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EXHIBIT 10.1
HARKEN ENERGY CORPORATION
U.S.$40,000,000
6.5% Senior Convertible Notes Due 2000
TRUST INDENTURE
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TRUST INDENTURE dated as of July 30, 1996 ("Indenture"), between
HARKEN ENERGY CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), and MARINE MIDLAND
BANK, a banking corporation and trust company duly organized and existing under
the laws of the State of New York, as Trustee (herein called the "Trustee").
WHEREAS:
The Company has duly authorized the creation of an issue of up to U.S.
$40,000,000 of 6.5% Senior Convertible Notes Due 2000 and the Coupons, if any,
thereto appertaining (collectively, the "Notes") and to provide therefor the
Company has duly authorized the execution and delivery of this Indenture.
All things necessary have been done to make the Notes, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms.
The Trustee has agreed to act as trustee under this Indenture on the
terms and conditions set forth herein.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions.
"Act," when used with respect to any Noteholder, has the meaning
specified in Section 1.06.
"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 and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
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"Agent Members" has the meaning specified in Section 3.06.
"Alternative Stock Exchange" means any other national or regional
stock exchange or quotation service such as NASDAQ National Market System or
any similar quotation service maintained by the National Quotation Bureau or
any successor thereto.
"AMEX" means The American Stock Exchange, Inc. or any successor
thereto.
"Asset Value Coverage Ratio" means a ratio of (a) the sum of the value
of the Required Assets to (b) the aggregate principal amount of all Outstanding
Notes, as set forth in Section 10.13.
"Authenticating Agent" means the Person authorized pursuant to Section
6.14 to act on behalf of the Trustee to authenticate the Notes until a
successor Authenticating Agent shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Authenticating Agent"
shall mean such successor Authenticating Agent. Pursuant to the terms hereof,
Midland Bank Plc will initially act as the Authenticating Agent.
"Authorized Newspaper" means the Financial Times (European Edition) of
London, England. If such newspaper shall cease to be published, the Company or
the Trustee shall substitute for it another newspaper in Europe, customarily
published at least once a day for at least five (5) days in each calendar week,
of general circulation. If, because of temporary suspension of publication or
general circulation of such newspaper or for any other reason, it is impossible
or, in the opinion of the Company or the Trustee, impracticable to make any
publication of any notice required by this Indenture in the manner herein
provided, such publication or other notice in lieu thereof which is made by the
Company or the Trustee in the exercise of its reasonable discretion shall
constitute a sufficient publication of such notice.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is a day on which banking institutions in the City of New York,
New York, London, England and Lugano, Switzerland are not authorized or obliged
by law, regulation or executive order to close.
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"Capital Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated) of such
Person's capital stock whether now outstanding or issued on or after the date
of this Indenture, including, without limitation, all Common Stock and
Preferred Stock.
"Capitalized Lease Obligation" means the amount of the liability under
any capital lease that, in accordance with GAAP, is required to be capitalized
and reflected as a liability on the balance sheet.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, as in effect on the date hereof
and as amended or restated from time to time hereafter.
"Closing Date" means July 30, 1996.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted or, if at any time after the execution of this
Indenture such Commission is not existing, then the body performing similar
duties at such time.
"Common Depository" means the common depository appointed by Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System, and Cedel Bank, societe anonyme, which shall initially be
Midland Bank Plc, including the nominees and successors of any Common
Depository.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participation and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, and includes, without limitation, all
series and classes of such common stock.
"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" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, a Vice Chairman, its
President, or a Vice President, by its Treasurer or its Secretary, and
delivered to the Trustee.
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"Conversion Agent" means any Person (including the Company acting as
Conversion Agent) authorized by the Company to effect conversions of the Notes
on behalf of the Company. Pursuant to the terms hereof, the Company has
initially appointed Midland Bank Plc to act as the Principal Conversion Agent
and Banca del Gottardo to act as a Conversion Agent for the Notes.
"Conversion Date" means the Business Day on which the Conversion Right
is exercisable immediately following the Business Day on which the Conversion
Agent receives the Note surrendered for conversion and notice of a Noteholder's
intention to exercise its Conversion Right with respect to any Note and, if
applicable, any payment to be made or indemnity given pursuant to this
Indenture in connection with the exercise of such Conversion Right or in the
case of conversions pursuant to Section 11.09.
"Conversion Price" means $2.50, the price at which Conversion Shares
shall be issued upon conversion, subject to adjustment as set forth herein.
"Conversion Right" means the right of a Holder of any Note to convert
such Note into Conversion Shares.
"Conversion Shares" means the Shares into which the Notes are
convertible.
"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 execution of this Indenture is
located at 140 Broadway, New York, New York 10005-1180, except that with
respect to presentation of Notes for payment upon redemption, for conversion or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate agency business shall be conducted.
"Corporation" includes corporations, limited liability companies,
limited and general partnerships, associations, joint-stock companies and
business trusts.
"Coupon" means bearer interest Coupons relating to the Bearer Notes
and any replacement Coupons issued pursuant to Section 3.08.
"Couponholder" means a Person who is the bearer of any Coupon.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
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"Designated Oil and Gas Reserves" means 50% of the SEC Value of the
Proved Reserves of the Company and its Subsidiaries, of which at least 75% of
the SEC Value thereof must be PDP Reserves, which the parties for purposes of
clarification have agreed shall be equivalent to the lesser of (i) 50% of the
SEC Value of the Proved Reserves or (ii) 66.6% of the SEC Value of the PDP
Reserves as the same are reported in the Independent Reserve Report, with the
understanding that the result obtained by such methods of calculation shall be
the same in all cases.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extraordinary Resolution" means a resolution passed at a meeting of
the Noteholders duly convened and held in accordance with Section 6.13 hereof.
"Federal Bankruptcy Code" means the Bankruptcy Act or Title 11 of the
United States Code, as amended from time to time.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company in the preparation of its financial statements.
"Good Title" means, with respect to Oil and Gas Properties, good and
defensible title which is (i) evidenced by an instrument or instruments filed
of record in accordance with the conveyance and recording laws of the
applicable jurisdiction and is sufficient against competing claims of bona fide
purchasers for value without notice and (ii) free and clear of all Liens, other
than such Liens that a reasonably prudent purchaser of Oil and Gas Properties
would accept in light of the value of the Oil and Gas Property affected, the
improbability of assertion of the defect or irregularity or the degree of
difficulty or the cost of performing curative work.
"Group" means the Company and all its Principal Subsidiaries.
"Guaranty" means all obligations of any Person (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any Indebtedness, dividend or other obligation, of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including
without limitation all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor,
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or (ii) to advance or supply funds (1) for the purchase or payment of such
Indebtedness or obligation, or (2) to enable the recipient of such funds to
maintain certain financial conditions (e.g. agreed amount of working capital)
under loan or similar documents, or (iii) to lease Property or to purchase
securities or other Property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made
under this Indenture, a Guaranty in respect of any Indebtedness shall be deemed
to be Indebtedness equal to the principal amount and accrued interest of such
Indebtedness which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or
dividend.
"Holder" means a Person who is a bearer of a Note or Coupon, as the
case may be.
"Hydrocarbon Interests" means all rights, titles, interests and
estates in and to oil and gas leases, oil, gas and mineral leases, oil and gas
concession agreements, production sharing and similar agreements, or other
liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty
and royalty interests, net profit interests and production payment interests,
or which may arise under operating agreements, unit agreements or other
contract rights, including any reserved or residual interests of whatever
nature and without regard to whether such rights cover or exist with respect to
lands located within or without the United States.
"Hydrocarbons" means oil, gas, casing head gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all products refined therefrom and all other minerals.
"Indebtedness" of any Person means and includes all present and future
obligations of such Person, which shall include all obligations (i) which in
accordance with generally accepted accounting principles in the United States
shall be classified upon a balance sheet of such Person as liabilities of such
Person, (ii) for borrowed money, (iii) which have been incurred in connection
with the acquisition of Property (including, without limitation, all
obligations of such Person evidenced by any debenture, bond, note, commercial
paper or other similar security, but excluding, in any case, obligations
arising from the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection), (iv) secured by any Lien existing on
Property owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations, (v) created or arising under
any conditional sale or other title retention agreement with respect to
Property acquired by such Person, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event of
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default are limited to repossession or sale of such Property, (vi) Capitalized
Lease Obligations, (vii) for all Guaranties, whether or not reflected in the
balance sheet of such Person and (viii) all reimbursement and other payment
obligations (whether contingent, matured or otherwise) of such Person in
respect of any acceptance or documentary credit. Notwithstanding the
foregoing, Indebtedness shall not include (i) Indebtedness incidental to the
operation of the business of the Person in the ordinary course and in the
aggregate not material to the business and operations of the Person, (ii)
Indebtedness for which the Company or any of its Subsidiaries are the sole
obligors and obligees, and (iii) Indebtedness represented by purchase, rental
or lease obligations not to exceed $1,000,000 in any period of 12 months for
any Person and its Subsidiaries.
"Indenture" means this instrument as originally executed and 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.
"Independent Reserve Report" means an independent reservoir
engineering report or other independent third party valuation of the Company's
and its Subsidiaries' Oil and Gas Properties which are used in determining the
Asset Value Coverage Ratio, which report shall be dated as of the end of the
Company's most recent fiscal year or as of a later date, at the Company's
option.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Notes.
"Lien" means any mortgage, charge, pledge, lien, security interest or
encumbrance of any kind whatsoever, including any interest in Property securing
an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or
contract, and including but not limited to the security interest lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this Indenture, the
Company or its Subsidiary shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, financing
lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.
"Mandatory Conversion" means conversion of the Notes at the option of
the Company pursuant to Section 12.11.
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"Mandatory Conversion Date" means the date specified in a notice
published by the Company in accordance with Sections 1.07, 1.08 and 12.11, on
which the Noteholders are required to surrender their Notes for conversion.
"Market Price" means the daily closing sale price of the Common Stock
for a Stock Exchange Business Day.
"Marketable Securities" means any "security" (as such term is defined
in Section 2(1) of the Securities Act) of any Person listed, admitted to
trading or quoted on the New York Stock Exchange, the AMEX or Alternative Stock
Exchange.
"Maturity," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or the Redemption Date and whether by
declaration of acceleration, call for redemption or otherwise.
"Noteholder" means a Person who is the bearer of any Note.
"Notes" has the meaning stated in the first recital of this Indenture
and more particularly means any Notes authenticated and delivered under this
Indenture.
"Offering Circular" means that certain Offering Circular dated July
30, 1996, together with all supplements and amendments thereto.
"Officers' Certificate" means a certificate signed by the Chairman, 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. Any one individual holding the requisite titles
may sign and deliver an Officers' Certificate without cosignature of another
individual with a requisite title.
"Oil and Gas Properties" means Hydrocarbon Interests; any Properties
now or hereafter pooled or unitized with Hydrocarbon Interests; all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any governmental body or agency
having jurisdiction) which may affect all or any portion of the Hydrocarbon
Interests; all operating agreements, contracts and other agreements which
relate to any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests; all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, the lands covered thereby and all
oil in tanks and all
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rents, issues, profits, proceeds, products, revenues and other income from or
attributable to the Hydrocarbon Interests; all tenements, hereditaments,
appurtenances and Properties in anywise appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests, Properties, rights, titles, interests
and estates described or referred to above, including any and all Property,
real or personal, now owned or hereafter acquired and situated upon, used, held
for use or useful in connection with the operating, working or development of
any of such Hydrocarbon Interests (excluding drilling rigs, automotive
equipment or other personal property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, buildings,
structures, fuel separators, liquid extraction plants, plant compressors,
pumps, pumping units, field gathering systems, tanks and tank batteries,
fixtures, valves, fittings, machinery and parts, engines, boilers, meters,
apparatus, equipment, appliances, tools, implements, cables, wires, towers,
casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacement, accessions
and attachments to any and all of the foregoing.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Notes, means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except: (1) Notes heretofore cancelled by the Paying and Conversion
Agent or delivered to the Paying and Conversion Agent for cancellation; (2)
Notes, or portions thereof, for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Notes; provided that, if such Notes 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; (3) Notes, except to the extent
provided in Sections 13.02 and 13.03, with respect to which the Company has
effected defeasance and/or covenant defeasance as provided in Article Thirteen;
and (4) Notes which have been paid pursuant to Section 3.08 or in exchange for
or in lieu of which other Notes have been authenticated and delivered pursuant
to this Indenture, other than any such Notes in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Notes are
held by a bona fide purchaser in whose hands the Notes are valid obligations of
the Company; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Notes have taken any Act or given or
made any Extraordinary Resolution or other request, demand, authorization,
direction, consent, notice or waiver hereunder, Notes owned by the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee
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shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, consent, notice or waiver, only
Notes which the Trustee knows to be so owned shall be so disregarded. Notes so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of or interest on
any Notes on behalf of the Company. Pursuant to the terms hereof, the Company
has initially appointed Midland Bank Plc as the principal Paying Agent and
Banca del Gottardo as a Paying Agent.
"Permitted Investments" means:
(a) cash;
(b) U.S. Government Obligations;
(c) any certificate of deposit, time deposit, money
market account or bankers' acceptance, maturing not more than sixty
days after the date of acquisition, issued by any commercial banking
institution that is a member of the Federal Reserve System, including,
without limitation, the Trustee and its Affiliates, and that has
combined capital and surplus and undivided profits of not less than
$500,000,000 whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or
higher) according to Standard and Poor's Ratings Group or any
successor rating agency;
(d) commercial paper, maturing not more than sixty days
after the date of acquisition, issued by any corporation (other than
an Affiliate of any of the Obligors) organized and existing under the
laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according
to Moody's Investors Service, Inc. or any successor rating agency, or
"A-1" (or higher) according to Standard and Poor's Ratings Group or
any successor rating agency; and
(e) shares of any mutual fund, including one managed by
the Trustee or any of its Affiliates, that invests exclusively in the
foregoing types of investment; provided that, solely for purposes of
this clause (e), such investments may mature more than sixty days
after the date of acquisition.
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"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.08 in exchange for or in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participation or other equivalents (however designated) of
such Person's preferred or preference stock whether now outstanding or issued
on or after the date of this Indenture, and includes, without limitation, all
classes and series of preferred or preference stock.
"Presentation Date" means the date on which a Note is presented by a
Noteholder for payment of principal or a Coupon is presented by the
Couponholder for payment of interest, as the case may be.
"Principal Paying and Conversion Agent" means any Person authorized by
the Company to act as the principal paying and conversion agent for the Notes
until a successor Principal Paying and Conversion Agent shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Principal Paying and Conversion Agent" shall mean such successor Principal
Paying and Conversion Agent. Pursuant to the terms hereof, the Company has
initially appointed Midland Bank Plc as the Principal Paying and Conversion
Agent.
"Principal Subsidiary" means a Subsidiary of the Company:
(a) whose gross assets represent 10 percent or more of
the consolidated gross assets of the Group as calculated by reference
to the then latest audited financial statements of the Group; or
(b) to which is transferred all or substantially all of
the business, undertaking and assets of a Subsidiary of the Company
which immediately prior to such transfer is a Principal Subsidiary,
whereupon the transferor Subsidiary shall immediately cease to be a
Principal Subsidiary and the transferee Subsidiary shall cease to be a
Principal Subsidiary under the provisions of this sub-paragraph (b)
(but without prejudice to the provisions of sub-paragraph (a) above),
upon publication of its next audited financial statements.
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"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, and including any
Oil and Gas Property.
"PDP Reserves" means those Proved Reserves that can be expected to be
recovered from currently producing zones under the continuation of present
operating methods, all as set forth in the Independent Reserve Report.
"Proved Reserves" means the estimated quantities of crude oil, natural
gas and natural gas liquids, which geological and engineering data demonstrate
according to engineering standards to be recoverable in future years from known
reservoirs under existing economical and operating conditions, located in the
United States or in territories or regions controlled by the United States,
including any territorial waters, all as set forth in the Independent Reserve
Report.
"Redemption Date," when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to the terms hereof plus
accrued interest to the Redemption Date.
"Regulation S" means Regulation S under the Securities Act as in
effect of the date hereof.
"Relevant Date" means the date on which the payment first becomes due;
provided, that if the full amount of the money payable has not been received by
the Principal Paying Agent or the Trustee on or before the due date, it shall
mean the date on which, the full amount of the money having been so received,
notice to that effect shall have been duly given to the Noteholders by the
Company in accordance with Section 1.08.
"Required Assets" means any combination of (i) 100% of the aggregate
amount then on deposit in the Segregated Account, including the aggregate
amount invested in Permitted Investments, to the extent applicable, (ii) 60% of
the aggregate Market Price of the Company's and its Subsidiaries' Marketable
Securities, and (iii) the Designated Oil and Gas Reserves.
"Responsible Officer," when used with respect to the Trustee, means
any trust officer or assistant trust officer or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above-designated officers, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
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"Restricted Period" means the forty (40) calendar day period after the
Closing Date.
"SEC Value" means the discounted present value of future net reserves
attributable to Proved Reserves, as calculated under the Independent Reserve
Report in accordance with the rules and regulations promulgated by the
Commission from time to time in effect.
"Securities Act" means the Securities Act of 1933, as amended.
"Segregated Account" means a segregated non-interest bearing trust
account of the Company to be maintained with the Trustee and invested and
reinvested at the direction of the Company, until such time as it may be
distributed to the Company in accordance with Section 6.12.
"Shares" means the common stock, par value U.S.$0.01, of the Company
(and all other (if any) shares or stock resulting from any sub-division,
consolidation or reclassification of such shares).
"Stated Maturity," when used with respect to any Indebtedness or any
instalment of principal thereof or interest thereon, means the date specified
in such Indebtedness as the fixed date on which the principal of such
Indebtedness or such instalment of principal or interest is due and payable.
"Stock Exchange Business Day" means any day (other than a Saturday or
Sunday) on which the AMEX or the Alternative Stock Exchange, as the case may
be, is open for business.
"Subordinated Obligation" means any Indebtedness of the Company
outstanding on such date which is contractually subordinate or junior in right
of payment to the Notes. Notwithstanding the immediately preceding sentence,
any Indebtedness and shares of Preferred Stock issued by any Subsidiary shall,
for purposes of this definition, be treated as Subordinated Obligations.
"Subsidiary" of any Person means any Corporation of which at least a
majority of the shares of stock having by the terms thereof ordinary voting
power to elect a majority of the Board of Directors of such Corporation
(irrespective of whether or not at the time stock of any other class or classes
of such Corporation shall have or might have voting power by reason of the
happening of any contingency) is directly or indirectly owned or controlled by
any one of or any combinations of the Company or one or more of the Principal
Subsidiaries.
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"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unexercised Note" means any Note with respect to which Conversion
Rights have not been exercised by the Noteholder.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such 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 U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Person" means any Person who is a "U.S. person" as defined in
Regulation S.
"Vice President," when used with respect to 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" of any Person means Capital Stock of such Person which
ordinarily is entitled (without regard to the occurrence of any additional
event or contingency) to vote for the election of directors (or persons
performing similar functions) of such Person.
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
Agency Agreement 10.02
Bearer Notes 2.01
Commencement Date 12.04
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Covenant defeasance 13.03
Current Event 12.04
Expiration Time 12.04
Global Note 2.01
legal defeasance 13.02
Notice 1.08
Other Event 12.04
Reference Date 12.04
SECTION 1.03 Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) all 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 accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(c) all ratios and computations based on GAAP contained
in this Indenture shall be computed in accordance with the definition
of GAAP set forth above;
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision of this
Indenture;
(e) "or" is not exclusive;
(f) all references to $, U.S.$, dollars or United States
dollars shall refer to the lawful currency of the United States of
America;
(g) provisions apply to successive events and
transactions;
(h) all references to Sections or Articles refer to
Sections or Articles of this Indenture unless otherwise indicated; and
(i) all references to Terms or Conditions refer to the
Terms and Conditions of the Notes unless otherwise indicated.
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SECTION 1.04 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall, with
respect to any application or request to make an optional redemption or
Mandatory Conversion and, upon the request of the Trustee with respect to any
other application or request, furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, such individual has made such examination or investigation
as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.05 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
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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 Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.06 Acts of Noteholders.
(a) Any Extraordinary Resolution, request, demand,
authorization, direction, declaration, notice, consent, waiver or
other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders
in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and
conclusive in favour of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to such witness, notary public or other such officer the
execution thereof. Where such execution
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is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the
execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
(c) Any Extraordinary Resolution, request, demand,
authorization, direction, notice, consent, waiver or other Act of the
Holders of any Note shall bind every future Holder of the same Note
and the Holder of every Note issued upon conversion or redemption
thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is
made upon such Note.
SECTION 1.07 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, declaration, notice,
consent, waiver, Extraordinary Resolution or Act of Noteholders or other
document provided or pertained by this Indenture (herein collectively called
"Notice") to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Noteholder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee and received at its Corporate
Trust Office, Attention: Corporate Trust Services - Harken, Tel. (212)
658-1000, Fax. (212) 658-6425, or
(b) the Company by the Trustee or by any Noteholder shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing to
or with the Company addressed to it at the address of its principal
office which shall initially be: Harken Energy Corporation, 5605 North
MacArthur Boulevard, Suite 400, Irving, Texas 75038, Attention: Bruce
N. Huff, Senior Vice President and Chief Financial Officer, Tel. (214)
753-6939, Fax. (214) 753-6926, with a copy to Larry E. Cummings,
General Counsel, Tel. (214) 753-6932, Fax. (214) 753-6963.
Any Notice to be given hereunder by any party to another shall be in
writing and in English (by letter, telex or fax) delivered in person or by
courier service requiring acknowledgment of delivery, mailed by first class
mail, postage prepaid, or sent by fax or telex to the addressee (including
telecopier number, if applicable) set forth herein. Except for notices to the
Trustee, Notice given by mail, fax, personal delivery or courier service shall
be effective upon actual receipt. Notice given by telex shall be effective
upon receipt by the sender of the addressee's
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answer-back at the end of transmission, provided that any such notice or other
communication which would otherwise take effect after 4:00 p.m. on any
particular day shall not take effect until 10:00 a.m. on the immediately
succeeding Business Day in the place of the addressee. A party may change any
address to which Notice is to be given to it by giving Notice as provided above
of such change of address.
SECTION 1.08 Notice to Noteholders; Waiver.
Where this Indenture provides for notice of any event to Noteholders
by the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if published in an Authorised Newspaper.
Neither the Trustee nor the Company need give any notice to the Couponholders
and such Couponholders will be deemed to have notice of the contents of any
notice given to the Noteholders in accordance with this Section.
In case by reason of any cause it shall be impracticable to publish
notice of any event to the Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall constitute a sufficient
notification for every purpose hereunder.
SECTION 1.09 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 1.10 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.11 Separability Clause.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions, to the extent permitted by law, shall not in any way
be affected or impaired thereby.
SECTION 1.12 Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Conversion Agent and their respective
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successors hereunder, and the Noteholders any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.13 Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.14 Legal Holidays.
In any case where any Interest Payment Date, Conversion Date,
Redemption Date or Stated Maturity or Maturity of any Note or Coupon shall not
be a Business Day, then (notwithstanding any other provision of this Indenture
or of the Notes or Coupons) payment of interest or principal or any other
payment required to be made on such date need not be made on such date, but
shall be made on the immediately following Business Day with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity or Maturity.
ARTICLE TWO
FORMS OF THE NOTES
SECTION 2.01 Forms Generally.
The Notes and the Trustee's certificate of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required by applicable law or rules or regulations thereunder or as may,
consistently herewith, be determined by the officer or officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text
of any Note may be set forth on the reverse thereof.
The definitive Notes shall be typed, printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner as determined
by the officers of the Company executing such Notes, as evidenced by their
execution in accordance with Section 3.03 of such Notes.
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The Notes shall be known as the "6.5% Senior Convertible Notes Due
2000" of the Company. The Notes and the Trustee's certificate of
authentication shall be in substantially the form annexed hereto as Exhibit A.
The Company shall approve the form of the Notes and any notation, legend or
endorsement on the Notes. Each Note shall be dated as of July 30, 1996.
The terms and provisions contained in the form of the Bearer Notes
annexed hereto as Exhibit A and in the form of the Global Note annexed hereto
as Exhibit B shall constitute, and are hereby expressly made, a part of this
Indenture. To the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
The Notes shall be issued initially in the form of a temporary global
bearer note substantially in the form set forth in Exhibit B (the "Global
Note") deposited with the Common Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Note may from time to time be decreased by adjustments
made on the records of the Common Depository or its nominee, as hereinafter
provided.
The Notes offered and sold, other than as described in the preceding
paragraph, shall be issued in form of permanent certificated Notes in bearer
form in substantially the form set forth in Exhibit A (the "Bearer Notes").
The Terms and Conditions contained in the form of the Bearer Notes
annexed hereto as Exhibit A are expressly incorporated by reference herein. To
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby. To the extent of any conflict between the Terms and
Conditions and the provisions of this Indenture, the Terms and Conditions shall
control the interpretation of the terms of the Note and this Indenture.
SECTION 2.02 Restrictive Legends.
Each Bearer Note and each Coupon shall bear the following legend on
the face thereof:
NEITHER THIS NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE HAVE BEEN OR WILL BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, CONVERTED OR
OTHERWISE DISPOSED OF IN THE UNITED
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STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY "U.S. PERSON" (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) UNLESS THIS NOTE AND
THE SHARES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS ARE AVAILABLE.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE U.S. INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
Each Global Note shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, CONVERTED OR OTHERWISE
DISPOSED OF IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, ANY "U.S. PERSON" (AS DEFINED IN REGULATION S UNDER THE SECURITIES
ACT) UNLESS THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF SUCH LAWS ARE AVAILABLE.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE U.S. INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
ARTICLE THREE
THE NOTES
SECTION 3.01 Terms.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $40,000,000, except for Notes
authenticated and delivered in exchange for, or in lieu of, other Notes
pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.08, 9.05 or 11.08.
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Their Stated Maturity shall be July 30, 2000, and they shall bear interest at
the rate per annum specified therein from the Closing Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, payable in arrears, and thereafter as provided in the Notes and at said
Stated Maturity, until the principal thereof is paid or duly provided for.
The principal of and interest on the Notes shall be payable at the
office or agency of the Company maintained for such purpose in The City of
London, or at such other office or agency of the Company as may be maintained
for such purpose.
The Notes shall be convertible as provided in Article Twelve.
The Notes shall be redeemable as provided in Article Eleven.
The Notes shall be senior in right of payment to Subordinated
Obligations as provided in Article Fourteen.
SECTION 3.02 Denominations.
The Notes shall be issuable only in bearer form and, in the case of
Bearer Notes, with Coupons attached thereto, and shall be issuable only in
denominations of $50,000.
SECTION 3.03 Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Company by its Chairman,
a Vice Chairman, its President or a Vice President under a facsimile of its
corporate seal reproduced thereon and attested by its Secretary or an Assistant
Secretary. The signature of any of these officers on the Notes may be manual
or facsimile signatures of the present or any future such authorized officer
and may be imprinted or otherwise reproduced on the Notes.
Notes 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 Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee or the
Authenticating Agent in accordance with such Company Order shall authenticate
and deliver such Notes. Such Company Order shall specify the amount of Notes
to be authenticated and the date
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on which the original issue of Notes is to be authenticated. The aggregate
principal amount of Notes outstanding at any time may not exceed $40,000,000
except for Notes authenticated and delivered in exchange for, or in lieu of,
other Notes pursuant to Section 3.04, 3.05 or 3.08.
Each Note shall be dated as of July 30, 1996.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee or the Authenticating Agent by manual or
facsimile signature of an authorized officer, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder and is entitled to the benefits
of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee or an Authenticating Agent, upon
Company Request of the successor Person, shall authenticate and deliver Notes
as specified in such request for the purpose of such exchange.
SECTION 3.04 Temporary Notes.
Pending the preparation of definitive Notes, but in no event prior to
September 9, 1996, the Company may execute, and upon Company Order the Trustee
or an Authenticating Agent shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay, but in no event prior to September
9, 1996. After the preparation of
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definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Company designated for such purpose pursuant to Section 10.02, without charge
to the Noteholder. Upon surrender for cancellation of any one or more
temporary Notes, the Company shall execute and the Trustee or an Authenticating
Agent shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged,
the temporary Notes shall in all respects be entitled to the same benefits
under this Indenture as definitive Notes.
SECTION 3.05 Exchange.
Upon surrender for exchange of any Note at the office or agency of the
Company designated pursuant to Section 10.02, the Company shall execute, and
the Trustee or the Authenticating Agent shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of the Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interest in such Global
Note may be effected only through a book-entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Global Note shall be required to be reflected in a book entry.
At the option of the Noteholder, Notes may be exchanged for other
Notes of the Authorized Denomination and of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee or an Authenticating Agent shall authenticate and deliver, the Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any exchange of Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such exchange.
Every Note presented or surrendered for exchange shall (if so required
by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer, in form satisfactory to the Company and the Trustee,
duly executed by the Noteholder thereof or such Noteholder's attorney duly
authorized in writing.
No service charge shall be made for any exchange, conversion or
redemption of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental
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charge that may be imposed in connection with any exchange of Notes, other than
exchanges pursuant to Sections 3.03, 3.04, 3.05, 3.06, 9.05, or 11.08.
The Company shall not be required (i) to issue or exchange any Note
during a period beginning at the opening of business 15 days before the
selection of Notes to be redeemed under Section 11.04 and ending at the close
of business on the day of such mailing of the relevant notice of redemption,
(ii) to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part or (iii) to
register the transfer of or exchange of any Note during a period beginning five
days before the date of Maturity and ending on such date of Maturity.
SECTION 3.06 Book-Entry Provisions for Global Note.
(a) The Global Note initially shall be delivered to the
Common Depository and shall bear the legends set forth in Section
2.02. Members of, or participants in, Euroclear and Cedel ("Agent
Members") shall have no rights under this Indenture with respect to
any Global Note held on their behalf by the Common Depository, or
under the Global Note, and the Common Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other
authorization furnished by the Common Depository or shall impair, as
between the Common Depository and the Agent Members, the operation of
customary practices governing the exercise of the rights of a
Noteholder.
(b) Transfers of the Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Common
Depository, its successors or their respective nominees. Interests of
beneficial owners in the Global Note may be transferred in accordance
with the rules and procedures of the Common Depository and the
provisions of Section 3.06. Beneficial owners may obtain Bearer Notes
in exchange for their beneficial interests in the Global Note upon
request in accordance with the Common Depository's procedures. In
addition, Bearer Notes shall be transferred to all beneficial owners
in exchange for their beneficial interests in the Global Note if (i)
the Common Depository notifies the Company that it is unwilling or
unable to continue as Common Depository for the Global Note and a
successor depository is not appointed by the Company within 90 days of
such notice or (ii) an Event of Default has occurred and is continuing
and the Trustee has received a request from the Common Depository.
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(c) In connection with any transfer of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant
to subsection (b) of this Section, the Common Depository shall reflect
on its books and records the date and a decrease in the principal
amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and
the Company shall execute, and the Trustee or an Authenticating Agent
shall authenticate and deliver, one or more Bearer Notes of like tenor
and amount.
(d) In connection with the transfer of the entire Global
Note to beneficial owners pursuant to subsection (b) of this Section,
the Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee or an
Authenticating Agent shall authenticate and deliver, to each
beneficial owner identified by the Common Depository in exchange for
its beneficial interest in the Global Note, an equal aggregate
principal amount of Bearer Notes of authorized denominations.
(e) Any Bearer Note delivered in exchange for an interest
in the Global Note pursuant to subsection (b) or subsection (c) of
this Section shall bear the applicable legend regarding transfer
restrictions applicable to the Bearer Note set forth in Section 2.02.
(f) The Holder of the Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action
which a Noteholder is entitled to take under this Indenture or the
Notes.
(g) Any Bearer Note delivered in exchange for an interest
in the Global Note pursuant to subsection (b) or (c) of this Section
will prior to delivery to the Noteholder have all matured Coupons as
of such delivery date, which are attached to such Bearer Note,
cancelled and voided by the Authenticating Agent.
(h) Nothing contained herein shall be deemed to authorize
any transfers (by book-entry or otherwise) of the Global Note prior to
September 9, 1996, it being understood that no transfers of the Global
Note or any beneficial interest may occur until after September 9,
1996.
SECTION 3.07 Special Transfer Provisions.
The Noteholders by acceptance of the Notes hereby covenant and agree
that neither the Notes nor the Conversion Shares will be offered, sold,
transferred, pledged, converted or otherwise disposed of in the United States
or to, or for the account or benefit of, any U.S. Person
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unless the Notes and the Conversion Shares have been registered under the
Securities Act and any applicable state securities or blue sky laws or
exemptions from the registration requirements of such laws are available.
SECTION 3.08 Mutilated, Destroyed, Lost and Stolen Notes.
If (i) any mutilated Note or Coupon is surrendered to the Trustee or
the Authenticating Agent, or (ii) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Note or Coupon,
and there is delivered to the Company and the Trustee such security and/or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company or the Trustee that such Note or Coupon
has been acquired by a bona fide purchaser, the Company shall execute and upon
Company Order the Trustee or an Authenticating Agent shall authenticate and
deliver, in exchange for any such mutilated Note or Coupon or in lieu of any
such destroyed, lost or stolen Note or Coupon, a new Note or Coupon of like
tenor and principal amount, bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Note or Coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note or Coupon, pay such Note or Coupon, as the
case may be.
Upon the issuance of any new Note or Coupon 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 and the Authenticating
Agent) connected therewith.
Every new Note or Coupon issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note or Coupon shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note or Coupon shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes or Coupons duly issued hereunder.
The provisions of this Section are 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 Note or Coupon.
Any new Note issued under this Section 3.08 in lieu of any destroyed,
lost or stolen Note shall be issued by the Authenticating Agent with all
matured Coupons as of such date of issuance cancelled or voided.
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SECTION 3.09 Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall be paid to the bearer against
presentation and surrender (or in the case of part payment only, endorsement)
of the relevant Coupons, outside of the United States at the corporate trust
office or agency of any Paying Agent maintained for such purpose pursuant to
Section 10.02.
Each such payment will be made at the specified office of any Paying
Agent, at the option of the Holder of such Coupon, by U.S. dollar cheque drawn
on, or by transfer to a U.S. dollar account maintained by the payee with a bank
in Europe subject in all cases to any applicable fiscal or other laws and
regulations.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture in exchange for or in lieu of any other Note
shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Note.
SECTION 3.10 Persons Deemed Owners.
Subject to the provision of Section 3.14 and except with respect to
any unmatured Coupon, the Company, the Trustee and any agent of the Company or
the Trustee may treat the Person who is the bearer of any Note or Coupon as the
owner of such Note or Coupon for the purpose of receiving payment of principal
of and (subject to Sections 3.05 and 3.09) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.11 Cancellation.
All Notes surrendered for payment, conversion, redemption or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Notes previously authenticated hereunder
which the Company has not issued and sold, and all Notes so delivered shall be
promptly cancelled by the Trustee. If the Company shall so acquire any of the
Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Paying and Conversion Agent for cancellation. No
Notes
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shall be authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Notes held by the Paying and Conversion Agent shall be disposed of by
the Paying and Conversion Agent in accordance with its customary procedures and
certification of their disposal delivered to the Company unless by Company
Order the Company shall direct that cancelled Notes be returned to it.
SECTION 3.12 Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 3.13 ISIN, CUSIP Or Other Identifying Numbers.
The Company in issuing the Notes may use "ISIN", "CUSIP" or other
identifying numbers (if then generally in use), and the Trustee shall use ISIN,
CUSIP or other identifying numbers in notices of redemption, conversion or
exchange, and any other notice provided for the benefit of the Noteholders, as
a convenience to Noteholders; provided that any such notice shall state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of redemption, conversion or
exchange or other notice.
SECTION 3.14 Prescription.
Notes and Coupons will become void unless presented for payment within
periods of ten (10) years (in the case of principal) and five (5) years (in the
case of interest) from the Relevant Date in respect of the Notes or the
Coupons, as the case may be, subject to the provisions of Section 11.09.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.01 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of conversion or redemption of Notes
herein expressly provided for and the Company's obligations to the Trustee
pursuant to Section 6.06) and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when
(a) either
(i) all Notes theretofore authenticated and
delivered (other than (1) Notes which have been destroyed, lost,
mutilated or stolen and which have been replaced or paid as provided
in Section 3.08 and (2) Notes for whose payment money has theretofore
been deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
10.03) have been delivered to the Trustee for cancellation; or
(ii) all such Notes not theretofore delivered to
the Trustee for cancellation (1) have become due and payable, or (2)
will become due and payable at their Stated Maturity, within one year,
or (3) 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 has irrevocably deposited or caused to be
deposited with the Trustee as trust funds, which may include any
amount then held in the Segregated Account which the Company
designates to the Trustee shall be used for such purpose, in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such
deposit (in the case of Notes which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
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(c) the Company 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 have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.06 and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section, the obligations of the Trustee under Section 4.02 and the
last paragraph of Section 10.03 shall survive.
SECTION 4.02 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes 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 Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Fourteen or 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) which shall have occurred and is
continuing:
(a) if default is made for a period of five Business Days
or more in the payment of interest or principal due in respect of the
Notes or any of them; or
(b) if the Company fails to perform or observe any of its
other obligations, covenants, conditions or provisions under the Notes
or this Indenture and (except where the Trustee shall have certified
to the Company that it considers such failure to be incapable of
remedy in which case no such notice or continuation as is hereinafter
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mentioned will be required) such failure continues for the period of
30 calendar days (or such longer period as the Trustee may in its
absolute discretion permit) next following the service by the Trustee
on the Company of notice requiring the same to be remedied; or
(c) if (i) any other Indebtedness of the Company or any
Principal Subsidiary becomes due and payable prior to its Stated
Maturity by reason of an event of default (howsoever defined) or (ii)
any such Indebtedness of the Company or any Principal Subsidiary is
not paid when due or, as the case may be, within any applicable grace
period or (iii) the Company or any Principal Subsidiary fails to pay
when due (or, as the case may be, within any applicable grace period)
any amount payable by it under any present or future guarantee for, or
indemnity in respect of, any Indebtedness of any Person or (iv) any
security given by the Company or any Principal Subsidiary for any
Indebtedness of any Person or any guarantee or indemnity of
Indebtedness of any Person by the Company or any Principal Subsidiary
becomes enforceable by reason of default in relation thereto and steps
are taken to enforce such security save in any such case where there
is a bona fide dispute as to whether the relevant Indebtedness or any
such guarantee or indemnity as aforesaid shall be due and payable
(following any applicable grace period), provided that in each such
case the Indebtedness exceeds in the aggregate U.S.$1,000,000 and in
each such case such event continues unremedied for a period of 30
calendar days (or such longer period as the Trustee may in its sole
discretion consent to in writing upon receipt of written notice from
the Company); or
(d) if the Company or any Principal Subsidiary shall
generally fail to pay its debts as such debts come due (except debts
which the Company or such Principal Subsidiary, as the case may be,
may contest in good faith generally) or shall be declared or
adjudicated by a competent court to be insolvent or bankrupt, shall
consent to the entry of an order of relief against it in an
involuntary bankruptcy case, shall enter into any assignment or other
similar arrangement for the benefit of its creditors or shall consent
to the appointment of a custodian (including, without limitation, a
receiver, liquidator or trustee); or
(e) if a receiver, administrative receiver, administrator
or other similar official shall be appointed in relation to the
Company or any Principal Subsidiary or in relation to the whole or a
substantial part of the undertaking or assets of any of them or a
distress, execution or other process shall be levied or enforced upon
or sued out against, or an encumbrancer shall take possession of, the
whole or a substantial part of the assets of any of them and in any
of the foregoing cases is not paid out or discharged within 90
calendar days (or such longer period as the Trustee may in its
absolute discretion consent to in writing upon receipt of written
notice from the Company); or
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(f) if the Company or any Principal Subsidiary institutes
proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking organization under the laws of
the Federal Bankruptcy Code or any similar applicable U.S. federal or
state law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or liquidator or
trustee or assignee (or other similar official) in bankruptcy or
insolvency of it or its property, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they come due; or
(g) if a decree or order by a court having jurisdiction
in the premises shall have been entered adjudging the Company or any
Principal Subsidiary a bankrupt or insolvent, or approving as properly
filed a petition seeking the reorganisation of the Company or any
Principal Subsidiary under the Federal Bankruptcy Code or any other
similar applicable U.S. federal or state law, and such decree or order
shall have continued undischarged or unstayed for a period of 90
calendar days; or a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver or liquidator or
trustee or assignee (or other similar official) in bankruptcy or
insolvency of the Company or any Principal Subsidiary or of all or
substantially all of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and such decree
or order shall have continued undischarged and unstayed for a period
of 90 calendar days; or
(h) if a warranty, representation, or other statement
made by or on behalf of the Company contained in this Indenture, the
Notes or any certificate or other agreement furnished in compliance
with such documents is false in any material respect when made and
(except where the Trustee shall have certified to the Company that it
considers such falsity to be incapable of remedy, in which case no
such notice or continuation as is hereinafter mentioned will be
required) such falsity continues for a period of 30 calendar days (or
such longer period as the Trustee may in its absolute discretion
permit) next following the service by the Trustee on the Company of
notice requiring the same to be remedied; or
(i) if there is any final judgment or judgments for the
payment of money exceeding in the aggregate U.S.$1,000,000 outstanding
against the Company or any Principal Subsidiary which has been
outstanding for more than 60 calendar days from the date of its entry
and shall not have otherwise been discharged in full or stayed by
appeal, bond or otherwise.
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SECTION 5.02 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.01(f) or 5.01(g)) occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Notes may, and the Trustee upon the request of the Holders of not
less than 25% in principal amount of the Outstanding Notes shall, declare the
principal amount of all the Notes to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Noteholders),
and upon any such declaration such principal amount shall become immediately
due and payable.
If an Event of Default specified in Section 5.01(f) or 5.01(g) occurs
and is continuing, then the principal amount of all the Notes shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Noteholder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Notes, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(i) all overdue interest on all Outstanding
Notes,
(ii) all unpaid principal of any Outstanding Notes
which has become due otherwise than by such declaration of
acceleration, and interest on such unpaid principal at the
rate prescribed therefor in the Notes,
(iii) to the extent that payment of such interest
is legally enforceable, interest on overdue interest at the
rate prescribed therefor in the Notes, and
(iv) 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
(b) all Events of Default, other than the non-payment of
amounts of principal of or interest on Notes which have become due
solely by such declaration of acceleration, have been cured or waived
as provided in Section 5.13.
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No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if
(a) default is made in the payment of any instalment of
interest on any Note when such interest becomes due and payable and
such default continues for a period of five Business Days, or
(b) default is made in the payment of the principal of
any Note at the Maturity thereof and such default continues for a
period of five Business Days,
the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal and interest, and interest on any overdue principal
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue instalment of interest, at the rate prescribed therefor in the
Notes, and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04 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 or any other obligor upon the Notes
or the property of the
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Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Notes 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 for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Noteholders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Noteholder 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
Noteholders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Noteholder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
SECTION 5.05 Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Noteholders in respect of which such judgment has been
recovered.
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SECTION 5.06 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 interest,
upon presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.06;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07 Limitation on Suits.
No Noteholder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Noteholder has previously given written notice
to the Trustee of a continuing Event of Default, with a copy of such
notice to the Company;
(b) the Holders of not less than 25% in principal amount
of the Outstanding Notes 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;
(c) such Noteholder or Noteholders have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority or more in principal amount of the Outstanding Notes;
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it being understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the
rights of any other Noteholders, or to obtain or to seek to obtain
priority or preference over any other Noteholders or to enforce any
right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all the Noteholders.
SECTION 5.08 Unconditional Right of Holders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note or of any Coupon, as the case may be, shall have the right, which is
absolute and unconditional, to receive payment, as provided herein (including,
if applicable, Article Thirteen) and in such Note of the principal of and
(subject to Section 3.09) interest on, such Note on the respective Stated
Maturity or expressed in such Note (or, in the case of redemption, on the
Redemption Date) or Coupon and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder; provided, that all monies paid by the Company to the Paying Agent for
the payment of principal or interest on any Note which remain unclaimed at the
end of two (2) years after the Stated Maturity or Redemption Date of such Note
will be repaid to the Company and the Holder of any Note or Coupon shall
thereafter have only the rights of a creditor of the Company or such rights as
may be otherwise provided by applicable law.
SECTION 5.09 Restoration of Rights and Remedies.
If the Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Noteholders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Noteholders shall continue as though no such proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 3.08, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy
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hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Noteholders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Noteholders,
as the case may be.
SECTION 5.12 Control by Noteholders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes 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, provided that in each
case
(a) such direction shall not be in conflict with any rule
of law or with this Indenture,
(b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might
involve it in personal liability or be unjustly prejudicial to the
Noteholders not joining in such direction.
SECTION 5.13 Waiver of Past Defaults.
Subject to Section 5.02, the Holders of not less than a majority in
principal amount of the Outstanding Notes may on behalf of the Holders of all
the Notes waive any past default hereunder and its consequences, except a
default
(a) in respect of the payment of the principal of or
interest on any Note, or
(b) 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 Note affected.
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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 Event of Default or impair any right consequent thereon.
SECTION 5.14 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.15 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
such Noteholder's 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not be deemed to require any
court to require an undertaking or to make such an assessment in any suit
instituted by the Company except against the Trustee.
ARTICLE SIX
THE TRUSTEE
SECTION 6.01 Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall publish 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
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of or interest on any Note, 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 determines that the withholding of such notice is in the interest of the
Noteholders.
SECTION 6.02 Certain Rights of Trustee.
(a) The Trustee may request and rely and shall be
protected in acting or refraining from acting upon any Extraordinary
Resolution, Act, Notice or other resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
(b) Any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(c) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate.
(d) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon.
(e) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Noteholders pursuant to this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses
(including reasonable fees of Trustee's counsel), 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 Extraordinary
Resolution, Act, Notice or other resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the
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Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, 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 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.
(i) The permissive right of the Trustee to take or
refrain from taking any actions enumerated in this Indenture shall not
be confused as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence or wilful misconduct.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 6.03 Trustee Not Responsible for Recitals or Issuance of
Notes.
The recitals contained herein in the Notes, except for the Trustee's
certificates of authentication, and in the Coupons, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes or the Coupons or of the
Conversion Shares, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Notes and
perform its obligations hereunder. The Trustee shall not be accountable for
the use or application by the Company of Notes or the proceeds thereof.
SECTION 6.04 May Hold Notes.
The Trustee, any Paying Agent, any Conversion Agent or any other agent
of the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and the Coupons and may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Conversion Agent or such other agent.
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SECTION 6.05 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.06 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it 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 its negligence, bad faith or wilful
misconduct; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
When the Trustee incurs expenses or renders service in connection with
an Event of Default specified in Section 5.01 (f) or Section 5.01 (g), the
expenses (including the reasonable charges of its counsel) and the compensation
for the services are intended to constitute expenses of the administration
under any applicable federal or state bankruptcy, insolvency or other similar
law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a claim prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of or interest on particular Notes.
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The provision of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee. Any Paying
Agent or Authenticating Agent appointed hereunder shall be entitled to the
benefits of Section 6.06 (c) as if the indemnity set forth therefor were
specifically afforded to such Paying Agent or Authenticating Agent.
SECTION 6.07 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee and shall have a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee 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.
SECTION 6.08 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 in accordance with the applicable requirements of Section
6.09.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.09 shall not have been
delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of not less than a majority in principal amount of the
Outstanding Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall cease to be eligible under
Section 6.07 and shall fail to resign after written request
therefor by the Company or by any Noteholder who has been a
bona fide Holder of a Note for at least six months, or
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(ii) 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, or
(iii) the Trustee shall fail or refuse to timely
carry out and discharge its duties hereunder,
then, in any such case, (i) the Company, by a Board Resolution, may
remove the Trustee, or (ii) any Noteholder who has been a bona fide
Holder of a Note for at least six months may, on behalf of such
Noteholder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(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 reason, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Notes delivered
to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Noteholders and accepted appointment
in the manner hereinafter provided, any Noteholder who has been a bona
fide Holder of a Note for at least six months may, on behalf of such
Noteholder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor
Trustee to the Noteholders in the manner provided for in Section 1.08.
Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 6.09 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to 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,
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powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, including any funds held in the
Segregated Account, whether or not invested. Upon request of any such
successor Trustee, the Company 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.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.10 Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case
at that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion
or consolidation.
SECTION 6.11 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default
with respect to the Notes,
(i) the Trustee undertakes to perform such duties
and only such duties with respect to the Notes as are
specifically set forth in this Indenture, and no
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implied covenants or obligations with respect to the Notes
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture, but not to verify the contents
thereof.
(b) In case an Event of Default has occurred and is
continuing of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture with respect to the Notes, and use the
same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such
person's own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own wilful misconduct, except
that
(i) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Noteholders, given as
provided in Section 5.12, relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(iv) no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it
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shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject
to the provisions of this Section.
SECTION 6.12 Segregated Account.
(a) On the Closing Date or the day immediately following
the Closing Date the net proceeds received from the sale of the Notes
shall be transferred to the Segregated Account to be held until such
time as such proceeds may be distributed to the Company in accordance
with this Section or used by the Company in accordance with the
provisions of Article Four and Article Thirteen hereof.
(b) On the Closing Date or the date immediately following
the Closing Date, the Company will establish the Segregated Account
with Trustee on behalf of the Company. The Trustee shall have a duty
to invest the funds held in the Segregated Account from time to time
in accordance with any Company Request received by the Trustee from
the Company from time to time. Funds held by the Trustee will be
invested and reinvested in Permitted Investments as directed in
writing by the Company. Interest earned on investments made with the
funds in the Segregated Account from time to time and on deposit in
the Segregated Account will be held for the account of the Company and
also invested in accordance with the instructions provided by the
Company from time to time in a Company Order in Permitted Investments.
The Trustee will distribute such earnings to the Company upon written
request.
(c) Upon conversion of any Note, whether represented by
an interest in the Global Note or a Bearer Note, into Conversion
Shares pursuant to Article Twelve, from time to time, the Company may
request that the Trustee make a distribution to the Company of funds
held in the Segregated Account in an amount equal to the principal
amount of such Note. The balance of the principal amount for such
Note remaining on deposit in the Segregated Account at the Conversion
Date shall be distributed to the Company without regard to the then
current Asset Value Coverage Ratio; provided, however, that no such
distribution shall be made if an Event of Default shall have occurred
and be continuing. In addition, the Company may from time to time
request that the Trustee distribute to the Company any other funds
held in the Segregated Account. The Trustee shall distribute to the
Company such funds held in the Segregated Account to the
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extent that the Company on the date of such request provides the
documents specified in Section 6.12(d) to the Trustee.
(d) Upon making any written request to the Trustee for a
distribution of a portion of the funds, including any earnings
thereon, held in the Segregated Account, the Company will present to
the Trustee a certificate from the chief financial officer of the
Company including items (a) through (d) of Section 1.04 and in the
form set forth as Exhibit D stating that (i) the required Asset Value
Coverage Ratio has (A) been met in accordance with Section 10.13 as of
the date of such request and (B) will be met, following distribution
of such funds from the Segregated Account (which certification may be
based on assets subject to the Asset Value Coverage Ratio acquired
subsequent to the end of the most recent fiscal year), (ii) to the
knowledge of the Company no Event of Default with respect to any of
the Notes has occurred and is continuing at the date of such
certificate (except in the case of funds to be immediately deposited
with Trustee pursuant to Section 4.01), and (iii) requesting a
specific distribution. Such chief financial officer's certificate
shall be accompanied by an Independent Reserve Report. Upon receipt
of the chief financial officer's certificate and the Independent
Reserve Report, the Trustee shall distribute the corresponding portion
of the funds held in the Segregated Account to the Company as
requested; provided that any chief financial officer's certificate
delivered to the Trustee pursuant to Article Four or Article Thirteen
shall not be required to contain the statements set forth in subparts
(i) and (ii) above. The Trustee shall have no obligation or liability
to verify the truthfulness or accuracy of the chief financial
officer's certificate or the Independent Reserve Report presented and
likewise will have no liability for relying exclusively on such
documents to verify the permissibility of a distribution of funds from
the Segregated Account to the Company as requested.
(e) At any time after Maturity, the Company may request
that the Trustee distribute the funds held in the Segregated Account
to the Company. Upon making any such request, the Company shall
present an Officer's Certificate including items (a) through (d) of
Section 1.04 and stating that all principal and interest due at any
time on the Notes up to and through Maturity has been paid to the
Trustee.
(f) The Company may at any time and from time to time
deposit funds in the Segregated Account in order to meet the required
Asset Value Coverage Ratio or to supplement or replace any Required
Assets designated in the most recent chief financial officer's
certificate as part of the Asset Value Coverage Ratio with other or
additional assets eligible for inclusion as Required Assets, provided
that prior to any such change in the allocation of Required Assets,
the Company shall provide a substitute chief financial
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officer's certificate evidencing that the required Asset Value
Coverage Ratio shall be met after such deposit, supplement or
replacement is effective, as the case may be.
SECTION 6.13 Meetings of Noteholders.
(a) The Trustee or the Noteholders may convene a meeting
at any time and from time to time to consider any matter affecting the
interests of the Trustee or the Holders of the Notes, including the
modification of the Terms and Conditions or this Indenture and to
make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be made, given or taken by Holders of the Notes.
(b) The Trustee may at any time call a meeting of the
Holders of the Notes for any purpose specified in Section 6.13(a), to
be held at such time and at such place in the Borough of Manhattan,
The City of New York, or in the City of London, England, as the
Trustee shall determine. Notice of every meeting of the Holders of
the Notes, 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 1.08, not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
(c) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in aggregate principal
amount of the Outstanding Notes shall have requested the Trustee to
call a meeting of the Holder of the Notes for any purpose other than
specified in Section 6.13(a), by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of the Notes in the amount specified,
as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in the City of London,
England, for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in Section 1.08.
(d) To be entitled to vote at any meeting of Holders of
the Notes, a Person shall be (i) a Holder of one or more Outstanding
Notes, or (ii) a Person appointed by an instrument in writing as proxy
for a Holder or Holders of one or more Outstanding Notes by such
Holder or Holders. The only Persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the Persons
entitled to vote at such meeting and their counsel, any
representatives of the Trustee and the Company, and their respective
counsel.
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(e) The quorum at any meeting for passing any
Extraordinary Resolution will be one or more Persons present holding
or representing 50 percent or more in principal amount of the
Outstanding Notes as of the date of the meeting, or at any adjourned
such meeting one or more Persons present whatever the principal amount
of the Notes held or represented by such Person, except that at any
meeting, the business of which includes the modification of certain of
the provisions of the Terms and Conditions and the provisions of this
Indenture, the necessary quorum and vote required for passing an
Extraordinary Resolution will be one or more Persons present holding
or representing not less than a majority, or at any adjourned such
meeting not less than one-third, of the principal amount of the
Outstanding Notes. An Extraordinary Resolution passed at any meeting
of the Holders of the Notes will be binding on all Holders of the
Notes, whether or not such Noteholders are present at the meeting, and
on the Holders of all Coupons.
(f) The Trustee may agree, without the consent of the
Holders of the Notes or the Coupons, to any modification of, or to the
waiver or authorization of any breach or proposed breach of, any of
the Terms and Conditions or any of the provisions of this Indenture
which is not, in the opinion of the Trustee prejudicial to the
interests of the Holders of the Notes or the Coupons or if necessary
to correct a manifest error.
SECTION 6.14 Authenticating Agents.
The Principal Paying and Conversion Agent may authenticate the
Global Note, the Temporary Notes and the Notes, as the Trustee's Authenticating
Agent. The Trustee may, with the written consent of the Company, appoint an
additional Authenticating Agent acceptable to the Company with respect to the
Notes which shall be authorized to act on behalf of the Trustee to authenticate
Notes issued upon exchange or substitution pursuant to this Indenture.
Notes authenticated by an Authenticating Agent 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, and every
reference in this Indenture to the authentication and delivery of Notes by the
Trustee or the Trustee's certificate of authentication 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. The Notes shall have endorsed thereon
the certificate of authentication set forth in Exhibits in A and B hereto.
Each Authenticating Agent shall be subject to acceptance by the Company and
shall at all times be a corporation organized and dong business under the laws
of the United States of America, any state thereof, the District of Columbia,
or England and Wales authorised under such laws to act as Authenticating Agent
and subject to supervision or examination by government or other fiscal
authority. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the
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provisions of this Section 6.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent; provided such
corporation shall be otherwise eligible under this Section 6.14, 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 be giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. 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 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for this service under Section 6.14.
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS BY COMPANY
SECTION 7.01 Disclosure of Names and Addresses of Noteholders.
Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Noteholders regardless of
the source from which such information was derived.
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SECTION 7.02 Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is
not required to file information, documents or reports pursuant to
either of said Sections, then, on the 120th day following the initial
issuance of the Notes and annually thereafter, it shall file with the
Trustee, 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 Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(b) file with the Trustee, 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 with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(c) file with the Trustee within 90 days after the end of
its fiscal year, a copy of an Independent Reserve Report dated as of
the end of such fiscal year.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 8.01 Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(a) either (i) the Company shall be the surviving Person
or (ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the
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properties and assets of the Company substantially as an entirety (1)
shall be a Person organized and validly existing under the laws of the
United States of America, any state thereof or the District of
Columbia and (2) shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the Company's obligation for the due and punctual payment
of the principal of and interest on all the Notes and the performance
and observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
and
(c) the Company or such 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 complies with this Article
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 8.02 Successor Substituted.
Upon any consolidation of the Company with or merger of the Company
with or into any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
in accordance with Section 8.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and in the event of any such conveyance or transfer, the Company (which term
shall for this purpose mean the Person named as the "Company" in the first
paragraph of this Indenture or any successor Person which shall theretofore
become such in the manner described in Section 8.01), except in the case of a
lease, shall be discharged of all obligations and covenants under this
Indenture and the Notes and may be dissolved and liquidated.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without Consent of
Noteholders.
Without the consent of any Noteholders, the Company, when authorized
by 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 and the assumption by any such successor of the covenants of
the Company contained herein and in the Notes; or
(b) to add to the covenants of the Company for the
benefit of the Noteholders or to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee pursuant to the
requirements of Section 6.09; or
(e) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such action
shall not adversely affect the interests of the Noteholders in any
material respect; or
(f) to secure the Notes pursuant to the requirements of
Section 10.11 or otherwise.
SECTION 9.02 Supplemental Indentures with Consent of Noteholders.
With the consent of the Noteholders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Noteholders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the
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rights of the Noteholders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or
any instalment of principal of or interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon, or change
the coin or currency in which any Note or the interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(b) reduce the percentage in principal amount of the
Outstanding Notes, 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
(c) modify any of the provisions of this Section or
Section 5.13, 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 Note
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Noteholder with respect to
changes in the references to "the Trustee" and concomitant changes in
this Section and elsewhere, or the deletion of this proviso, in
accordance with the requirements of Section 6.09 and 9.01(d), or
(d) modify any of the provisions of Section 10.11 or any
of the provisions of this Indenture relating to the subordination of
the Note in a manner adverse to the Holders thereof.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.11) 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
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into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.04 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 Notes theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.05 Reference in Notes to Supplemental Indentures.
Notes 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 shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.
SECTION 9.06 Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.02, the Company
shall give notice thereof to the Holders of each Outstanding Note affected, in
the manner provided for in Section 1.08, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 10.01 Payment of Principal and Interest.
The Company covenants and agrees for the benefit of the Noteholders
and the Couponholders that it will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
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SECTION 10.02 Maintenance of Office or Agency.
The Company will maintain in not less than one European city, an
office or agency where Notes may be presented or surrendered for payment, where
Notes may be surrendered for conversion or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The corporate trust office of the Principal Paying Agent at Mariner
House, Pepys Street, London EC3N 4DA, England shall be such office or agency of
the Company, unless the Company shall designate and maintain some other office
or agency for one or more of such purposes pursuant to the terms of that
certain Paying and Conversion Agency Agreement of even date herewith (the
"Agency Agreement"). The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of Europe) where the Notes may be presented
or surrendered for any or all such purposes and may from time to time rescind
any such designation; provided, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or
agency in Europe for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and any change in
the location of any such other office or agency.
SECTION 10.03 Money for Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of or interest on any of the Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before 3:00 p.m. (London time) on the Business Day
immediately preceding each due date of the principal of or interest on any
Notes, deposit with a Paying Agent a sum sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
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Pursuant to the terms of the Agency Agreement, each Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that such
Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company
in the making of any payment of principal or interest; 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 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 direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; 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.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Company 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
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, 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, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 10.04 Corporate Existence.
The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises of the Company; provided, however, that
the Company shall not be required to preserve any such right
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or franchise if the Board of Directors shall determine that the preservation
thereof is no longer in the best interests of the Company and its Principal
Subsidiaries as a whole and the conduct of their collective businesses, and
that the loss thereof is not disadvantageous in any material respect to the
Noteholders; and provided, further, that nothing contained in this Section
10.04 shall prohibit any transaction permitted by Article Eight or Sections
such as 10.14.
SECTION 10.05 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Principal
Subsidiary or upon the income, profits or property of the Company or any
Principal Subsidiary and (b) all lawful claims for labour, materials and
supplies which, if unpaid, might by law become a Lien upon the property of the
Company or any Principal Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 10.06 Maintenance of Properties.
The Company will cause all properties owned by the Company or any
Principal Subsidiary or used or held for use in the conduct of its business or
the business of any Principal Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that the business carried on
in connection therewith may be conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the
business of any Principal Subsidiary and not disadvantageous in any material
respect to the Noteholders, and provided, further, that nothing contained in
this Section 10.06 shall prohibit any transaction permitted by Article Eight or
Sections such as 10.11.
SECTION 10.07 Insurance.
The Company will at all times keep all of the Company's and its
Principal Subsidiaries' properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or
damage to the extent that property of similar character is usually so insured
by Corporations similarly situated and owning like properties in similar
geographic areas in which the Company or such Principal Subsidiary operates;
provided that such insurance is
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generally available at commercially reasonable rates, and provided further that
the Company or such Principal Subsidiary may self-insure directly or through
captive insurers or insurance cooperatives, to the extent that the Company
determines that such practice is consistent with prudent business practices.
Such insurance shall be in such amount, on such terms, in such forms and for
such periods as are customary for similarly situated Persons in the Company's
industry or in insurance markets available to the Company.
SECTION 10.08 Statement by Officers as to Default.
The Company will deliver to the Trustee at its Corporate Trust Office,
within 120 days after the end of each fiscal year, a brief Officers'
Certificate including a statement by the officer executing such certificate
that in the course of performing his or her duties as an officer of the Company
such officer would normally obtain knowledge of (i) whether or not any Default
exists in the performance and observation of any terms, provisions and
conditions of this Indenture and (ii) whether or not the Company has otherwise
kept, observed, performed and fulfilled its obligations under this Indenture in
all material respects. Such Officers' Certificate shall further state, as to
the officer signing such certificate, to the knowledge of such officer, as of
the date of such Officers' Certificate, (i) whether or not any Default exists,
(ii) whether or not the Company during the preceding fiscal year kept,
observed, performed and fulfilled in all material respects each and every
covenant and obligation of the Company under this Indenture and (c) whether or
not there was any Default in the performance and observance of any of the
terms, provisions or conditions of this Indenture during such preceding fiscal
year. If the officer signing the Officers' Certificate knows of such a
Default, whether then existing or occurring during such preceding fiscal year,
the Officers' Certificate shall describe such Default and its status with
particularity. The Company shall also promptly notify the Trustee if the
Company's fiscal year is changed so that the end thereof is on any date other
than the then current fiscal year end date. For purposes of this Section
10.08, such compliance shall be determined without regard to any period of
grace granted by the Trustee or requirement of notice under this Indenture.
The Company will deliver to the Trustee, forthwith upon becoming aware of any
default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such Default or Event of Default and
further stating what action the Company has taken or is taking or proposes to
take with respect thereto.
SECTION 10.09 Provision of Financial Statements.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Trustee the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to such Sections 13(a) or 15(d) if the Company were so subject,
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such documents to be filed with the Commission on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required so to file such documents if the Company were so subject. The Company
will also in any event (x) within 15 days of each Required Filing Date file
with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company has filed with the Commission or would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) if filing
such documents by the Company with the Commission is not permitted under the
Exchange Act, promptly upon written request, supply copies of such documents to
any prospective Noteholder at the Company's cost.
SECTION 10.10 Limitation on Other Indebtedness.
Neither the Company nor any Principal Subsidiary will create, incur,
assume, guarantee or in any other manner become directly or indirectly liable
for the payment of any Indebtedness that is senior in right of payment to the
Notes.
SECTION 10.11 Limitation on Liens.
The Company will not, and will not permit any of its Principal
Subsidiaries to, create, incur, assume or suffer to exist, any Lien of any kind
securing any Indebtedness that is senior to, pari passu with or subordinate in
right of payment to the Notes (including any assumption, guarantee or other
liability with respect thereto by any of its Principal Subsidiaries) upon any
Oil and Gas Properties of the Company or any of its Subsidiaries described in
the Independent Reserve Report which are included in the Asset Value Coverage
Ratio, unless the Notes are equally and ratably secured or rank prior to the
Indebtedness secured by such Lien.
SECTION 10.12 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 8.03 or Sections 10.05
through 10.07, 10.09 through 10.11 if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Notes, by Act of such Noteholders, waive such compliance in such
instance 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 duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
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SECTION 10.13 Maintenance of Asset Value Coverage Ratio.
The Company will maintain an Asset Value Coverage Ratio equal or
greater than 1:1, such maintenance to be evidenced in part based on an
Independent Reserve Report prepared as of the end of each fiscal year (as the
same may be supplemented during such fiscal year) during the term of this
Indenture.
SECTION 10.14 Restrictions on Charter Amendments.
The Company will not amend its Certificate of Incorporation or Bylaws
except as required by law or except to the extent that such amendment would not
have a material adverse effect on (a) the ability of the Company to perform its
obligations under this Indenture or the Notes or (b) the rights of the
Noteholders, except that neither (i) increases in the number of Shares and
issuance thereof with related securities, nor (ii) designations of Preferred
Stock of the Company, modifications of the terms of such designations and
issuance thereof with related securities, nor (iii) modification or expansion
of the indemnity provisions provided by the Company to its directors and
officers, nor (iv) change of the Company's registered agent shall be deemed an
amendment hereunder.
SECTION 10.15 United States Withholding and Reporting Requirements.
To the extent permitted by law, the Company will provide to the
Trustee, the Paying Agent or to any Noteholder such statements, certificates or
other documentation concerning the organization or operations of the Company as
may be reasonably necessary to establish any exceptions or exemptions from
United States federal income tax withholding and reporting requirements.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 11.01 Right of Redemption.
At any time after July 30, 1999, the Notes may be redeemed, at the
election of the Company, as a whole or from time to time in part. Redemption
shall be subject to the conditions specified in the form of Note and at a
Redemption Price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest to the Redemption Date, but only to the extent that
all unmatured Coupons are attached to such Notes.
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SECTION 11.02 Applicability of Article.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 11.03 Election to Redeem; Notice to Trustee.
The action of the Company to redeem any Notes pursuant to Section
11.01 shall be evidenced by a Board Resolution. In case of any redemption
pursuant to Section 11.01, the Company shall, at least 30 days and not more
than 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 Notes to be redeemed and
shall deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Notes to be redeemed pursuant to Section 11.04.
SECTION 11.04 Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Notes 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
of Notes; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of a Note not redeemed to less than $50,000.
The Noteholders do not have a right to a prorated redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes 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 redemption of Notes shall relate, in the
case of any Notes redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note which has been or is to be redeemed.
If the Company shall so direct, Notes registered in the name of the
Company or any Subsidiaries shall not be included in the Notes selected for
redemption.
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SECTION 11.05 Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 1.08 not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be
redeemed, the identification (and, in the case of a partial
redemption, the principal amounts) of the particular Notes to be
redeemed;
(d) that on the Redemption Date the Redemption Price
(together with accrued and unpaid interest, if any, to the Redemption
Date payable as provided in Section 11.07, but only with respect to
Notes with all unmatured Coupons attached) will become due and payable
upon each such Note, or the portion thereof, to be redeemed, and that
interest thereon will cease to accrue on and after said date;
(e) the place or places where such Notes are to be
surrendered for payment of the Redemption Price; and
(f) pursuant to Section 3.13, any ISIN, CUSIP or other
identifying numbers relating to the Notes.
Notice of redemption of Notes 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 11.06 Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the Redemption
Price of, and accrued and unpaid interest on, all the Notes which are to be
redeemed on that date.
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SECTION 11.07 Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued and unpaid interest,
if any, to the Redemption Date, subject to the delivery of all unmatured and
matured but unpaid Coupons), and from and after such date (unless the Company
shall default in the payment of the Redemption Price) such Notes shall cease to
bear interest. Upon surrender of any such Note for redemption in accordance
with said notice, such Note shall be paid by the Company at the Redemption
Price, together with accrued interest, if any, to the Redemption Date, to the
extent that all matured and unpaid and unmatured Coupons, if any, are attached;
provided, however, that instalments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Notes, or
one or more Predecessor Notes, according to their terms.
If any Note called for redemption shall not be so paid upon surrender
by the Noteholder as prescribed hereunder thereof for redemption, the principal
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Notes. In the event that the Company shall default
in making payment in full in respect of any Note which shall have been called
for redemption prior to July 30, 2000, on the Redemption Dates the Conversion
Right attaching to such Note will continue to be exercisable (unless previously
exercised by the Trustee or the Company) up to, and including the close of
business (at the place where the Note is deposited in connection with the
exercise of the Conversion Right) on the date upon which the full amount of the
monies payable in respect of such Note has been duly received the Trustee or
the Principal Paying Agent or, if earlier, July 30, 2000.
SECTION 11.08 Surrender of Notes
Each Note should be presented for redemption together with all
unmatured Coupons relating to such Note, failing which the full amount of any
missing unmatured Coupon (or, in the case of payment not being made in full,
that proportion of the full amount of the missing unmatured Coupons which the
amount so paid bears to the total amount due) will be deducted from the amount
due for payment. Each amount so deducted will be paid in the manner mentioned
above against presentation and surrender (or, in the case of part payment only,
endorsement) of such missing Coupon at any time before the expiry of six (6)
years after the Relevant Date in respect of the relevant Note (whether or not
such Coupon would otherwise have become void pursuant to Condition 10), or if
later, five (5) years after the date on which such Coupon would have become
due, but not thereafter.
SECTION 11.09 Conversion on Redemption
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(a) The Trustee may, at its absolute discretion (and
without any responsibility for any loss occasioned thereby), within
the period commencing on the date four (4) Business Days prior to, and
ending at the close of business on the Business Day prior to the
Redemption Date, of any of the Notes elect by notice in writing to the
Company to convert as of such Redemption Date the aggregate number of
Notes due for conversion on such date any Unexercised Notes into
Shares at the Conversion Price applicable at such Redemption Date if
all necessary consents (if any) have been obtained and the Trustee is
satisfied or is advised by a reputable independent merchant bank
appointed by it that the net proceeds of an immediate sale of the
Shares arising from such conversion (disregarding any liability other
than a liability of the Trustee for taxation or the payment of any
capital, stamp, issue or registration duties consequent thereon) would
be likely to exceed by 5 percent or more the amount of redemption
monies and interest which would otherwise be payable in respect of
interest accrued and unpaid since the Interest Payment Date
immediately preceding such Redemption Date or if such date falls
before the first Interest Payment Date, since the Closing Date in
respect of such Unexercised Notes.
(b) Subject to applicable law, the Trustee shall arrange
for the sale on behalf of the Holders of the Unexercised Notes of the
Shares issued on such conversion as soon as practicable, and (subject
to any necessary consents being obtained and to the deduction by the
Trustee of any amount which it determines to be payable in respect of
its liability to taxation or the payment of any capital, stamp, issue
or registration duties (if any) and any costs incurred by the Trustee
in connection with that allotment and sale thereof) the net proceeds of
sale together with accrued and unpaid interest payable in respect of
such Unexercised Notes (if any) shall be held by the Trustee and
distributed by the Principal Paying Agent rateably to the Holders of
such Unexercised Notes against due presentation. The amount of such
net proceeds of sale shall be treated for all purposes as the full
amount due by the Company in respect of such Unexercised Notes.
ARTICLE TWELVE
CONVERSION
SECTION 12.01 Conversion Right and Conversion Price.
(a) Subject to and upon compliance with the provisions of
this Article, at the option of the Noteholder, at any time from and
after the first Business Day following termination of the Restricted
Period and (i) up to the close of business on the second Business Day
preceding July 30, 2000 (but in no event thereafter), or (ii) if such
Note
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shall have been called for redemption pursuant to Article Eleven, up
to and including five (5) Business Days prior to the Redemption Date,
provided, however, that the Company shall not have given notice of any
Mandatory Conversion Date, any Note may be converted at the principal
amount thereof into fully paid and non-assessable Conversion Shares at
the Conversion Price.
(b) The Conversion Price shall be adjusted in certain
instances as provided in Section 12.04.
(c) A holder of shares issued on conversion of Notes
shall not be entitled to any rights for any Record Date which precedes
the relevant Conversion Date or Mandatory Conversion Date, as the case
may be.
SECTION 12.02 Exercise of Conversion Right.
(a) In order to exercise the Conversion Right, the
Noteholder to be converted shall provide notice to the Conversion
Agent that it intends to exercise its Conversion Right and shall
surrender such Bearer Note or Notes and all unmatured Coupons,
including the one for the next due interest payment, to the Conversion
Agent at its corporate trust offices, or such other office of any
Conversion Agent as published in an Authorized Newspaper from time to
time, accompanied by written notice (as set forth in Exhibit E hereto)
to the Conversion Agent that the Noteholder elects to convert such
Note. A Conversion Notice once delivered shall be irrevocable.
(b) Bearer Notes shall be deemed to have been converted
on the Conversion Date, and at such time, except as provided in this
Section 12.02 below, the rights of the Noteholders as Noteholders
shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, the Company
shall issue and shall deliver through the Conversion Agent at the
Conversion Agent's office or agency a certificate or certificates for
the number of full shares of Common Stock issuable upon such
conversion. The Conversion Agent shall deliver the share certificate
or certificates in accordance with the instructions set forth in the
notice of exercise of Conversion Rights.
(c) If the Conversion Date is a date other than an
Interest Payment Date the Company shall not pay and the Noteholder
shall not be entitled to receive any interest accrued on the Notes
from the last Interest Payment Date prior to the Conversion Date.
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(d) No Noteholder will be entitled upon conversion
thereof to any payment or adjustment on account of interest on the
Notes or dividends on the shares of Common Stock issued in connection
therewith.
SECTION 12.03 Fractions of Shares.
The number of Shares to be issued on conversion of a Note will
be determined by dividing the principal amount of the Note to be
converted by the Conversion Price in effect on the Conversion Date,
with the result being rounded down to the nearest whole number. No
cash in lieu of or fractional shares of Common Stock shall be issued
upon conversion of Notes. If more than one Note shall be surrendered
for conversion at one time by the same Noteholder, the number of full
shares which shall be issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Notes
(or specified portions thereof) so surrendered.
SECTION 12.04 Adjustment of Conversion Price.
(a) Dividends or Distributions of Common Stock. In case
the Company shall pay or make a dividend or other distribution on its
Common Stock exclusively in Common Stock or shall pay or make a
dividend or other distribution on any other class of capital stock of
the Company which dividend or distribution includes Common Stock, the
Conversion Price in effect at the opening of business on the day next
following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately
after the opening of business on the day next following the date fixed
for such determination. For the purposes of this Section 12.04(a),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company.
(b) Dividends or Distributions of Rights, Warrants or
Options to Purchase Common Stock. In case the Company shall pay or
make a dividend or other distribution on its Common Stock consisting
exclusively of, or shall otherwise issue to all holders of its Common
Stock, rights, warrants or options entitling the holders thereof to
subscribe for or purchase shares of Common Stock at a price per share
less than the Market Price per share (determined as provided in
Section 12.04(g)) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights,
warrants or options,
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the Conversion Price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number
of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or purchase,
outstanding at the close of business on the date fixed for such
reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For the purposes of this paragraph (b), the number of shares of Common
Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not issue any rights,
warrants or options in respect of shares of Common Stock held in the
treasury of the Company.
(c) Dividends or Distributions in Cash. In case the
Company shall, by dividend or otherwise, make a distribution to all
holders of its Common Stock exclusively in cash in an aggregate amount
that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 12.04(c) has been made and (ii) the aggregate
of any cash plus the fair market value (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Company's Board of Directors), as of
the expiration of the tender or exchange offer referred to below, of
consideration payable in respect of any tender or exchange offer by
the Company or a Subsidiary for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment
pursuant to paragraph (f) of this Section 12.04 has been made, exceeds
five percent (5%) of the product of the Market Price per share
(determined as provided in Section 12.04(g)) of the Common Stock on
the date fixed for stockholders entitled to receive such distribution
times the number of shares of Common Stock outstanding on such date,
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this paragraph (c) by a fraction of which
the numerator shall be the Market Price per share (determined as
provided Section 12.04(g)) of the Common Stock on the date of such
effectiveness less the amount of cash so distributed applicable to one
share of Common Stock and the denominator shall be such Market Price
per share of the Common Stock, such reduction
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to become effective immediately prior to the opening of business on
the day following the date fixed for the payment of such distribution.
(d) All Other Distributions or Dividends. Subject to the
last sentence of this paragraph (d), in case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, shares of any class of capital stock,
securities, cash or property (excluding any rights, warrants or
options referred to in Section 12.04(b), any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to
in Section 12.04(a), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this paragraph (d) by a
fraction of which the numerator shall be the Market Price per share
(determined as provided in paragraph (g) of this Section) of the
Common Stock on the date of such effectiveness less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Company's Board of Directors and shall, in the case of securities
being distributed for which prior thereto there is an actual or when
issued trading market, be no less than the value determined by
reference to the average of the Market Price over the period specified
in the succeeding sentence), on the date of such effectiveness, of the
portion of the evidences of indebtedness, shares of capital stock,
securities, cash and property so distributed applicable to one share
of Common Stock and the denominator shall be such Market Price per
share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day next following
the date fixed for the payment of such distribution (such date to
being referred to as the "Reference Date"). If the Board of Directors
determines the fair market value of any distribution for purposes of
this paragraph (d) by reference to the actual or when issued trading
market for any securities comprising such distribution, it must in
doing so consider the prices in such market over the same period used
in computing the Market Price per share pursuant to paragraph (g) of
this Section. For purposes of this paragraph (d), any dividend or
distribution that includes shares of Common Stock or rights, warrants
or options to subscribe for or purchase shares of Common Stock shall
be deemed instead to be (i) a dividend or distribution of the
evidences of indebtedness, cash, property, shares of capital stock or
securities other than such shares of Common Stock or such rights,
warrants or options (making any Conversion Price reduction required by
this paragraph (d)) immediately followed by (ii) a dividend or
distribution of such shares of Common Stock or such rights, warrants
or options (making any further Conversion Price reduction required by
Section 12.04(a) or (b)), except (i) the Reference Date of such
dividend or distribution as defined in this Section 12.04(d) shall be
substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution",
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"the date fixed for the determination of stockholders entitled to
receive such rights, warrants or options" and "the date fixed for such
determination" within the meaning of Section 12.04(a) and (b) and (ii)
any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of Section 12.04(a)).
(e) Subdivision of Common Stock. In case outstanding
shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely,
in case outstanding shares of Common Stock shall each be combined into
a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become
effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(f) Tender or Exchange Offer for Common Stock. In case a
tender or exchange offer made by the Company or any Subsidiary for all
or any portion of the Common Stock shall expire and such tender or
exchange offer shall involve an aggregate consideration having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Company's Board of Directors) at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) that, together with (i) the
aggregate of the cash plus the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Company's Board of
Directors), as of the expiration of the other tender or exchange offer
referred to below, of consideration payable in respect of any other
tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the preceding 12 months
and in respect of which no Conversion Price adjustment pursuant to
this paragraph (f) has been made and (ii) the aggregate amount of any
distributions to all holders of the Common Stock made exclusively in
cash within the preceding 12 months and in respect of which no
Conversion Price adjustment pursuant to Section 12.04(e) has been
made, exceeds five percent (5%) of the product of the Market Price per
share (determined as provided in Section 12.04(g)) of the Common Stock
on the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time,
the Conversion Price shall be reduced (but not increased) so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by a fraction
of which the
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numerator shall be (i) the product of the Market Price per share
(determined as provided in Section 12.04(g)) of the Common Stock at
the Expiration Time times the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the
Expiration Time minus (ii) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and the denominator shall be the product of (i)
such Market Price per share at the Expiration Time times (ii) such
number of outstanding shares at the Expiration Time less the number of
Purchased Shares, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time.
(g) Determination of Market Price. For the purpose of
any computation of the Market Price under this paragraph (g) and
Section 12.04(b), (d) and (e), (i) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to paragraph (a), (b), (c), (d), (e) or (f)
above ("Other Event") occurs on or after the tenth Stock Exchange
Business Day prior to the date in question and prior to the "ex" date
for the issuance or distribution requiring such computation (the
"Current Event"), the closing price for each Stock Exchange Business
Day prior to the "ex" date for such Other Event shall be adjusted by
multiplying such closing price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of such
Other Event, (ii) if the "ex" date for any Other Event occurs after
the "ex" date for the Current Event and on or prior to the date in
question, the closing price for each Stock Exchange Business Day on
and after the "ex" date for such Other Event shall be adjusted by
multiplying such closing price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result
of such Other Event, (iii) if the "ex" date for any Other Event occurs
on the "ex" date for the Current Event, one of those events shall be
deemed for purposes of clauses (i) and (ii) of this proviso to have an
"ex" date occurring prior to the "ex" date for the other event, and
(iv) if the "ex" date for the Current Event is on or prior to the date
in question, after taking into account any adjustment required
pursuant to clause (ii) of this proviso, the closing price for each
Stock Exchange Business Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market
value on the date in question (as determined in good faith by the
Board of Directors in a manner consistent with any determination of
such value for purposes of this Section 12.04(c) or (d), whose
determination shall be conclusive and described in a resolution of the
Company's Board of Directors) of the portion of the rights, warrants,
options, evidences of indebtedness, shares of capital stock,
securities, cash or property being distributed
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applicable to one share of Common Stock. For the purpose of any
computation under Section 12.04(f), the Market Price per share of
Common Stock on any date in question shall be deemed to be the Market
Price on the date selected by the Company commencing on or after the
latest (the "Commencement Date") of (i) the date 20 Stock Exchange
Business Days before the date in question, (ii) the date of
commencement of the tender or exchange offer requiring such
computation and (iii) the date of the last amendment, if any, of such
tender or exchange offer involving a change in the maximum number of
shares for which tenders are sought or a change in the consideration
offered, and ending not later than the date of the Expiration Time of
such tender or exchange offer (or, if such Expiration Time occurs
before the close of trading on a Stock Exchange Business Day, not
later than the Stock Exchange Business Day immediately preceding the
date of such Expiration Time); provided, however, that if the "ex"
date for any Other Event (other than the tender or exchange offer
requiring such computation) occurs on or after the Commencement Date
and on or prior to the date of the Expiration Time for the tender or
exchange offer requiring such computation, the closing price for each
Stock Exchange Business Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such closing price by the same
fraction by which the Conversion Price is so required to be adjusted
as a result of such other event. For purposes of this paragraph, the
term "ex" date, (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from
which the closing price was obtained without the right to receive such
issuance or distribution, (ii) when used with respect to any
subdivision or combination of shares of Common Stock, means the first
date on which the Common Stock trades regular way on such exchange or
in such market after the time at which such subdivision or combination
becomes effective, and (iii) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration
Time of such tender or exchange offer.
(h) Further Reductions for Federal Income Tax. The
Company may make such reductions in the Conversion Price, in addition
to those required by Section 12.04 (a), (b), (c), (d), (e) and (f), as
it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients.
(i) Adjustments to be Carried Forward. No adjustment in
the Conversion Price shall be required unless such adjustment would
require an increase or decrease of at least five percent (5%) in the
Conversion Price; provided, however, that any adjustments which by
reason of this paragraph (j) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
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SECTION 12.05 Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided the
Company shall compute the adjusted Conversion Price in accordance with Section
12.04 and shall prepare a certificate signed by the chief financial officer of
the Company setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be delivered to the Trustee, the Paying Agent and
the Conversion Agent, and the Company shall cause notice thereof to be
published in accordance with Section 1.08 within ten (10) Business Days of the
effective date of such adjustment.
SECTION 12.06 Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require a Conversion Price adjustment pursuant to Section
12.04(c); or
(b) the Company shall authorize the granting to the
holders of its Common Stock of rights, warrants or options to
subscribe for or purchase any shares of capital stock of any class or
of any other rights (excluding employee stock options); or
(c) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation or merger to which
the Company is a party and for which approval of any stockholders of
the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall
commence a tender or exchange offer for all or a portion of the
Company's outstanding shares of Common Stock (or shall amend any such
tender or exchange offer);
then the Company shall cause to be mailed to the Trustee, the Paying Agent, the
Conversion Agent and to be published in the manner provided under Section 1.08
hereof within ten (10) Business Days after the date on which notice is sent to
the holders of the Company's Common Stock, a
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notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights, warrants or options, or, if
a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, rights, warrants or
options are to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such re-
classification, consolidation, merger, sale, transfer, dissolution, liquidation
or winding up, or (iii) the date on which such tender offer commenced, the date
on which such tender offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto).
SECTION 12.07 Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
pre-emptive or similar rights, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of Notes, the whole number
of Shares then issuable upon the conversion in full of all Outstanding Notes.
SECTION 12.08 Taxes on Conversions.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of Shares on conversion of Notes pursuant hereto. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of Shares in a name
other than that of the Holder of the Notes to be converted, and no such issue
or delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.
SECTION 12.09 Cancellation of Converted Bearer Notes.
All Bearer Notes delivered for conversion to the Conversion Agent
shall be cancelled by the Company, and shall not under any circumstances be
reissued.
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SECTION 12.10 Provisions in Case of Reclassification Consolidation,
Merger or Sale of Assets.
In the event that the Company shall be a party to any transaction
(including without limitation any (i) recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with,
or merger of the Company into, any other person, any merger of another person
into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of all of the
outstanding shares of Common Stock of the Company), (iii) any sale or transfer
of all or substantially all of the assets of the Company, or (iv) any
compulsory share exchange pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby the
Holder of each Note then outstanding shall have the right thereafter to convert
such Note only into the kind of common stock receivable upon such transaction
by a holder of Common Stock (at an adjusted Conversion Price equal to (a) the
Conversion Price determined pursuant to Section 12.04 as though all such
securities, cash or property (other than common stock) had been distributed in
a dividend covered by Section 12.04(d) with an "ex" date on the date of such
transaction divided by (b) the number of shares (or fraction thereof) of common
stock receivable upon such transaction in respect of each share of Common
Stock). The Person formed by such consolidation or resulting from such merger
or which acquired such assets or which acquired the Company's Shares, as the
case may be, shall execute and deliver to each of the Noteholders an amendment
to this Indenture as provided for under Article Nine. Such amendment shall
provide for adjustments which, for events subsequent to the effective date of
such amendment, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article and shall provide for the assumption
by such other Person, if any, of the Company's obligations under this Indenture
and the Notes. The above provisions of this Section 12.10 shall similarly
apply to successive transactions of the foregoing type.
SECTION 12.11 Mandatory Conversion.
At any time after July 30, 1997, the Notes may be converted in whole,
at the Company's option, if at any time the Market Price of the Common Stock
shall have equalled or exceeded 135% of the Conversion Price in effect on such
Stock Exchange Business Day on each Stock Exchange Business Day in any 30
consecutive calendar day period, the first day of which falls on or after
November 28, 1996. In the event that the Company has met the criteria for
Mandatory Conversion at any time, the Company shall give notice to the
Noteholders in the manner provided for in Section 1.08 within 30 calendar days
of the date on which such criteria has been met.
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At any time after July 30, 1997, the Company may require such
Noteholders to convert all of such Notes otherwise pursuant to the terms of
this Article. The Company shall deliver to the Trustee a notice in the form of
Exhibit F hereto and the Company shall cause to be published once in accordance
with Section 1.08 hereof a notice of Mandatory Conversion not less than thirty
(30) and not more than (60) calendar days prior to the Mandatory Conversion
Date. Such notice shall specify the Mandatory Conversion Date. After the
Mandatory Conversion Date, the Notes will no longer represent Indebtedness of
the Company and will no longer accrue interest or require the Company to make
any payment of principal; and the Company's obligations to make any further
payments with respect to the Notes will terminate (except for this Section
12.11 and the Section 12.02(c)); and the only rights of a Holder of a Note not
surrendered for conversion pursuant to the preceding sentence will be to (i)
receive the number of Conversion Shares such Noteholder would have received had
the Holder's Note or Notes been surrendered for conversion as required hereby,
(ii) the payment referred to in Section 12.02(c) and (iii) the payment referred
to in Section 12.03. Any notice which is published in the manner herein
provided shall be conclusively presumed to be given and any defect in such
notice to the Noteholder designated for required conversion shall not affect
the validity of the proceedings for the required conversion of any other Bearer
Note.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01 Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 13.02 or Section 13.03 be
applied to all Outstanding Notes upon compliance with the conditions set forth
below in this Article. The Company shall promptly give notice of such election
to the Trustee.
SECTION 13.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 13.01 of the option
applicable to this Section 13.02, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth in Section 13.04 are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 13.05 and the other Sections of
this Indenture referred to in (A) and (B) below, and to
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have satisfied all its obligations under such Notes, including the obligation
to pay interest on the Notes, and this Indenture insofar as such Notes 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: (A) the rights of
Holders of Outstanding Notes to receive, solely from the trust fund described
in Section 13.04 and as more fully set forth in such Section, payments in
respect of the principal of and interest on such Notes when such payments are
due, (B) the Company's obligations with respect to such Notes under Sections
3.04, 3.05, 3.08, 10.02 and 10.03 and with respect to the Trustee under Section
6.06, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (D) this Article. Subject to compliance with this Article, the
Company may exercise its option under this Section 13.02 notwithstanding the
prior exercise of its option under Section 13.03 with respect to the Notes.
SECTION 13.03 Covenant Defeasance.
Upon the Company's exercise under Section 13.01 of the option
applicable to this Section 13.03, the Company shall be released from its
obligations under any covenant contained in Sections 10.04 through 10.15 with
respect to the Outstanding Notes on and after the date the conditions set forth
in Section 13.04 are satisfied (hereinafter, "covenant defeasance"), and the
Notes shall thereafter be deemed not to be "Outstanding" for the purposes of
any request, demand, authorization, direction, declaration, notice, consent,
waiver or Act of Noteholders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the Outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such 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 5.01(d), but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
SECTION 13.04 Conditions to Legal Defeasance or Covenant
Defeasance.
The following shall be the conditions to application of either Section
13.02 or Section 13.03 to the Outstanding Notes:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 6.07 who shall agree to comply with the
provisions of this Article applicable to it) as trust funds in trust
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for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Notes, (A) money, which may include funds distributed
from the Seggregated Account, in an amount, or (B) U.S. Government
Obligations 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,
money in an amount, or (C) a combination thereof, sufficient, 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 interest on the Outstanding Notes on the Stated
Maturity (or Redemption Date, if applicable) of such principal or
instalment of interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to said payments with respect to the
Notes; and provided further that, upon the effectiveness of this
Section 13.04, the money or U.S. Government Obligations deposited
shall not be subject to the rights of the Noteholders pursuant to the
provisions of this Article. Before or after such a deposit, the
Company may give to the Trustee, in accordance with Section 11.03
hereof, a notice of its election to redeem all of the Outstanding
Notes at a future date in accordance with Article Eleven hereof, which
notice shall be irrevocable. Such irrevocable redemption notice, if
given, shall be given effect in applying the foregoing.
(b) No Default or Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such
deposit or, insofar as paragraphs (h) and (i) of Section 5.01 hereof
are concerned, 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).
(c) No event or condition shall exist that pursuant to
the provisions of Section 13.02 or 13.03 would prevent the Company
from making payments of the principal of or interest on the Notes on
the date of such deposit or 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) Such legal defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a default under
any material agreement or instrument to which the Company is a party
or by which it is bound.
(e) In the case of an election under Section 13.02, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that the Holders of the Outstanding
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Notes 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.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the legal
defeasance under Section 13.02 or the covenant defeasance under
Section 13.03 (as the case may be) have been complied with.
SECTION 13.05 Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee--collectively for
purposes of this Section 13.05, the "Trustee") pursuant to Section 13.04 in
respect of the Outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes 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 Notes of all sums due and to become due thereon in respect of principal
and interest, but such money and U.S. Government Obligations need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 13.04 or the principal and 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 the Outstanding Notes.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 13.04
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 an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
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SECTION 13.06 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 13.05 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.02 or 13.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 13.05;
provided, however, that no action taken in good faith by the Company after a
deposit of money or U.S. Government Obligations or both pursuant to Section
13.05 and prior to the revival and reinstatement of obligations under this
Indenture and the Notes pursuant to this Section 13.06 shall constitute the
basis for the assertion of an Event of Default pursuant to Section 5.01; and
provided, further, that if the Company makes any payment of principal of or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE FOURTEEN
SENIORITY OF NOTES
SECTION 14.01 Seniority of the Notes.
The Company's obligations under the Notes and the Coupons and
hereunder do and will rank at all times at least pari passu with all other
present and future Indebtedness of the Company and shall be superior in rank to
all existing and future Subordinated Obligations. The Company covenants and
agrees that, except with respect to any Lien, the Indebtedness represented by
the Notes and the Coupons and the payment of the principal of and interest on
each and all of the Notes and Coupons are hereby expressly made pari passu to
all other present and future Indebtedness other than all Subordinated
Obligations.
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ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01 Liability Solely Corporate.
No recourse shall be had for the payment of the principal of or
interest on any Notes or any part thereof, or for any claim based thereon or
otherwise in respect thereof, or of the indebtedness represented thereby, or
upon any obligation, covenant or agreement of this Indenture, against any
incorporator, or against any stockholder, officer or director, as such, past,
present or future, of the Company, or of any predecessor or successor Person,
either directly or through the Company or any such predecessor or successor
Person, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, it being expressly
agreed and understood that this Indenture and all the Notes are solely
corporate obligations, and that no personal liability whatsoever shall attach
to, or be insured by, any such incorporator, stockholder, officer or director,
as such, past, present or future, of the Company or of any predecessor or
successor Person, either directly or through the Company or any such
predecessor or successor Person, because of the indebtedness hereby authorized
or under or by reason of any of the obligations, covenants, promises or
agreements contained in this Indenture or in any of the Notes or to be implied
herefrom or therefrom; and that any such personal liability is hereby expressly
waived and released as a condition of, and as part of the consideration for,
the execution of this Indenture and the issue of the Notes; provided, however,
that nothing herein or in the Notes contained shall be taken to prevent
recourse to and the enforcement of the liability, if any, of any stockholder or
subscriber to capital stock of the Company upon or in respect of shares of
capital stock not fully paid up.
This Indenture may be signed 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 Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
HARKEN ENERGY CORPORATION
By: /s/ Larry E. Cummings
Name: Larry E. Cummings
Title: Vice President
MARINE MIDLAND BANK,
as Trustee
By: /s/ Julian M. Doull
Name: Julian M. Doull
Title: Supervisor
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