EXHIBIT 99.1
[LOGO] HARKEN
Energy Corporation
Instructions as to Use of
Rights Certificates
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Consult the Information Agent, the Subscription Agent, your bank or broker
if you have any questions.
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The following instructions relate to a rights offering (the "Rights
Offering") by Harken Energy Corporation, a Delaware corporation (the
"Company"), to the holders of record (collectively, the "Recordholders") of its
common stock, par value $0.01 per share (the "Common Stock"), and its Series G1
Preferred Stock and its Series G2 Preferred Stock (collectively, the "Preferred
Stock") as described in the Company's Prospectus dated , 2003 (the
"Prospectus"). Recordholders at the close of business on January 30, 2003 (the
"Record Date") are receiving non-transferable subscription rights (the
"Rights") to subscribe for and purchase shares of the Common Stock (the
"Underlying Shares"). An aggregate of million Underlying Shares are
being offered by the Prospectus. Each Recordholder will receive one Right for
each share of Common Stock owned (or in the case of the Preferred Stock, one
Right for each share of Common Stock issuable upon conversion) as of the close
of business on the Record Date. The Rights will expire, if not exercised, at
5:00 p.m., New York City time, on , 2003, unless extended in the sole
discretion of the Company (as it may be extended, the "Expiration Date"). After
the Expiration Date, unexercised Rights will be null and void. The Company will
not be obligated to honor any purported exercise of Rights received by American
Stock Transfer & Trust Company (the "Subscription Agent") after 5:00 p.m., New
York City time, on the Expiration Date, regardless of when the documents
relating to such exercise were sent, except pursuant to the Guaranteed Delivery
Procedures described below. The Company may extend the Expiration Date from
time to time by giving oral or written notice to the Subscription Agent on or
before the Expiration Date, followed by a press release no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. The Rights will be evidenced by non-transferable
Rights certificates (the "Rights Certificates").
The number of Rights to which you are entitled is printed on the face of
your Rights Certificate. Each Right allows the holder thereof to subscribe for
shares of Common Stock. The Subscription Price for the Rights is $
per Right (or $ per share of Common Stock).
If any shares of Common Stock offered in the Rights Offering remain
unsubscribed after the Rights Offering, Lyford Investments Enterprises Ltd., a
creditor of the Company, has agreed, subject to certain conditions, to purchase
all such shares at the Subscription Price.
You should indicate your wishes with regard to the exercise of your Rights
by completing the appropriate portions of your Rights Certificate and returning
the certificate to the Subscription Agent in the envelope provided.
Your Rights Certificates, or Notice of Guaranteed Delivery, and Subscription
Price payment must be received by the Subscription Agent on or before 5:00
p.m., New York City time, on the Expiration Date. Once a holder of Rights has
exercised a Right, such exercise may not be revoked. Rights not exercised prior
to the Expiration Date of the Rights Offering will expire.
1. Method of Subscription--Exercise of Rights.
To exercise your Rights, complete your Rights Certificate and send the
properly completed and executed Rights Certificate evidencing such Rights with
any signatures required to be guaranteed so guaranteed, together with payment
in full of the Subscription Price for each Underlying Share subscribed for
pursuant to the Subscription Right, to the Subscription Agent on or prior to
5:00 p.m., New York City time on the Expiration Date. Payment of the
Subscription Price will be held in a segregated account to be maintained by the
Subscription Agent. All payments must be made in U.S. dollars for the full
number of Underlying Shares being subscribed for:
(a) by uncertified personal check, payable to American Stock Transfer &
Trust Company as Subscription Agent for the Company,
(b) by certified check or bank check drawn on a U.S. bank or money
order, payable to American Stock Transfer & Trust Company as Subscription
Agent for the Company, or
(c) by wire transfer directed to the account maintained by American
Stock Transfer & Trust Company (the "Subscription Account") at:
JP Morgan Chase
55 Water Street
New York, NY 10005
ABA #021000021
Credit Account No. 323-113060
Account Name: American Stock Transfer & Trust Company
Subscription Agent
Any wire transfer should clearly indicate the identity of the subscriber who is
paying the Subscription Price by the wire transfer. Payments will be deemed to
have been received by the Subscription Agent only upon:
(a) receipt and clearance of any uncertified check;
(b) receipt by the Subscription Agent of any certified check or bank
draft drawn upon a U.S. bank, any money order or any funds transferred by
wire transfers; or
(c) receipt of collected funds in the Subscription Account designated
above.
Please note that funds paid by uncertified personal check may take at least
five business days to clear. Accordingly, holders of Rights who wish to pay the
Subscription Price by means of an uncertified personal check are urged to make
payment sufficiently in advance of the Expiration Date to ensure that such
payment is received and clears by the Expiration Date, and are urged to
consider payment by means of a certified or bank check, money order or wire
transfer of immediately available funds.
The Rights Certificate and payment of the Subscription Price, or, if
applicable, Notices of Guaranteed Delivery (as defined below) must be delivered
to the Subscription Agent by one of the methods described below:
By mail, by hand or by overnight courier to:
American Stock Transfer & Trust Company
Attention: Rights Agent
59 Maiden Lane, Plaza Level
New York, N.Y. 10038
Telephone Number for Information: (800) 937-5449
Telephone Number for Confirmation: (718) 921-8200
Delivery to an address other than those above does not constitute valid
delivery.
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The address and telephone number of the Information Agent
for inquiries, information or requests for additional documentation are as
follows:
Morrow & Co., Inc.
445 Park Avenue, 5/th/ Floor
New York, N.Y. 10022
E-mail: harken.info@morrowco.com
Telephone Numbers for Information:
Stockholders, Please Call: (800) 607-0088
Banks and Brokerage Firms, Please Call: (800) 654-2468
By making arrangements with your bank or broker for the delivery of funds on
your behalf you may also request such bank or broker to exercise the Rights
Certificate on your behalf. Alternatively, you may cause a written guarantee
substantially in the form enclosed herewith (the "Notice of Guaranteed
Delivery"), from a member firm of a registered national securities exchange or
a member of the National Association of Securities Dealers, Inc., or from a
commercial bank or trust company having an office or correspondent in the
United States or from a bank, stockbroker, savings and loan association or
credit union with membership in an approved signature guarantee medallion
program, pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as
amended (each, an "Eligible Institution"), to be received by the Subscription
Agent on or prior to the Expiration Date together with payment in full of the
applicable Subscription Price. Such Notice of Guaranteed Delivery must state
your name, the number of Rights represented by the Rights Certificate(s) held
by you, the number of Underlying Shares being subscribed for pursuant to the
Right, and that you will guarantee the delivery to the Subscription Agent of
any properly completed and executed Rights Certificate or Rights Certificates
evidencing such Rights within three (3) business days following the date of the
Notice of Guaranteed Delivery. If this procedure is followed, the properly
completed Rights Certificate or Rights Certificates evidencing the Rights being
exercised, with any signatures required to be guaranteed so guaranteed, must be
received by the Subscription Agent within three (3) business days following the
date of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery
may be delivered to the Subscription Agent in the same manner as Rights
Certificates at the address set forth above, or may be transmitted to the
Subscription Agent by facsimile transmission (Facsimile No. (718) 234-5001).
Additional copies of the Notice of Guaranteed Delivery may be obtained upon
request from the Information Agent at the address, or by calling the telephone
number, set forth above.
If the aggregate Subscription Price paid by you is insufficient to purchase
the number of Underlying Shares subscribed for, or if no number of Underlying
Shares to be purchased is specified, then you will be deemed to have exercised
the Subscription Right to purchase Underlying Shares to the full extent of the
payment tendered.
If the aggregate Subscription Price paid by you exceeds the amount necessary
to purchase the number of Underlying Shares for which you have indicated an
intention to subscribe (such excess being the "Subscription Excess"), then any
remaining amount shall be returned to you by mail without interest or deduction
as soon as practicable after the Expiration Date and after all pro-rations and
adjustments contemplated by the terms of the Rights Offering have been effected.
The Company will not issue any fractional Underlying Shares (or distribute
cash in lieu thereof). If the number of Rights exercised by you would result in
you receiving a fractional Underlying Share, the aggregate number of Underlying
Shares to be issued will be rounded up to the nearest whole number.
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2. Issuance of Common Stock.
The following deliveries and payments will be made to the address shown on
the face of your Rights Certificate unless you provide instructions to the
contrary in your Rights Certificate.
(a) Certificates for Shares of Common Stock. As soon as practicable
after the Expiration Date and the valid exercise of Rights, the Subscription
Agent will mail to each exercising Rights holder certificates representing
shares of Common Stock purchased pursuant to the Right. See "The Rights
Offering--Certificates for Shares of Common Stock" in the Prospectus.
(b) Excess Cash Payments. As soon as practicable after the Expiration
Date and after all pro-rations and adjustments contemplated by the terms of
the Rights Offering have been effected, the Subscription Agent will mail to
each Rights holder any Subscription Excess, without interest or deduction.
3. Sale or Transfer of Rights.
The Rights are not transferable in any way, except to affiliates of the
recipient and except by operation of law. Evidence satisfactory to the Company
that any such permitted transfer is proper must be delivered to the Company
prior to the Expiration Date by one of the methods described below:
By mail, by hand or by overnight courier to:
Harken Energy Corporation
Attention: Wayne Hennecke
580 WestLake Park Boulevard, Suite 600
Houston, Texas 77079
4. Execution.
(a) Execution by Registered Holder. The signature on the Rights
Certificate must correspond with the name of the registered holder exactly
as it appears on the face of the Rights Certificate without any alteration
or change whatsoever. Persons who sign the Rights Certificate in a
representative or other fiduciary capacity must indicate their capacity when
signing and, unless waived by the Subscription Agent in its sole and
absolute discretion, must present to the Subscription Agent satisfactory
evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Rights
Certificate is executed by a person other than the holder named on the face
of the Rights Certificate, proper evidence of authority of the person
executing the Rights Certificate must accompany the same unless, for good
cause, the Subscription Agent dispenses with proof of authority.
(c) Signature Guarantees. Your signature must be guaranteed by an
Eligible Institution if you specify special payment or delivery instructions.
5. Method of Delivery.
The method of delivery of Rights Certificates and payment of the
Subscription Price to the Subscription Agent will be at the election and risk
of the Rights holder, but, if sent by mail, it is recommended that such
certificates and payments be sent by registered mail, properly insured, with
return receipt requested, and that a sufficient number of days be allowed to
ensure delivery to the Subscription Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.
6. Special Provisions Relating to the Delivery of Rights Through the
Depository Trust Company.
In the case of Rights that are held of record through the Depository Trust
Company (the "Book-Entry Transfer Facility"), exercises of the Subscription
Right may be effected by instructing the Book-Entry Transfer
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Facility to transfer Rights from the Book-Entry Transfer Facility account of
such holder to the Book-Entry Transfer Facility account of the Subscription
Agent, together with certification as to the aggregate number of Rights
exercised and the number of Underlying Shares thereby subscribed for pursuant
to the Subscription Right by each beneficial owner of Rights on whose behalf
such nominee is acting, and payment of the Subscription Price for each share of
Common Stock subscribed for pursuant to the Subscription Right.
7. Substitute Form W-9.
Each Rights holder who elects to exercise Rights should provide the
Subscription Agent with a correct Taxpayer Identification Number (TIN) on
Substitute Form W-9. Copies of Substitute Form W-9 may be obtained upon request
from the Subscription Agent at the address or by calling the telephone number
indicated above. Failure to provide the information on the form may subject
such holder to a $50.00 penalty for each such failure and to 30% federal income
tax withholding with respect to dividends that may be paid by the Company on
shares of Common Stock purchased upon the exercise of Rights (for those holders
exercising Rights).
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