1
EXHIBIT 10.1
HARKEN ENERGY CORPORATION
U.S.$85,000,000
5% Senior Convertible Notes Due 2003
TRUST INDENTURE
May 26, 1998
2
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agent Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Alternative Stock Exchange . . . . . . . . . . . . . . . . . . . . . 2
AMEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Denomination . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspapers . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capitalized Lease Obligation . . . . . . . . . . . . . . . . . . . . 3
Cedel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Depository . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order . . . . . . . . . . . . . . . . . . 3
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Period . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Right . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conversion Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Couponholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Distribution Compliance Period . . . . . . . . . . . . . . . . . . . 5
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Extraordinary Resolution . . . . . . . . . . . . . . . . . . . . . . 5
Federal Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . 5
Freely Tradable . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Generally Accepted Accounting Principles or GAAP . . . . . . . . . . 5
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . 7
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Luxembourg Paying Agent and Conversion Agent . . . . . . . . . . . . 7
Mandatory Conversion . . . . . . . . . . . . . . . . . . . . . . . . 7
Mandatory Conversion Date . . . . . . . . . . . . . . . . . . . . . . 8
Market Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 8
Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Marketable Securities . . . . . . . . . . . . . . . . . . . . . . . . 8
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Noteholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Offering Circular . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . 9
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 9
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Predecessor Note . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Presentation Date . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Principal Paying and Conversion Agent . . . . . . . . . . . . . . . . 10
Principal Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 10
Property or Properties . . . . . . . . . . . . . . . . . . . . . . . 11
Redemption by Conversion . . . . . . . . . . . . . . . . . . . . . . 11
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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Relevant Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . 12
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Special Conversion Right . . . . . . . . . . . . . . . . . . . . . . 12
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Stock Exchange Business Day . . . . . . . . . . . . . . . . . . . . . 12
Subordinated Obligation . . . . . . . . . . . . . . . . . . . . . . . 12
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unexercised Note . . . . . . . . . . . . . . . . . . . . . . . . . . 13
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . 13
U.S. Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.03 Rules of Construction. . . . . . . . . . . . . . . . . . . . . 14
SECTION 1.04 Compliance Certificates and Opinions. . . . . . . . . . . . . 15
SECTION 1.05 Form of Documents Delivered to Trustee. . . . . . . . . . . . 15
SECTION 1.06 Acts of Noteholders. . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.07 Notices, Etc., to Trustee and Company. . . . . . . . . . . . . 17
SECTION 1.08 Notice to Noteholders; Waiver. . . . . . . . . . . . . . . . . 18
SECTION 1.09 Effect of Headings and Table of Contents. . . . . . . . . . . 18
SECTION 1.10 Successors and Assigns. . . . . . . . . . . . . . . . . . . . 18
SECTION 1.11 Separability Clause. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.12 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.13 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 1.14 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE TWO
FORMS OF THE NOTES
SECTION 2.01 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.02 Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE THREE
THE NOTES
SECTION 3.01 Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.02 Denominations. . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.03 Execution, Authentication, Delivery and Dating. . . . . . . . 26
SECTION 3.04 Maintenance of A Common Depository; Temporary Notes. . . . . . 27
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SECTION 3.05 Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.06 Book-Entry Provisions for Global Notes. . . . . . . . . . . . 28
SECTION 3.07 Special Transfer Provisions. . . . . . . . . . . . . . . . . . 30
SECTION 3.08 Mutilated, Destroyed, Lost and Stolen Notes. . . . . . . . . . 30
SECTION 3.09 Payment of Interest; Interest Rights Preserved. . . . . . . . 31
SECTION 3.10 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.11 Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.12 Computation of Interest. . . . . . . . . . . . . . . . . . . . 32
SECTION 3.13 ISIN, CUSIP Or Other Identifying Numbers. . . . . . . . . . . 33
SECTION 3.14 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.01 Satisfaction and Discharge of Indenture. . . . . . . . . . . . 33
SECTION 4.02 Application of Trust Money. . . . . . . . . . . . . . . . . . 34
ARTICLE FIVE
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.02 Acceleration of Maturity; Rescission and Annulment. . . . . . 37
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.04 Trustee May File Proofs of Claim. . . . . . . . . . . . . . . 38
SECTION 5.05 Trustee May Enforce Claims Without Possession of Notes. . . . 39
SECTION 5.06 Application of Money Collected. . . . . . . . . . . . . . . . 40
SECTION 5.07 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.08 Unconditional Right of Holders to Receive Principal
and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.09 Restoration of Rights and Remedies. . . . . . . . . . . . . . 41
SECTION 5.10 Rights and Remedies Cumulative. . . . . . . . . . . . . . . . 41
SECTION 5.11 Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . 42
SECTION 5.12 Control by Noteholders. . . . . . . . . . . . . . . . . . . . 42
SECTION 5.13 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 42
SECTION 5.14 Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . 43
SECTION 5.15 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 43
ARTICLE SIX
THE TRUSTEE
SECTION 6.01 Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.02 Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . 44
SECTION 6.03 Trustee Not Responsible for Recitals or Issuance of Notes. . . 45
SECTION 6.04 May Hold Notes. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.05 Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.06 Compensation and Reimbursement. . . . . . . . . . . . . . . 46
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SECTION 6.07 Corporate Trustee Required; Eligibility. . . . . . . . . . . 47
SECTION 6.08 Resignation and Removal; Appointment of Successor. . . . . . 47
SECTION 6.09 Acceptance of Appointment by Successor. . . . . . . . . . . 48
SECTION 6.10 Merger, Conversion, Consolidation or Succession to Business . 49
SECTION 6.11 Certain Duties and Responsibilities. . . . . . . . . . . . . 49
SECTION 6.12 Meetings of Noteholders. . . . . . . . . . . . . . . . . . . 50
SECTION 6.13 Authenticating Agents. . . . . . . . . . . . . . . . . . . . 52
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS BY COMPANY
SECTION 7.01 Disclosure of Names and Addresses of Noteholders. . . . . . 53
SECTION 7.02 Reports by Company. . . . . . . . . . . . . . . . . . . . . 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 8.01 Company May Consolidate, Etc., Only on Certain Terms. . . . 54
SECTION 8.02 Successor Substituted. . . . . . . . . . . . . . . . . . . . 55
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without Consent of Noteholders. . . 55
SECTION 9.02 Supplemental Indentures with Consent of Noteholders. . . . . 56
SECTION 9.03 Execution of Supplemental Indentures. . . . . . . . . . . . 57
SECTION 9.04 Effect of Supplemental Indentures. . . . . . . . . . . . . . 57
SECTION 9.05 Reference in Notes to Supplemental Indentures. . . . . . . . 57
SECTION 9.06 Notice of Supplemental Indentures. . . . . . . . . . . . . . 57
ARTICLE TEN
COVENANTS
SECTION 10.01 Payment of Principal and Interest. . . . . . . . . . . . . . 58
SECTION 10.02 Maintenance of Office or Agency. . . . . . . . . . . . . . . 58
SECTION 10.03 Money for Payments to Be Held in Trust. . . . . . . . . . . 58
SECTION 10.04 Corporate Existence. . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.05 Payment of Taxes and Other Claims. . . . . . . . . . . . . . 60
SECTION 10.06 Maintenance of Properties. . . . . . . . . . . . . . . . . . 60
SECTION 10.07 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.08 Statement by Officers as to Default. . . . . . . . . . . . . 61
SECTION 10.09 Provision of Financial Statements. . . . . . . . . . . . . . 62
SECTION 10.10 Limitation on Other Indebtedness. . . . . . . . . . . . . . 62
SECTION 10.11 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.12 Waiver of Certain Covenants. . . . . . . . . . . . . . . . . 63
SECTION 10.13 Restrictions on Charter Amendments. . . . . . . . . . . . . 63
SECTION 10.14 United States Withholding and Reporting Requirements. . . . 64
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SECTION 10.15 Registration of Shares and Maintenance of Listings for
Notes and Shares. . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.17 Rights Agreement. . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 11.01 Right of Redemption. . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.02 Applicability of Article. . . . . . . . . . . . . . . . . . 66
SECTION 11.03 Election to Redeem; Notice to Trustee. . . . . . . . . . . . 66
SECTION 11.04 Selection by Trustee of Notes to Be Redeemed. . . . . . . . 66
SECTION 11.05 Notice of Redemption. . . . . . . . . . . . . . . . . . . . 66
SECTION 11.06 Deposit of Redemption Price. . . . . . . . . . . . . . . . . 67
SECTION 11.07 Notes Payable on Redemption Date. . . . . . . . . . . . . . 68
SECTION 11.08 Surrender of Notes . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.09 Conversion on Redemption . . . . . . . . . . . . . . . . . . 68
SECTION 11.10 Redemption by Conversion . . . . . . . . . . . . . . . . . . 69
ARTICLE TWELVE
CONVERSION
SECTION 12.01 Conversion Right and Conversion Price . . . . . . . . . . . . 70
SECTION 12.02 Exercise of Conversion Right . . . . . . . . . . . . . . . . . 70
SECTION 12.03 Calculation of Shares Issued on Conversion and Fractions of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
SECTION 12.04 Adjustment of Conversion Price. . . . . . . . . . . . . . . 71
SECTION 12.05 Notice of Adjustments of Conversion Price . . . . . . . . . 76
SECTION 12.06 Notice of Certain Corporate Action. . . . . . . . . . . . . 77
SECTION 12.07 Company to Reserve Common Stock. . . . . . . . . . . . . . . 78
SECTION 12.08 Taxes on Conversions. . . . . . . . . . . . . . . . . . . . 78
SECTION 12.09 Cancellation of Converted Bearer Notes. . . . . . . . . . . 78
SECTION 12.10 Provisions in Case of Reclassification Consolidation,
Merger or Sale . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.11 Mandatory Conversion. . . . . . . . . . . . . . . . . . . . 79
SECTION 12.12 Special Conversion Right. . . . . . . . . . . . . . . . . . 80
SECTION 12.13 Amendments to Regulation S. . . . . . . . . . . . . . . . . 80
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 13.01 Company's Option to Effect Defeasance or Covenant Defeasance. 81
SECTION 13.02 Legal Defeasance and Discharge. . . . . . . . . . . . . . . 81
SECTION 13.03 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.04 Conditions to Legal Defeasance or Covenant Defeasance. . . . 82
SECTION 13.05 Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions. . . . . . . . . . . 83
SECTION 13.06 Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . 84
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ARTICLE FOURTEEN
SENIORITY OF NOTES
SECTION 14.01 Seniority of the Notes. . . . . . . . . . . . . . . . . . . 84
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01 Liability Solely Corporate. . . . . . . . . . . . . . . . . 85
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Exhibits:
Exhibit A -- Form of Bearer Notes
Exhibit B-1 -- Form of Temporary Global Note
Exhibit B-2 -- Form of Permanent Global Note
Exhibit C -- Conversion Notice
Exhibit D -- Form of Mandatory Conversion Notice
Exhibit E -- Form of Notice of Redemption for Shares
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TRUST INDENTURE dated as of May 26, 1998 ("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.
$85,000,000 of 5% Senior Convertible Notes Due 2003 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 agreed between the Company and the Trustee.
"AMEX" means The American Stock Exchange, Inc. or any successor thereto.
"Authenticating Agent" means the Person authorized pursuant to Section
6.13 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 Denomination" means the denomination authorized in Section
3.02.
"Authorized Newspapers" means the Luxembourg Wort of Luxembourg and The
Financial Times (European Edition) of London, England. If either 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 either 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 Luxembourg, the City of
New York, New York, and London, England are not authorized or obliged by law,
regulation or executive order to close.
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"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 of the relevant Person.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate of Incorporation" means the 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 May 26, 1998.
"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 and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, and delivered to the Trustee.
"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 Kredietbank S.A. Luxembourgeoise to act as the Luxembourg Conversion Agent
for the Notes.
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"Conversion Date" means the Business Day during the Conversion Period on
which the Conversion Right is exercised (or, with respect to the exercise of a
Special Conversion Right, the Business Day on which the Special Conversion
Right is exercised) by delivery to the Conversion Agent of the Note surrendered
for conversion and the completed notice of a Noteholder's intention to exercise
its Conversion Right (as set forth in Exhibit C hereto) with respect to any
Note.
"Conversion Period" means, with respect to any Note, the period which
commences on the Effective Date and which ends on the earliest to occur of (i)
the close of business on the second Business Day preceding the later to occur
of May 26, 2003 or the date on which all principal and interest on such Note is
repaid in full, (ii) if such Note shall have been called for redemption
pursuant to Article Eleven, the close of business two (2) Business Days prior
to the Redemption Date, or (iii) if the Company shall have given notice that
the Mandatory Conversion option in Section 12.11 has been exercised, the
Mandatory Conversion Date; provided, however, that the Conversion Period shall
exclude (unless an exemption from registration is available) all days upon
which a registration statement with respect to the Conversion Shares is not in
effect and all days upon which a distribution pursuant to a filed registration
statement is subject to a stop-order issued by the Commission.
"Conversion Price" means, except as otherwise provided pursuant to
Article 11.10, $6.50, 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.
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"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.
"Distribution Compliance Period" means the one year period commencing
after the Closing Date.
"Effective Date" means the earlier of (a) the first Business Day
following the date upon which the Commission declares to be effective a
registration statement filed by the Company pursuant to the Securities Act
relating to the Conversion Shares and (b) the first Business Day occurring
after the expiration, as applicable, of the Distribution Compliance Period.
"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 6.12 hereof.
"Federal Bankruptcy Code" means the Bankruptcy Act or Title 11 of the
United States Code, as amended from time to time.
"Freely Tradable" means, with respect to the Notes and the Shares, that
under the Securities Act the holders thereof may then offer and sell any amount
of such outstanding securities to the public in the United States in
transactions that are not brokers' transactions (as defined in the Securities
Act) either (i) pursuant to an effective registration statement then in effect
or (ii) pursuant to Rule 144(k). For purposes of determining whether such
securities are Freely Tradable, it shall be assumed that no person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company has ever held such
securities from and after their issuance.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company and its Subsidiaries in the preparation of its financial
statements.
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"Global Notes" means the Temporary Global Note and the Permanent Global
Note that may be issued pursuant to this Indenture.
"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) 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, 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.
"Indebtedness" of any Person means and includes all present and future
obligations of such Person, which shall include, without limitation, 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 default are limited to repossession or sale of such Property, (vi)
which are Capitalized Lease Obligations, (vii) for all Guarantees, whether or
not reflected in the balance sheet of such Person and (viii) which are all
reimbursement and other payment obligations (whether contingent, matured or
otherwise) of such
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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.
"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.
"Luxembourg Paying Agent and Conversion Agent" means any Person
authorised by the Company to act as the Luxembourg paying and conversion agent
for the Notes until a successor Luxembourg Paying and Conversion Agent shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Luxembourg Paying and Conversion Agent" shall mean such successor
Luxembourg Paying and Conversion Agent. Pursuant to the terms hereof, the
Company has initially appointed Kredietbank S.A. Luxembourgeoise as the
Luxembourg Paying and Conversion Agent.
"Mandatory Conversion" means conversion of the Notes at the option of
the Company pursuant to Section 12.11.
"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.
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"Market Capitalization" means, for any date, the average, over the
thirty (30) calendar day period immediately preceding the date that notice of
redemption is given pursuant to this Indenture, of the product of the Market
Price of the Common Stock (ignoring days in such period which are not Stock
Exchange Business Days) and the number of shares of Common Stock of the Company
issued and outstanding on such date; provided, however, that appropriate
adjustments shall be made to the Market Prices and number of shares used in
determining such Market Capitalization to account fairly for the effect of
dividends payable in cash or equity securities of the Company or any other
Person, spin-offs of subsidiaries, mergers in which the Company or a Principal
Subsidiary is a constituent party, and similar events; and further provided,
that in the event that the Company's Common Stock is not traded on the New York
Stock Exchange, the AMEX or any Alternative Stock Exchange and the Trustee and
the Company are not able to agree on the value of the Company's Market
Capitalization, then the average Market Price for any particular day or over
the disputed period shall be calculated promptly at the Company's expense by a
reputable investment bank selected by the Trustee.
"Market Price" means, on any given day, the daily closing sale price of
the Common Stock for a Stock Exchange Business Day on the AMEX or, if not
quoted on the AMEX, then on an Alternative Stock Exchange, but if the Common
Stock is not quoted on the AMEX or an Alternative Stock Exchange, then the
Market Price for any particular day shall be calculated promptly at the
Company's expense by a reputable investment bank selected by the Trustee.
"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 any 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 Final Offering Circular dated May
26, 1998, together with all supplements and amendments thereto.
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"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 Officer's Certificate without cosignature of another
individual with a requisite title.
"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 (other than
Persons whose Affiliate relationship arises solely from ownership of Conversion
Shares) or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making 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.
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"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
Kredietbank S.A. Luxembourgeoise as the Luxembourg Paying Agent.
"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 either the Company or any
Subsidiary:
(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
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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; and
(c) and shall include, for the avoidance of doubt, Harken
Exploration Company, Harken Energy West Texas, Inc., Harken Southwest
Corporation, Search Acquisition Corp., and Harken de Colombia, Ltd.
"Property" or "Properties"means any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, and any interest therein.
"QUIB" means a qualified institutional buyer within the meaning of Rule
144A.
"Redemption by Conversion" has the meaning specified in Section 11.10.
"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 and Coupons to be
redeemed, means the price at which they are to be redeemed pursuant to the
terms hereof, plus accrued interest to the Redemption Date if applicable,
expressed in a number of Conversion Shares into which such Note and Coupon
shall be converted in the event the Notes and/or Coupons are to be redeemed for
Shares and, in the event of any other redemption, a cash amount.
"Regulation S" means Regulation S under the Securities Act as in effect
on the date hereof or as such Regulation may hereafter be amended and deemed
applicable to the Notes.
"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.
"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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"Rights Agreement" has the meaning specified in Section 10.17.
"Rule 144A" means Rule 144A, as amended, promulgated by the Commission
pursuant to the Securities Act.
"Rule 144" means Rule 144, as amended, promulgated by the Commission
pursuant to the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated from time to time by the Commission pursuant
thereto.
"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).
"Special Conversion Right" means the right of the Holder or the Trustee
to require the conversion of Notes into shares of Common Stock pursuant to
Section 12.12.
"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".
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
5.5% Senior Notes 3.01
Agency Agreement 10.02
Bearer Notes 2.01
Commencement Date 12.04
Covenant defeasance 13.03
Current Event 12.04
Expiration Time 12.04
legal defeasance 13.02
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Notice 1.08
Other Event 12.04
Permanent Global Note 2.01
Reference Date 12.04
Temporary Global Note 2.01
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 (i) any application or request to make an optional redemption or
Mandatory Conversion and (ii) upon the request of the Trustee, 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 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.
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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 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
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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,
Marine Midland Bank, 140 Broadway, New York, New York 10005-1180, 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, President and Chief Operating
Officer, Tel. (972) 753-6939, Fax. (972) 753-6926, with a copy to Larry E.
Cummings, General Counsel, Tel. (972) 753-6932, Fax. (972) 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 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.
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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 the Authorized Newspapers.
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 successors hereunder, and the Noteholders
any legal or equitable right, remedy or claim under this Indenture.
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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.
The Notes shall be known as the "5% Senior Convertible Notes Due 2003"
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 May 26, 1998.
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The terms and provisions contained in the form of the Bearer Notes
annexed hereto as Exhibit A, in the form of the Temporary Global Note annexed
hereto as Exhibit B-1, and in the form of the Permanent Global Note annexed
hereto as Exhibit B-2 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-1 (the "Temporary
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 Temporary 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. On or after the first anniversary of the
Closing Date, the Temporary Global Note shall be replaced by and exchanged for
a permanent global bearer note substantially in the form set forth in Exhibit
B-2 (the "Permanent Global Note"), in an aggregate principal amount equal to
the then-outstanding aggregate principal amount of the Temporary 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 Permanent 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 the form of permanent certificated Notes in
bearer form in substantially the form set forth in Exhibit A (the "Bearer
Notes") and in an aggregate maximum principal amount equal to the outstanding
aggregate principal amount of the Permanent Global Note or the Temporary Global
Note, as the case may be immediately prior to issue.
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 of the Temporary Global Note and the Permanent Global Note shall
bear the following legend on the face thereof:
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"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE `SECURITIES ACT'), OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE OFFERED, SOLD, 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 THE
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. NO HEDGING TRANSACTIONS
INVOLVING THIS NOTE MAY BE CONDUCTED, UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT. 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 Bearer Note and Coupon thereto shall bear the following legend on
the face thereof:
"NEITHER THIS NOTE NOR THE SHARES OF COMMON STOCK ISSUABLE ON CONVERSION
OF THIS NOTE (THE `SHARES') HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE `SECURITIES ACT'), OR THE SECURITIES LAWS
OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE
BENEFIT OF THE COMPANY THAT THIS NOTE AND THE SHARES MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS FOLLOWS.
PRIOR TO THE FIRST ANNIVERSARY OF THE ISSUANCE OF THIS NOTE (OR
PREDECESSOR SECURITY HERETO), THIS NOTE MAY NOT BE SO TRANSFERRED OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A (`RULE 144A') UNDER THE SECURITIES ACT, TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A `QUALIFIED INSTITUTIONAL
BUYER' WITHIN THE MEANING OF RULE 144A (a `QUIB') PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUIB TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(3) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED
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STATES IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S (RULES
901 THROUGH 905) UNDER THE SECURITIES ACT, OR (4) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
AFTER THE FIRST ANNIVERSARY AND PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE OF THIS NOTE (OR PREDECESSOR SECURITY), THIS NOTE MAY NOT BE SO
TRANSFERRED OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUIB WITHIN THE MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUIB TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S (RULES 901 THROUGH 905) UNDER THE
SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
IF THE HOLDER OF THIS NOTE WAS AN AFFILIATE OF THE COMPANY AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF ANY SUCH TRANSFER, THE
FOREGOING CONDITIONS MUST BE COMPLIED WITH REGARDLESS OF WHEN SUCH
TRANSFER IS MADE.
NO HEDGING TRANSACTIONS INVOLVING THIS NOTE OR THE SHARES MAY BE
CONDUCTED, UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
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."
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In the event that Regulation S is amended during the period while any Note or
Coupon remains outstanding and the Company determines that the foregoing
restrictive legends are required to be amended as a result thereof or
additional or different procedures are required in connection with the trading
of such securities, the Company shall provide the Trustee with notice pursuant
to Section 1.09 and the Noteholders pursuant to Section 1.08 setting forth the
revised form of restrictive legends and other procedures that the Company
believes are required and shall provide the Trustee with an Opinion of Counsel
to the effect that such restrictive legends are required to be amended or that
such procedures are required to be adopted and observed. The form of Bearer
Note set forth at Exhibit A, the Temporary Global Note set forth at Exhibit B-
1, and the Permanent Global Note set forth at Exhibit B-2 and any Notes issued
shall be deemed to be so amended effective at the date of such notice to the
Trustee.
Conversion Shares that may be issued prior to the date such Conversion
Shares would be Freely Tradable, and any Conversion Shares that may be issued
to affiliates of the Company (as defined in Rule 144), shall bear the following
legend on the face thereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE `SHARES') HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
`SECURITIES ACT'), OR THE SECURITIES LAWS OF ANY STATE. THE HOLDER
HEREOF AGREES FOR THE BENEFIT OF THE COMPANY THAT THE SHARES MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS FOLLOWS.
PRIOR TO THE FIRST ANNIVERSARY OF THE ISSUANCE OF THE SHARES (OR
PREDECESSOR SECURITY HERETO), THE SHARES MAY NOT BE SO TRANSFERRED OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THE SHARES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A (`RULE 144A') UNDER THE SECURITIES ACT, TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (a `QUIB')
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUIB TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (3) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING
THE REQUIREMENTS OF REGULATION S (RULES 901 THROUGH 905) UNDER THE
SECURITIES ACT,
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OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
AFTER THE FIRST ANNIVERSARY AND PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE OF THE SHARES (OR PREDECESSOR SECURITY), THE SHARES MAY NOT BE
SO TRANSFERRED OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUIB WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUIB TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (3) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING
THE REQUIREMENTS OF REGULATION S (RULES 901 THROUGH 905) UNDER THE
SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
IF THE HOLDER OF THE SHARES WAS AN AFFILIATE OF THE COMPANY AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF ANY SUCH TRANSFER, THE
FOREGOING CONDITIONS MUST BE COMPLIED WITH REGARDLESS OF WHEN SUCH
TRANSFER IS MADE.
NO HEDGING TRANSACTIONS INVOLVING THE SHARES MAY BE CONDUCTED, UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN HARKEN ENERGY
CORPORATION (THE `COMPANY') AND CHASEMELLON SHAREHOLDER SERVICES L.L.C.,
AS RIGHTS AGENT, DATED AS OF APRIL 6, 1998 AS THE SAME MAY BE AMENDED
FROM TIME TO TIME (THE `RIGHTS AGREEMENT'), THE TERMS OF WHICH ARE
HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF
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WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, AS
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE."
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 U.S.$85,000,000, 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. Their Stated
Maturity shall be May 26, 2003, and they shall have the rights and 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 rank pari passu with the 5.5% Senior Notes Due 2002 of
the Company (the "5.5% Senior Notes").
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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 the
denomination of $10,000.
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 on which the original issue of Notes is to be
authenticated. The aggregate principal amount of Notes outstanding at any time
may not exceed $85,000,000 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 May 26, 1998.
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.
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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 Maintenance of A Common Depository; Temporary Notes.
If the Common Depository notifies the Company that it is unwilling or
unable to continue as Common Depository for the Permanent Global Note or the
Temporary Global Note, the Company shall use its best efforts to identify and
appoint a successor depository within 90 days of such notice. Pending the
preparation of definitive Notes, if required pursuant to this Indenture, but in
no event prior to September 1, 1998, 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 the 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 required to be issued pursuant to this Indenture,
the Company will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of 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 the Authorized Denomination.
Until so exchanged, the temporary Notes shall in all respects be entitled to
the same benefits under this Indenture as definitive Notes.
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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 the
Authorized Denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of the Temporary Global Note or the Permanent
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.
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 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 Notes.
(a) The Global Notes 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
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("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 such 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 a 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 a
Global Note may be transferred in accordance with the rules and procedures of
the Common Depository and the provisions of Section 3.06. Bearer Notes shall
be transferred to all beneficial owners in exchange for their beneficial
interests in a Global Note in accordance with the Common Depository's
procedures if (i) the Common Depository notifies the Company that it is
unwilling or unable to continue as Common Depository for such Global Note and a
successor depository is not appointed by the Company within 90 days of such
notice, (ii) Euroclear or Cedel is closed for business for a continuous period
of 14 days (other than by reason of legal holidays) or announces an intention
permanently to cease business, or (iii) an Event of Default has occurred and is
continuing and the Trustee has received a request from the Common Depository.
(c) In connection with any transfer of beneficial interests in
a 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 such Global Note in an amount equal to the
principal amount of the beneficial interests 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 beneficial
interests in an 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.
(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.
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(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 otherwise than in
accordance with Regulation S and the Securities Act. Unless otherwise required
by applicable law, none of the Company, the Common Depository or the Trustee
shall recognize or give effect to any attempt to transfer (by book entry or
otherwise) or convert any Note or any interest therein in violation of either
Regulation S or the Securities Act.
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 unless the Notes
and/or 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.
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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.
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 (if in issue), 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. The Noteholders and Couponholders shall
furnish the Common Depository, for delivery to the Company, certifications at
November 26, 1998 and May 26, 1999 that the Notes and Coupons either are not
held for the account or benefit of a U.S. Person or are held by a QUIB.
Each such payment will be made at the specified office of any Paying
Agent, at the option of the Holder of such Coupon (if in issue), 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.
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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 once payment, conversion,
redemption or exchange has occurred. 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
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 and, in the case of an incomplete month, the number of
days elapsed.
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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.
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, the Company's obligations to the Trustee pursuant to
Section 6.06, and the registration obligations in Section 10.15) 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,
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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 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
(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.
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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 (5) 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, this
Indenture, the Company's 5.5% Senior Notes, or the trust indenture pursuant to
which such 5.5% Senior Notes were issued, and (except where the Trustee shall
have certified to the Company in writing that it considers such failure to be
incapable of remedy, in which case no such notice or continuation as is
hereinafter 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.$2,000,000 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
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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
(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, state or foreign 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 reorganization of the Company or any Principal Subsidiary under the
Federal Bankruptcy Code or any other similar applicable U.S. federal, state or
foreign 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
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(i) if there is any final judgment or judgments for the
payment of money exceeding in the aggregate U.S.$2,000,000 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.
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
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(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.
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 (5) 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
(5) 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.
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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 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 expressed in such Note or Coupon (or, in the case of redemption, on
the Redemption Date) 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 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
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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 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.
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(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, any Authenticating
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, any Authenticating 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, state or foreign 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.
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
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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 Colombia 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 thirty (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 (6) months, or
(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
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(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 (6) 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 (6) 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, 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, 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.
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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 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.
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(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 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 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.
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(b) The Trustee may at any time call a meeting of the Holders
of the Notes for any purpose specified in Section 6.12(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 6.12(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.
(e) The quorum at any meeting for passing any Extraordinary
Resolution will be one or more Persons present holding or representing 50% 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 and the
vote required for passing an Extraordinary Resolution at such meeting will be
not less than a majority of the principal amount of the Outstanding Notes and
represented at such meeting or adjournment thereof; provided, that at any
meeting, the business of which includes the modification of the provisions of
the Terms and Conditions (including without limitation Condition 8) 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
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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 (subject to certain
exceptions) 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 reasonable opinion of the Trustee materially
prejudicial to the interests of the Holders of the Notes or the Coupons or
which is of a formal, minor or technical nature or to correct a manifest error.
SECTION 6.13 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 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 doing business under the laws of the United States of
America, any state thereof, the District of Colombia, Luxembourg, 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 provisions of this Section 6.13, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.13.
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
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6.13, without the execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and 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 6.13, 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 6.13.
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.
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; and
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(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.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 8.01 Company May Consolidate, Etc., Only on Certain Terms.
The Company will not merge or consolidate with or sell, convey, transfer
or lease or otherwise dispose of all or substantially all of its 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 acquired by conveyance or
transfer, or which leases, the 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 Colombia and (2) shall expressly assume, by a trust 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 (and
treating any Indebtedness which becomes an obligation of the Company in
connection with or as a result of such transaction as having been incurred at
the time of 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 Article 9 and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
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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.
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
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(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 rights of the Noteholders under this Indenture;
provided, 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, 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.
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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 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.
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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.
SECTION 10.02 Maintenance of Office or Agency.
The Company will maintain in Luxembourg and in not less than one other
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 office of the Luxembourg Paying Agent at 43
Boulevard Royal, L-2955 Luxembourg and the corporate trust office of the
Principal Paying Agent at Mariner House, Pepys Street, London EC3N 4DA, England
shall be such offices or agencies of the Company, unless the Company shall
designate and maintain some other offices or agencies 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 offices or agencies. If at any time the Company shall fail to maintain
any such required offices or agencies 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
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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.
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
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the expense of the Company cause to be published once, in the Authorized
Newspapers, 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 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 10.13.
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
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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 Section 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 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
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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, 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 (whether by agreement, by
operation of law, or structurally by virtue of the identity of the obligor) in
right of payment to the Notes; provided, however, that the Company and/or a
Principal Subsidiary may incur and become liable with respect to Indebtedness
which is senior in right of payment to the Notes provided (i) such Indebtedness
is incurred in connection with purchase money obligations in respect of any
Property or assets purchased after the Closing Date or to pay all or a portion
of the purchase price of Property or assets acquired by the Company and/or by a
Principal Subsidiary after the Closing Date, (ii) if the Company and/or a
Principal Subsidiary shall grant a security interest in existing Property or
assets, the Company shall, at all times when any such Indebtedness is
outstanding, maintain a negative pledge covering other Property and assets
which are not subject to any security interest senior in right of payment to
the Notes with an asset value coverage ratio, being the quotient of (a) the
fair market value of the assets covered by the negative pledge to (b) the
aggregate principal amount of the Notes then Outstanding, equal to or greater
than 1.5 to 1.0, or (iii) if such Indebtedness is incurred in connection with
project finance transactions by the Company and/or a Principal Subsidiary, such
Indebtedness will be recourse only to the project
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and/or project assets so encumbered, except to the extent a corporate guarantee
by the Company and/or a Principal Subsidiary may be required in connection
therewith. All such Indebtedness as contemplated under provisos (i), (ii), and
(iii) above to the extent it ranks senior to the Notes shall rank senior to the
Notes only as to payment from the assets or Property encumbered and shall rank
pari passu to the Notes for all other purposes.
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 (whether by agreement, by operation
of law, or structurally by virtue of the identity of the obligor) the Notes
(including any assumption, guarantee or other liability with respect thereto by
any of its Principal Subsidiaries) upon any Properties of the Company or any of
its Subsidiaries, unless the Notes are equally and ratably secured or rank
prior to the Indebtedness secured by such Lien; provided, however, that such
Liens may be incurred if the Indebtedness secured by such Lien is contractually
subordinated to the Indebtedness represented by the Notes in a manner
satisfactory to the Trustee, and except that Liens may be incurred securing
Indebtedness which is senior Indebtedness permitted under the provisos set
forth in Section 10.10 (provided that the Property encumbered by the Lien is
limited to, in the case of proviso (iii), the project and/or project assets and
to, in the case of proviso (i), the Property acquired by the Company and/or by
a Principal Subsidiary with the proceeds of the Indebtedness).
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.
SECTION 10.13 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.
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SECTION 10.14 United States Withholding and Reporting Requirements.
To the extent permitted by law, the Company will provide to the Trustee,
the Paying Agents 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.
SECTION 10.15 Registration of Shares and Maintenance of Listings for
Notes and Shares.
The Company shall file a registration statement on Form S-3 (or such
other form as the Company may determine is appropriate) at the earliest
practicable date, but in any event prior to thirty (30) days following the
Closing Date, in respect of all Conversion Shares that may be issuable at any
time upon the conversion of the Notes. The Company shall use its best efforts
to cause the Commission to declare such registration statement (and any
necessary amendments thereto) effective. The Company shall also use its best
efforts to maintain the effectiveness of such registration statement, and to
refile such a registration statement from time to time in the event its
effectiveness lapses, until all Conversion Shares that either issued or that
may be issued are Freely Tradable in the United States.
The Company shall use its best efforts to list the Notes on the
Luxembourg Stock Exchange and maintain such listing until all Notes have been
converted, redeemed, or paid in full. In addition, while any Conversion Right
remains exercisable, the Company will use its best efforts to maintain a
listing for all the issued Shares on the AMEX, it being understood that if the
Company is unable to obtain or maintain such listing of Shares, to obtain and
maintain a listing of all the Shares issued on the exercise of the Conversion
Rights on such Alternative Stock Exchange as the Company may from time to time
(with the written consent of the Trustee) determine, it will forthwith give
notice to the Noteholders in accordance with Section 1.08 of the listing, de-
listing or quotation or lack of quotation of the Shares (as a class) by AMEX or
any such Alternative Stock Exchange. To the extent that the maintenance of
such a listing is within the reasonable control of the Company and to the
extent the Company has reasonable control over the timing of any delisting or
loss of quotation, the Company shall not take any action or omit to take any
action which could lead to such delisting or loss without giving the
Noteholders notice, in accordance with Section 1.08, at least ninety (90) days
in advance of the taking of such action or the making of such omission (and, if
either ninety (90) days notice can not be given or if the action or omission
has occurred, then within one Business Day after the Company becomes aware of
an appreciable risk of such delisting or loss).
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SECTION 10.16 Use of Proceeds.
The Company shall utilize the net proceeds of the Notes for the
following purposes: (i) working capital, (ii) domestic and/or international
acquisitions, (iii) domestic and international exploration and development,
(iv) other purposes consistent with the previous business practices of the
Company and its Subsidiaries and (v) other business purposes which the
Noteholders may approve by Extraordinary Resolution.
SECTION 10.17 Rights Agreement.
Holders of Conversion Shares shall be entitled to all the rights and
benefits that accrue to holders of Common Stock under the Rights Agreement
dated April 6, 1998 between ChaseMellon Shareholder Services L.L.C., as Rights
Agent, and Harken Energy Corporation, as amended from time to time (the "Rights
Agreement"). The Company agrees not to amend the Rights Agreement in any
manner which would prejudice the rights of holders or potential holders of
Conversion Shares relative to the rights of holders of Common Stock who are
entitled to the benefit of the Rights Agreement.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 11.01 Right of Redemption.
At any time after May 26, 2002, the Notes may be redeemed, at the
election of the Company, as a whole or from time to time in part in accordance
with this Article Eleven. Prior to such time and on giving notice pursuant to
Section 11.05, the Company may redeem all of the Notes for the time being
outstanding at their principal amount, together with interest accrued to the
Redemption Date, in the event that prior to the date of such notice, Conversion
Rights shall have been exercised and/or purchases (and corresponding
cancellations) have been effected in respect of 85% or more in principal amount
of the Notes. Redemption shall be subject to the conditions specified in the
form of Note and shall be made at a Redemption Price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest to and
including the Redemption Date, but only to the extent that all unmatured
Coupons (if applicable) are attached to such Notes.
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SECTION 11.02 Applicability of Article.
The 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 $10,000.
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 days 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 (if applicable) 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;
(f) pursuant to Section 3.13, any ISIN, CUSIP or other
identifying numbers relating to the Notes; and
(g) in the event of a redemption pursuant to Section 11.10,
the amount of the conversion premium, if any.
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. In the event of a
redemption pursuant to Section 11.10, notice in the form set forth in Exhibit E
shall also be given, in the manner provided for in Section 1.08, together with
the notice referenced above.
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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.
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 (if applicable)), 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 May 27, 2003, 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 by the Trustee or
the Principal Paying Agent or, if earlier, May 26, 2003.
SECTION 11.08 Surrender of Notes
Each Note should be presented for redemption together with all unmatured
Coupons (if applicable) relating to such Note. If such Coupons are not so
presented, 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
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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
(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 Unexercised Notes due for conversion
on such date 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 investment 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)
such as tax or the payment of any capital, stamp, issue or registration duties
consequent on conversion) would be likely to exceed by 5 percent or more the
amount of redemption monies and interest which would otherwise be payable.
(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 [under Condition 6(C)(iv) of the Terms and Conditions of the Notes] 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 in accordance with Condition 5 of
the Terms and Conditions of the Notes. 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.
SECTION 11.10 Redemption by Conversion
Commencing November 26, 2002, the Company may elect to redeem up
to fifty percent (50%) of the Notes then Outstanding in accordance with this
Article Eleven by
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requiring their immediate conversion pursuant to Article Twelve; provided,
however, that on or after May 26, 2003, regardless of whether this right has
previously been exercised, the Company may so redeem up to 100% of the Notes
then Outstanding. The Conversion Price for purposes of this Section 11.10
shall be a price per share equal to the average of the Market Price of the
Common Stock over the 30 calendar days immediately preceding the date of notice
of such redemption, subject to appropriate adjustments to account for the
effects of dividends, distributions, stock splits, recapitalizations and
similar events. Each Note will be redeemed for the number of shares of Common
Stock equal to 110% of the sum of face value of the Note plus interest accrued
and unpaid thereon divided by the Conversion Price; provided, however, that if
the Market Capitalization is less than $500 million, each Note will be redeemed
for the number of shares of Common Stock equal to 115% of the sum of the face
value of the Note plus interest accrued and unpaid thereon divided by the
Conversion Price. If the Company elects to redeem less than all of the Notes
pursuant to this Section 11.10, the Trustee will select which Notes to so
redeem by lot, random or such method as it deems fair and appropriate.
ARTICLE TWELVE
CONVERSION
SECTION 12.01 Conversion Right and Conversion Price.
(a) Subject to and upon compliance with the provisions of this
Article, any Note may be converted at the option of the Noteholder, either
during the Conversion Period or pursuant to the Special Conversion Right set
forth in Section 12.12, at the principal amount thereof (plus, in the case of
any conversion pursuant to Sections 11.10, 12.11, or 12.12, any interest
accrued and unpaid thereon) 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) Except as otherwise provided in this Indenture, a holder
of shares of Common Stock 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.
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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 the Noteholder shall surrender such Bearer
Note or Notes and (if applicable) 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 the
Authorized Newspapers from time to time, accompanied by written notice (as set
forth in Exhibit C hereto) to the Conversion Agent that the Noteholder elects
to convert such Note. A Conversion Notice once delivered shall be irrevocable.
(b) 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 fully paid 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; provided, however, that interest shall
accrue through the Conversion Date or Mandatory Conversion Date, as the case
may be, in the event of a conversion pursuant to Sections 11.10, 12.11, or
12.12.
(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 save as provided
herein.
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SECTION 12.03 Calculation of Shares Issued on Conversion and Fractions
of Shares.
(a) 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
(plus any interest accrued pursuant to Sections 11.09, 11.10, 12.11 or pursuant
to applicable law) by the Conversion Price in effect on the Conversion Date and
adding any Shares issuable pursuant to Section 12.03(b), 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.
(b) Holders of Notes voluntarily converted during the
Conversion Period and prior to November 26, 1998 will receive on such
conversion a premium in the number of Shares to be issued on such conversion
determined based on the aggregate principal amount of Notes to be converted by
multiplying .03 times the number of Shares to be so issued and rounding down to
the nearest whole number.
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
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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, 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
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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 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
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be substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution", "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
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the Conversion Price in effect immediately prior to the Expiration Time by a
fraction of which the 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 applicable to one share of
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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 at least ten (10) Business Days in advance 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);
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then the Company shall cause to be mailed to the Trustee, the Paying Agent and
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 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 the Trustee on behalf of 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 May 26, 1999, and provided that (i) the Conversion
Shares are Freely Tradeable on the date the criteria set forth below are met
and for a period of 30 days thereafter and (ii) the Conversion Shares are
Freely Tradeable on the date of Mandatory Conversion, the Notes may be
converted in whole, at the Company's option, if at any time the average of the
Market Price of the Common Stock over the Stock Exchange Business Days in any
thirty (30) consecutive calendar day period, the first day of which falls on or
after May 26, 1998 and the last day of which falls on or after the Effective
Date, is equal to or greater than 125% of the
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Conversion Price; provided, however, that the foregoing right may not be
exercised during any period in which the Conversion Shares into which the Notes
are convertible would not be Freely Tradable. 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.
In the event that any amendments to Regulation S are deemed to be
applicable to the Notes, notice of such amendments will be given to the
Luxembourg Stock Exchange and to the Noteholders in accordance with Section
1.08.
At any time after May 26, 1999, and subject to the provisions hereof,
the Company may require such Noteholders to convert all of such Notes pursuant
to the terms of this Article. The Company shall deliver to the Trustee a
notice in the form of Exhibit D 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 only rights of a Holder of a
Note not surrendered for conversion pursuant to the preceding sentence will be
to 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. 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.
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SECTION 12.12 Special Conversion Right.
Any Note may be converted in accordance with this Article Twelve at any
time after the date that occurs ten days prior to the Distribution Date (as
defined in the Rights Agreement). This conversion right may be exercised
either by the Noteholder directly or, if the Trustee has not received any
instruction to the contrary from the Noteholder, by the Trustee acting in the
best interests of the Noteholder, as the Trustee may determine in good faith.
In accordance with this Indenture, the Company shall deliver written notice to
the Trustee and written notice to the Noteholders in the manner set forth in
Section 1.08 and by dissemination of notice through Euroclear and Cedel not
later than nine days prior to the Distribution Date (as defined in the Rights
Agreement). The notice shall expressly disclose: (i) that the Company will
issue Right Certificates (as defined in the Rights Agreement) to holders of
Common Stock of record on the Distribution Date, (ii) that the Noteholders have
the currently exercisable right to convert the Notes at the Conversion Price,
(iii) that a failure to convert the Notes prior to the Distribution Date is
likely to materially and adversely affect the Noteholders' rights and interests
and (iv) a brief summary of the Rights Agreement. The Company shall also
notify the Trustee and the Noteholders in accordance with Section 1.08, at
least seven days in advance of its implementation or vesting, of any plan or
exercise of a right by the Company to redeem, cancel, exchange for Common
Stock, terminate or materially modify the Rights Agreement or any Right granted
or issuable pursuant thereto. Interest shall continue to accrue on the Note
through the date on which such Note is converted.
SECTION 12.13 Amendments to Regulation S.
The Company may, in its discretion, revise the selling restrictions on
the Notes and/or the Shares if the Commission should, subsequent to Closing
Date, give advice or interpretations respecting such restrictions imposed by
Regulation S or should the Commission amend Regulation S respecting such
restrictions. If the Company so revises the selling restrictions, it will give
notice to the Noteholders pursuant to Section 1.08 and will give notice of the
same to the Trustee and the Conversion Agent.
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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 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 10.14 with respect to the
Outstanding Notes on and after
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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 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 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.
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(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 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.
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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.
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
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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 (including the 5.5% Senior Notes), subject
to the provisions of Section 10.10, 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 permitted by this Indenture, 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:
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Name:
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Title:
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MARINE MIDLAND BANK,
as Trustee
By:
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Name:
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Title:
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