" on the form means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. In such case, JPMorgan Chase Bank acting as the Paying Agent (the "Paying Agent") will retain 28% of any reportable payment made to a holder during the sixty (60) day period following the date of the Substitute Form W-9. If the holder furnishes the Paying Agent with its TIN within sixty (60) days of the Substitute Form W-9, the Paying Agent will remit any such amount retained during such sixty (60) day period to such holder and no further amounts will be retained or withheld from payments made to the holder thereafter. If, however, such holder does not provide its TIN to the Paying Agent within such sixty (60) day period, the Paying Agent will remit such previously withheld amounts to the IRS as backup withholding and will withhold a portion (not to exceed 28% or such reduced amount as is then applicable) of all reportable payments to the holder thereafter until such holder furnishes its TIN to the Paying Agent. 12 11. Waiver of Conditions. Each of the Company and the Guarantor reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus, as the case may be, at its discretion. 12. Mutilated, Lost, Stolen or Destroyed Outstanding Notes. If any certificates representing Outstanding Notes have been mutilated, lost, stolen or destroyed, the holder should promptly contact the Exchange Agent at the address listed below for further instructions: JPMorgan Chase Bank ITS Bond Events 2001 Bryan Street, 9th Floor Dallas, Texas 75201 13. Requests for Information or Additional Copies. Requests for information or for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent at the address or telephone number set forth on the cover of this Letter of Transmittal. Additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained from your broker, dealer, commercial bank, trust company or other nominee. 14. Incorporation of Letter of Transmittal. This Letter of Transmittal shall be deemed to be incorporated in and acknowledged and accepted by any tender through DTC's ATOP system by any participant in DTC on behalf of itself and the beneficial owners of any Outstanding Notes so tendered. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF, IF APPLICABLE), OR AN AGENT'S MESSAGE IN LIEU THEREOF, TOGETHER WITH CERTIFICATES OR BOOK-ENTRY CONFIRMATION, OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M. NEW YORK CITY TIME, ON THE EXPIRATION DATE. 13 IMPORTANT TAX INFORMATION To prevent backup withholding on the amount of any reportable payment made with respect to the Notes, the holder is required to give the Exchange Agent the social security number or employer identification number of the holder of the Notes. If the Notes are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification.
- ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ SUBSTITUTE PART 1: TAXPAYER IDENTIFICATION NUMBER ("TIN") -- For FORM W-9 all Accounts enter TIN in the box at right. (For most TIN: ------------------------ individuals, this is your social security number. For (SOCIAL SECURITY NUMBER OR sole proprietors or resident aliens, see the W-9 EMPLOYER IDENTIFICATION NUMBER) Guidelines. For other entities, enter your Employer (IF AWAITING TIN, WRITE Identification Number. If you do not have a number, "APPLIED FOR") see Obtaining a Number in the enclosed W-9 Guidelines). Certify by signing and dating below. Note: If the account is in more than one name, see chart in the enclosed W-9 Guidelines to determine which number to give the payer. --------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2: For payees exempt from backup withholding, see the enclosed W-9 Guidelines and INTERNAL REVENUE SERVICE complete as instructed therein. PAYOR'S REQUEST FOR CERTIFICATION -- Under penalties of perjury, I certify that: TAXPAYER IDENTIFICATION NUMBER (1) the number shown on this form is my correct TIN (or I am awaiting for a number to be issued to me), and (2) I am not subject to backup withholding either because (i) I am exempt from backup withholding, (ii) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien). -------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are not subject to backup withholding, do not cross out item (2). The IRS does not require your consent to any provision of this document other than the certification required to avoid backup withholding. -------------------------------------------------------------------------------------- PART 3: CERTIFICATION -- Under the penalties of perjury, I certify that the information provided on this form is true, correct and complete Signature: ------------------------------------------ Date: ---------------------- -------------------------------------------------------------------------------------- NAME (PLEASE PRINT) - -------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF UP TO 28% OF ANY AMOUNT PAID TO YOU IN CONNECTION WITH THE NOTES. PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 14 YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, a portion (not to exceed 28%) of all reportable payments made to me on account of the Notes will be retained until I provide a taxpayer identification number to the Exchange Agent and that, if I do not provide my taxpayer identification number within 60 days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding and a portion (not to exceed 28%) of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a taxpayer identification number. Signature ------------------------------ Date ------------------------- Name - -------------------------------------------------------------------------------- (PLEASE PRINT) 15 EX-99.2 15 h08254exv99w2.txt FORM OF NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY WITH RESPECT TO 4.375% NOTES DUE 2015 OF APACHE FINANCE CANADA CORPORATION, FULLY AND UNCONDITIONALLY GUARANTEED BY APACHE CORPORATION, PURSUANT TO THE PROSPECTUS DATED , 2003 This Notice of Guaranteed Delivery, or one substantially equivalent hereto, must be used by any holder of 4.375% Notes due 2015 (the "Outstanding Notes") of Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia, Canada (the "Company"), who wishes to tender Outstanding Notes pursuant to the Exchange Offer, as such term is defined in the Prospectus dated , 2003 (as the same may be amended or supplemented from time to time, the "Prospectus") and (i) whose Outstanding Notes are not immediately available, (ii) for whom time will not permit such Outstanding Notes, Letter of Transmittal or other required documents to reach the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date (as defined in the Prospectus), or (iii) who cannot complete the procedures for book-entry transfer on a timely basis. This Notice of Guaranteed Delivery may be delivered by facsimile transmission, registered or certified mail, overnight courier or hand delivery to the Exchange Agent. See "The Exchange Offer -- Guaranteed Delivery Procedures" in the Prospectus. Capitalized terms used but not defined herein have the meaning ascribed to them in the Prospectus or the Letter of Transmittal. Delivery to: JPMORGAN CHASE BANK, as Exchange Agent By Mail: By Hand or by Overnight By Facsimile: (Registered or Certified Mail Courier: (For Eligible Institutions is recommended) ITS Bond Events only) ITS Bond Events 2001 Bryan Street, 9th Floor ITS Bond Events P.O. Box 2320 Dallas, TX 75201 Facsimile No.: Dallas, TX 75221 Attention: Frank Ivins (214) 468-6494 Attention: Frank Ivins Attention: Frank Ivins To confirm facsimile: (214) 468-6464 Telephone Inquiries: (800) 275-2048
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: The undersigned hereby tenders to the Company upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Outstanding Notes specified below pursuant to the guaranteed delivery procedures set forth under the caption "The Exchange Offer -- Guaranteed Delivery Procedures' in the Prospectus. By so tendering, the undersigned hereby makes at and as of the date hereof, the representations and warranties of a tendering holder of Outstanding Notes set forth in the Letter of Transmittal. The undersigned hereby tenders the Outstanding Notes listed below: CERTIFICATE NUMBERS (IF AVAILABLE) PRINCIPAL AMOUNT TENDERED - ------------------------------------ ------------------------------------ - ------------------------------------ ------------------------------------ - ------------------------------------ ------------------------------------ - ------------------------------------ ------------------------------------ - ------------------------------------ ------------------------------------
All authority herein conferred or agreed to be conferred shall survive the death, incapacity, or dissolution of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. 2 HOLDER(S) SIGN HERE Must be signed by the registered holder(s) of Outstanding Notes exactly as name(s) appear(s) on certificate(s) for the Outstanding Notes tendered hereby or on a security position listing or by person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth the signer's full title. - -------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Date: ------------------------------ , 2003 If Outstanding Notes will be tendered by book-entry transfer: Name of Tendering Institution: - -------------------------------------------------------------------------------- The Depository Trust Company Account Number: - -------------------------------------------------------------------------------- Name(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number(s): ( ) - -------------------------------------------------------------------------------- Tax Identification or Social Security Number(s): - -------------------------------------------------------------------------------- 3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, an Eligible Institution, guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof), together with the Outstanding Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Outstanding Notes into the Exchange Agent's account at The Depository Trust Company, pursuant to the procedure for book-entry transfer set forth in the Prospectus, and any other required documents, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Outstanding Notes tendered hereby and the documents and confirmations referred to in the preceding paragraph to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. SIGN HERE - -------------------------------------------------------------------------------- Name of Firm - -------------------------------------------------------------------------------- Authorized Signature - -------------------------------------------------------------------------------- Title - -------------------------------------------------------------------------------- Name - -------------------------------------------------------------------------------- (PLEASE PRINT) - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- Zip Code - -------------------------------------------------------------------------------- Area Code and Telephone No. - -------------------------------------------------------------------------------- Date: ------------------------------ , 2003 DO NOT SEND CERTIFICATE FOR OUTSTANDING NOTES WITH THIS FORM. ACTUAL SURRENDER OF CERTIFICATES FOR OUTSTANDING NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A COPY OF THE EXECUTED LETTER OF TRANSMITTAL OR FACSIMILE THEREOF. 4 EX-99.3 16 h08254exv99w3.txt FORM OF EXCHANGE AGENT AGREEMENT Exhibit 99.3 _____ __, 2003 EXCHANGE AGENT AGREEMENT JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, NY 10004 Ladies and Gentlemen: Apache Finance Canada Corporation, an unlimited liability company organized under the laws of the Province of Nova Scotia (the "Company"), proposes to make an offer (the "Exchange Offer") to exchange up to $350,000,000 aggregate principal amount of its 4.375% Notes due 2015, fully and unconditionally guaranteed by Apache Corporation ("Apache"), a Delaware corporation (the "New Notes"), for a like principal amount of its outstanding 4.375% Notes Due 2015, fully and unconditionally guaranteed by Apache (the "Old Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus (the "Prospectus" included in the registration statement of the Company and Apache on Form S-4 (File No. 333-____), [as amended (the "Registration Statement"))] filed with the Securities and Exchange Commission (the "SEC"), and proposed to be distributed to all record holders of the Old Notes who acquired such Old Notes pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "Securities Act"). The Old Notes and the New Notes are collectively referred to herein as the "Notes" or the "Securities." Capitalized terms used herein and not defined shall have the respective meanings ascribed to them in the Prospectus or the accompanying Letter of Transmittal (as defined below). The Company hereby appoints JPMorgan Chase Bank to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to JPMorgan Chase Bank. The Exchange Offer is expected to be commenced by the Company on or about _____ __, 2003, after the Registration Statement filed by the Company is declared effective under the Securities Act (the "Effective Time"), which shall be on or about _____ __, 2003. The letter of transmittal ("Letter of Transmittal") accompanying the Prospectus is to be used by the holders of the Old Notes to accept the Exchange Offer, and contains instructions with respect to the delivery of Old Notes tendered. The Exchange Agent's obligations with respect to receipt and inspection of the Letter of Transmittal in connection with the Exchange Offer shall be satisfied for all purposes hereof by inspection of the electronic message transmitted to the Exchange Agent by Exchange Offer participants in accordance with the Automated Tender Offer Program ("ATOP") of the Depositary Trust Company ("DTC"), and by otherwise observing and complying with all procedures established by DTC in connection with ATOP, to the extent that ATOP is utilized by Exchange Offer participants. The Exchange Offer shall expire at 5:00 p.m., New York City time, on _____ __, 2003 or on such later date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (confirmed in writing) or written notice to you at any time before 9:00 a.m., New York City time, on the business day following the previously scheduled Expiration Date, and in such case the term "Expiration Date" shall mean the time and date on which such Exchange Offer as so extended shall expire. The Company expressly reserves the right, in its sole discretion, to delay, amend or terminate the Exchange Offer, and not to accept for exchange any Old Notes not theretofore accepted for exchange upon the occurrence of certain events, including any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer." The Company will give to you as promptly as practicable oral (confirmed in writing) or written notice of any delay, amendment, termination or non-acceptance. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth herein or in the section of the Prospectus captioned "The Exchange Offer", or in the Letter of Transmittal accompanying the Prospectus and such duties which are necessarily incidental thereto; provided however, that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish a book-entry account with respect to the Old Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Exchange Agent Agreement, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. As soon as practicable after receipt, you are to examine each of the Letters of Transmittal and certificates for Old Notes (or confirmation of book-entry transfers into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Notes in connection with tenders of Old Notes, to ascertain whether: (i) the Letters of Transmittal, certificates and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and in the Prospectus and that such book-entry confirmations are in due and proper form and contain the information required to be set forth therein, and (ii) the Old Notes have otherwise been properly tendered in 2 accordance with the Prospectus and the Letter of Transmittal. In each case where (i) the Letter of Transmittal or any other document has been improperly completed or executed, (ii) book-entry confirmations are not in due and proper form or omit certain information or (iii) any of the certificates for Old Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be necessary or advisable to cause such irregularity to be corrected. If such condition is not promptly remedied by the presenters, you shall report such condition to the Company and await its direction. All questions as to the validity, form, eligibility (including timelines of receipt), acceptance and withdrawal of any Old Notes tendered or delivered by the Company shall be determined by the Company, in its sole discretion. 4. With the approval of any of the Chief Executive Officer, Chief Financial Officer or Secretary of the Company (such approval, if given orally, promptly to be confirmed in writing) or any other party designated by such officer in writing, you are authorized to waive any irregularities in connection with any tender of Old Notes pursuant to the Exchange Offer. 5. Tenders of Old Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer - -- Procedures for Tendering Old Notes" and Old Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this paragraph 5, Old Notes which the Chief Executive Officer, Chief Financial Officer or the Secretary of the Company or any other party designated by any such officer in writing shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, promptly shall be confirmed in writing). 6. You shall advise the Company with respect to any Old Notes delivered subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Notes. 7. The Company reserves the absolute right (i) to reject any or all tenders of any particular Old Notes determined by the Company not to be in proper form or the acceptance or exchange of which may, in the opinion of the Company's counsel, be unlawful and (ii) to waive any of the conditions of the Exchange Offer or any defect or irregularity in the tender of any particular Old Notes, and the Company's determination of the terms and conditions of the Exchange Offer (including the Letter of Transmittal and Notice of Guaranteed Delivery and the instructions set forth therein) will be final and binding. 8. You shall accept tenders: (a) in cases where the Old Notes are registered in two or more names only if signed by all named holders; 3 (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Old Notes provided that customary transfer requirements, including (i) any endorsement of the Old Note or delivery of a properly completed bond power, in either case duly executed by each registered holder, (ii) payment of applicable transfer taxes, and (iii) the requirements imposed by the transfer restrictions on the Old Notes (including any applicable requirements for certifications, legal opinion or other information) are fulfilled. You shall accept partial tenders of Old Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Notes to the transfer agent for the Old Notes for split-up and return any untendered Old Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 9. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice if given orally, promptly to be confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Old Notes properly tendered and you, on behalf of the Company, will exchange such Old Notes for New Notes and cause such Old Notes to be canceled. Delivery of New Notes will be made on behalf of the Company by you at the rate of $1,000 principal amount of New Notes for each $1,000 principal amount of the Old Notes tendered promptly after notice (such notice if given orally, promptly to be confirmed in writing) of acceptance of said Old Notes by the Company; provided, however, that in all cases, Old Notes tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Old Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof or an Agent's Message in lieu thereof) with any required signature guarantees and any other required document. Unless otherwise instructed in writing by the Company, you shall issue New Notes only in denominations of $1,000 or any integral multiple thereof. 10. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date in accordance with the terms of the Exchange Offer. You shall, after proper notification of such withdrawal, return such Old Notes to, or in accordance with the instructions of, the holder of such Old Notes and such Old Notes shall no longer be considered properly tendered. Any withdrawn Old Notes may be tendered again following procedures therefore described in the Prospectus at any time on or prior to the Expiration Date. 11. The Company shall not be required to exchange any Old Notes tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the 4 Company not to exchange any Old Notes tendered shall be given (such notices if given orally, promptly shall be confirmed in writing) by the Company to you. 12. If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Old Notes tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer"or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Old Notes (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them (or effected such book-entry transfer). 13. All certificates for reissued Old Notes, unaccepted Old Notes or New Notes (other than those effected by book-entry transfer) shall be forwarded by (a) first-class mail, postage pre-paid under a blanket surety bond protecting you and the Company from loss or liability arising out of the non-receipt or non-delivery of such certificates or (b) by registered mail insured separately for the replacement value of each of such certificates. 14. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any persons to solicit tenders. 15. As Exchange Agent hereunder you: (a) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the Old Notes deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; (b) shall not take any legal action hereunder against any third party, other than the Company, without the prior written consent of the Company, and shall not be obligated to take any legal action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity against such expense or liability; (c) shall not be liable to the Company for any action taken or omitted by you, or any action suffered by you to be taken or omitted, without negligence, misconduct or bad faith on your part, by reason of or as a result of the administration of your duties hereunder in accordance with the terms and conditions of this Agreement or by reason of your compliance with the instructions set forth herein or with any written or oral instructions delivered to you pursuant hereto, and may reasonably rely on and shall be protected in acting in good faith in reliance upon any certificate, instrument, opinion, notice, letter, facsimile or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties; 5 (d) in connection with the administration of your duties hereunder and in the absence of negligence, misconduct or bad faith on your part, may reasonably rely upon any tender, statement, request, comment, agreement or other instrument whatsoever, not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith reasonably believe to be genuine or to have been signed or represented by a proper person or persons; (e) may rely on and shall be protected in acting upon written notice or oral instructions from any officer of the Company authorized to provide instructions under this Agreement; (f) shall not advise any person tendering Old Notes pursuant to the Exchange Offer as to whether to tender or refrain from tendering all or any portion of the Old Notes or as to the market value, decline or appreciation in market value of any Old Notes that may or may not occur as a result of the Exchange Offer or as to the market value of the Exchange Notes and shall not solicit any holder of Old Notes for the purpose of causing such person to tender its Old Notes; (g) may consult with counsel with respect to any questions relating to your duties and responsibilities, and the written advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by you hereunder in good faith and in reliance thereon; and (h) in the absence of negligence, willful misconduct or bad faith on your part, shall in no event be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if you have been advised of the likelihood of such loss or damage and regardless of the form of action. 16. As soon as practicable after your receipt of notification from the Company as to the Effective Time, you shall send to all holders of Old Notes a copy of the Prospectus, the Letter of Transmittal (including instructions for completing a substitute Form W-9), the notice of guaranteed delivery (as described in the Prospectus) and such other documents (collectively, the "Exchange Offer Documents") as may be furnished by the Company to commence the Exchange Offer and take such other action as may from time to time be requested by the Company or its counsel (and such other action as you may reasonably deem appropriate) to furnish copies of the Exchange Offer Documents or such other forms as may be approved from time to time by the Company, to all holders of Old Notes and to all persons reasonably requesting such documents and to accept and comply with telephone and mail requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents to enable you to perform your duties hereunder. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: ________________________ (___) ___ ____. 6 17. You shall advise, by facsimile transmission or telephone, and promptly thereafter confirm in writing, to ________________ (at the facsimile number _____________), and such other person or persons as the Company may request, daily, and more frequently during the week immediately preceding the Expiration Date and if otherwise requested by the Company, up to and including the Expiration Date, as to the aggregate principal amount of Old Notes which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to the Exchange Offer and this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons as the Company requests in writing from time to time prior to the Expiration Date of such other information as it or he or she reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Old Notes tendered, the aggregate principal amount of Old Notes accepted and the identity of any participating Broker-Dealers and the aggregate principal amount of Exchange Notes delivered to each, and deliver said list to the Company promptly after the deadline for the Exchange Offer or the Expiration Date. 18. Each Letter of Transmittal, Old Note and any other document received by you in connection with the Exchange Offer shall be stamped by you as to the date and the time of receipt thereof (or if Old Notes are tendered by book-entry delivery, such form of record keeping of receipt as is customary for tenders through ATOP) and, if defective, the date and time the last defect was cured or waived by the Company. You shall retain all Old Notes and Letters of Transmittal and other related documents or correspondence received by you until the Expiration date. You shall return all such material to the Company as soon as practicable after the Expiration Date. You shall dispose of unused Letters of Transmittal and other surplus materials in accordance with your customary procedures. 19. It is understood and agreed that the securities, money or property to be deposited with or received by you as Exchange Agent (the "Property") constitute a special, segregated account held solely for the benefit of the Company and the tendering holders of Old Notes, as their interests may appear, and the Property shall not be commingled with the money, assets or properties of you or of any other person, firm or corporation. You hereby waive any and all rights of lien, encumbrance, attachment or right of set-off whatsoever, if any, that you may have with respect to the Property so deposited, whether such rights arise by reason of applicable law, contract or otherwise. 20. For services rendered as Exchange Agent hereunder you shall be entitled to such compensation and reimbursement of out-of-pocket expenses in accordance with Schedule I hereto. 7 21. You hereby acknowledge receipt of the Prospectus, the Letter of Transmittal and the other documents associated with the Exchange Offer attached hereto and further acknowledge that you have examined each of them. Any inconsistency between this Agreement, on the one hand, and the Prospectus, the Letter of Transmittal and such other forms (as they may be amended from time to time), on the other hand, shall be resolved in favor of the Prospectus, the Letter of Transmittal and such other forms, except with respect to the duties, liabilities and indemnification of you as Exchange Agent which shall be controlled by this Agreement. 22. The Company agrees to indemnify and hold you harmless in your capacity as Exchange Agent hereunder against any liability, cost or expense, including reasonable attorneys' fees and expenses, arising out of or in connection with your appointment as Exchange Agent and the performance of your duties hereunder, including, without limitation, any act, omission, delay or refusal made by you in reasonable reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document reasonably believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Notes reasonably believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Old Notes; provided, however, that the Company shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your gross negligence, willful misconduct or bad faith. In no case shall the Company be liable under this indemnity with respect to any action, proceeding, suit or claim against you unless the Company shall be notified by you, by letter or facsimile transmission confirmed by letter, of the written assertion of any action, proceeding, suit or claim made or commenced against you promptly after you shall have been served with the summons or other first legal process or have received the first written assertion, giving information as to the nature and basis of the action, proceeding, suit or claim. The Company shall be entitled to participate at its own expense in the defense of any such action, proceeding, suit or claim and if the Company so elects, assume defense of such action, proceeding, suit or claim. In the event that the Company assumes such defense, the Company shall not thereafter be liable for the fees and expenses of any additional counsel that you retain. You agree that, without the prior written consent of the Company (which consent shall not be unreasonably withheld), you will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification could be sought in accordance with the indemnification provision of this Agreement (whether or not you are an actual or potential party to such claim, action or proceeding). Under no circumstances shall the Company be liable for the costs and expenses of any settlement of any action, proceeding, suit or claim effected by you without the prior written consent of the Company. 23. You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. The Company understands that you are required, in certain instances, to backup withhold at the applicable rate with respect to interest paid on the Exchange Notes and proceeds from the sale, exchange, redemption or retirement of the Exchange Notes from holders who have not supplied their correct Taxpayer Identification Numbers or required certification. Such funds will be turned over to the Internal Revenue Service in accordance with applicable regulations. 8 24. You shall notify the Company of the amount of any transfer taxes payable in respect of the exchange of Old Notes and shall deliver or cause to be delivered, in a timely manner, to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Notes your check in the amount of all transfer taxes so payable, and, subject to the provisions of Section 8(c) of this Agreement, the Company shall reimburse you for the amount of any and all transfer taxes payable in respect of the exchange of Old Notes; provided however, that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you. 25. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and permitted assigns of each of the parties hereto and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Without limitation of the foregoing, the parties hereto expressly agree that no holder of Old Notes or Exchange Notes shall have any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 26. The Company and you hereby submit to the exclusive jurisdictions of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 27. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 28. In case any provision of this Agreement 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. 29. This Agreement shall not be deemed or construed to be modified, amended, rescinded, canceled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. 30. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: If to the Company: Apache Finance Canada Corporation ( 9 Telephone: (___) ___ -____ Facsimile: (___) ___ ____ Attention: [_______]. With a copy to: If to the Exchange Agent: JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, NY 10004 Facsimile: (212) 623-6167 Attention: Institutional Trust Services 31. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Paragraphs 19 and 22 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Notes, funds or property (including, without limitation, Letters of Transmittal and any other documents relating to the Exchange Offer) then held by you as Exchange Agent under this Agreement. 32. You may resign from your duties under this Agreement by giving to the Company thirty days' prior written notice. If you resign or become incapable of acting as Exchange Agent and the Company fails to appoint a new exchange agent within a period of thirty days after it has been notified in writing of such resignation or incapacity by you, the Company shall appoint a successor exchange agent or assume all of the duties and responsibilities of the Exchange Agent. Any successor exchange agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Exchange Agent without any further act or deed; but you shall deliver and transfer to the successor exchange agent any Property at the time held by you hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for such purpose. 33. This Agreement shall be binding and effective as of the date hereof. 10 Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. APACHE FINANCE CANADA CORPORATION By:______________________________ Name: Title: Accepted as of the date first above written: JPMORGAN CHASE BANK By:_________________________ Name: Title: 11 SCHEDULE 1 APACHE FINANCE CANADA CORPORATION EXCHANGE AGENCY FEE SCHEDULE Flat Fee............................................................. $[_____]
Out-Of-Pocket Expenses Fees quoted do not include out-of-pocket expenses including, but not limited to, reasonable legal fees and expenses, facsimile, stationary, postage, telephone, overnight courier and messenger costs, all of which shall be paid by the Company. -----END PRIVACY-ENHANCED MESSAGE-----